Pumped Storage Hydro

A dynamic energy storage solution, pumped storage hydro has helped ‘balance’ the electricity grid for more than five decades to match our fluctuating demand for energy.

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How Pumped Storage Hydro Works

Pumped storage hydro (PSH) involves two reservoirs at different elevations. During periods of low energy demand on the electricity network, surplus electricity is used to pump water to the higher reservoir. When electricity demand increases, the stored water is released, generating electricity.

What Does Pumped Storage Hydro Bring to the UK?


Pumped storage hydro (PSH) must have a central role within the future net zero grid. No single technology on its own can deliver everything we need from energy storage, but no other mature technology can fulfil the role that pumped storage needs to play. It is a mature, cost-effective energy-storage technology capable of delivering storage durations in the critical 10–50 hour duration bracket, at scale, to cover fluctuations associated with a net zero wind and solar fleet.

Key Statistics

There are four operational PSH plants in the UK:

Dinorwig (1983) 1.7 GW, 10.4 GWh
Foyers (1974) 300 MW, 6.4 GWh
Ffestiniog (1963) 360 MW, 7.6 GWh
Cruachan (1966) 440 MW, 7.6 GWh

There is a considerable pipeline of projects at various stages of development with a potential of 6.9 GW installed capacity giving 135 GWh of storage.

Proven, Reliable, Long-Lasting

Historically, energy systems have been based on fossil fuels, which have given us power but also huge amounts of energy storage and flexibility. As we decarbonise the grid and replace these fossil fuels with increasing amounts of intermittent solar and wind, we will need considerably more storage to cover periods of low wind and the flexibility to ensure demand is always met in real time. Energy storage is crucial for keeping the lights on. The four existing PSH schemes in the UK were state-funded more than five decades years ago to consume and store overnight generation from nuclear, as nuclear was unable to ramp up and down to meet the changing profile of electricity demand. As was the case then, and increasingly now, PSH has a vital role in balancing our fluctuating energy demand on the grid.

Energy Systems Benefits

PSH is ideally suited for smoothing the vast majority of fluctuations associated with intermittent wind and solar fleet. It is a proven, reliable technology that can deliver a wide range of services for the energy system across timescales from sub-second to days. With its large spinning turbines, PSH creates inertia and can respond rapidly to the second-by-second needs of the electricity grid. PSH creates resilience, can provide ‘black start’ to ‘reboot’ the grid in the instance of a blackout and can help relieve transmission constraints.

Congestion: There has been an eight-fold increase in the cost of managing congestion on the transmission network since January 2010, and this trend is set to increase to up to £3 billion per year by 2035, even after more transmission and distribution lines are built. PSH built in the right area will help relieve congestion on existing transmission networks by storing the electricity close to the source.

Curtailment: Increased congestion is leading to curtailment costs of up to £62 million per day (according to the National Audit Office). PSH situated in the right location can help prevent curtailment by providing flexible storage at optimum times.

Rebalancing: The Electricity System Operator (ESO), originally envisaged as purely a residual balancer to reposition the market, is increasingly acting more as a central dispatcher, frequently re-dispatching more than 50% of demand (compared to only 10% in 2008). The more flexibility and storage we have on the grid, the more this issue will be alleviated.

The Net Zero Transition

With the right price stabilisation mechanism, the pipeline of projects can deliver an additional storage capacity of 135 GWh to the UK grid within the next five to seven years. These projects are capable of delivering durations of tens of hours and offer the lowest cost of storage £/MWh for the crucial 10–50 hour duration segment, significantly beating batteries on costs per unit of energy stored at durations above six hours. Unlike interconnectors, PSH is fully controllable by the GB electricity market and system operator, offering intergenerational energy security. The pipeline of projects could bring significant additional value of £13.3–14.8 billion GVA and 228,700–253,700 years of employment.

Barriers to Pumped Storage Hydro

PSH is a high-cost capital investment and requires a price stabilisation mechanism to enable investment to be brought forward. The BHA is calling on the government to create policy to allow this to happen in order for PSH to bring the wider benefits to the grid and consumers as shown by:

Imperial College London: If more PSH is deployed, it could deliver grid system cost savings of up to £680 million per year in 2050.

BiGGAR Economics: Detailing the economic value of PSH, a BiGGAR report found that six PSH projects currently under development could deliver £5.8 billion of investment and almost 15,000 years of employment by 2035.

Key Requirements to Unlock Pumped Storage Hydro


The industry is calling on government to bring forward an energy storage policy which recognises that all forms of energy storage must contribute to a stable, operable and secure grid.

This includes providing a ‘Cap and Floor’ price stabilisation mechanism that will allow the PSH pipeline to begin deployment by:

  • De-risking and unlocking investment for these capital-intensive projects in a competitive global investment market, enabling cheaper financing
  • Providing a cap where revenues recover capex and opex and allow for cost of equity (with a system efficiency incentive above the cap)
  • Providing a floor – with a recovery of debt service requirement
  • Protecting developers, owners and operators from global energy price volatility

These decisions must be made now and should be considered a No-Regrets opportunity with low deliverability risk.

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