Pumped storage hydroelectricity (PSH) stores the potential energy of large amounts of water. PSH consists of two water reservoirs with a significant height difference between the lower and the upper reservoir. Reversible turbine-generator assemblies act as both a pump and turbine (usually a Francis turbine design).
When the supply of electricity exceeds the demand, pumps are used to move (pump) the water from the lower reservoir to the upper reservoir, thereby increasing the water’s potential energy. PSH can take in the surplus energy output of renewable energy sources during times of energy over-production. This stored energy can be used at a later time when demand for electricity increases or energy resource availability decreases. When the demand for electricity exceeds supply, then the potential energy is released from the water in the upper reservoir by
allowing it to flow back to the lower reservoir. The water is then led through turbines that generate electricity, which is sent back to the main power grid.
PSH is very efficient in ensuring renewable energy supply is smoothed out over periods of peak energy demand. Worldwide, pumped-storage hydroelectricity (PSH) is the largest-capacity form of active grid energy storage available, and, as of March 2012, the Electric Power Research Institute (EPRI) reports that PSH accounts for more than 99% of bulk storage capacity worldwide, representing around 127,000 MW. PSH energy efficiency varies in practice between 70% and 80%.
According to the Electric Power Research Institute, the installed cost for pumped-storage hydropower varies between $1,700 and $5,100/kW, compared to $2,500/kW to 3,900/kW for lithium-ion batteries. PSH facilities can typically provide 10 hours of electricity, compared to about 6 hours for lithium-ion batteries. Despite these advantages, the challenge of PSH projects is that they are long-term investments: permitting and construction can take 3-5 years each. Moreover, large hydroelectric dams can’t be built just anywhere. Hydro plants need a consistent supply of water and a large amount of land. Some countries have plenty of these resources; others do not.