Tipping Point: Global battery storage capacity has surpassed that of pumped-storage hydroelectric power plants

The year 2025 marks an important symbolic turning point in the field of energy storage. According to data from BloombergNEF and the 2025 World Hydropower Outlook published by the International Hydropower Association, the global installed capacity of battery systems reached approximately 257 GW, while the global installed capacity of pumped-storage hydropower (PSH) stood at approximately 202 GW. For the first time, battery storage has surpassed, in terms of installed capacity, the technology that has dominated large-scale energy storage in power grids for decades.

This trend is often interpreted as evidence of a rapid technological shift in favor of batteries. From a technical standpoint, however, these figures should be interpreted with some caution. The comparison is based on installed capacity (GW), not storage capacity (GWh), which is key to assessing actual storage capability.

The typical discharge time for battery storage systems today is most often between one and four hours, while pumped-storage hydroelectric power plants are capable of supplying energy for tens of hours, and in some cases even over multi-day cycles. From the perspective of system balance, pumped-storage hydroelectric power plants therefore remain the most significant source of long-term energy storage.

“The global development of battery storage is opening up new opportunities in the Czech market as well, particularly in the area of balancing services (SVR). The rapid response of batteries makes them an ideal technology for frequency regulation and other ancillary services. Moreover, thanks to their modularity and scalability, they represent a flexible solution applicable both at the level of large-scale sources and within corporate energy systems.

For investors and companies interested in actively managing their energy portfolio, this presents an opportunity to enter the flexibility market and thereby optimize asset management, generate additional revenue from SVR, and contribute to grid stability. At the same time, however, the market may quickly become saturated, which, with the growing number of projects, could put downward pressure on returns; therefore, timely entry into this segment will be crucial.

"The success of these projects will therefore depend on timing, the right business model, an appropriate market strategy, and a realistic risk assessment—we can assist our clients with a comprehensive evaluation of their battery storage investment plans.”

Jiří Dvořák, Partner, Advisory

The Context of Hydropower and the Role of Pumped Storage in a Changing System

The World Hydropower Outlook 2025 confirms that hydropower as a whole remains the largest renewable source of electricity in the world, with an installed capacity exceeding 1,440 GW and annual production of around 4,600 TWh. In 2024 alone, approximately 24.6 GW of new hydropower capacity was commissioned globally, of which roughly one-third was accounted for by pumped-storage hydropower plants. The total installed capacity of pumped-storage hydropower thus continues to increase slightly, although the pace of its development is significantly slower than that of battery systems.

The main reason for this difference in dynamics is not the technical obsolescence of pumped-storage hydropower, but a combination of geographical, environmental, and permitting constraints. The construction of pumped-storage power plants is capital-intensive, time-consuming, and in Europe often runs up against the limits of land-use planning and landscape protection. In contrast, battery storage benefits from modularity, short implementation times, and the ability to be installed virtually anywhere in the grid, including near consumption or generation points.

Current developments therefore do not signify the replacement of pumped-storage hydroelectric power plants with batteries, but rather a gradual specialization of their roles. Battery storage is becoming the dominant tool for short-term flexibility, rapid power regulation, the provision of ancillary services, and local grid optimization in systems with a high share of photovoltaic and wind power. Pumped-storage plants, on the other hand, remain a key element of long-term storage, capable of balancing larger and longer-lasting imbalances between generation and consumption, with high operational reliability and a lifespan of several decades.

From the perspective of the future structure of energy systems, including conditions in the Czech Republic and Central Europe, this trend is fundamental. Data from 2025 clearly show that the energy transition will not rely on a single storage technology. Instead, a hybrid model is emerging that combines the rapid flexibility of battery systems with the robust long-term stability of pumped-storage hydroelectric power plants and, gradually, with new long-term storage technologies. It is precisely the ability to combine these tools appropriately that will be one of the key prerequisites for the secure operation of power grids under conditions of a high share of variable renewable sources.

The text was originally published on the website oenergetice.cz

This text was translated by AI