Fragmented Renewables Growth to Bolster Pumped Hydropower Storage In Asia
A new report from Fitch Solutions power service expects pumped hydropower will see sustained capacity growth as intermittent renewable generation rises, though the nature of pumped hydropower projects poses challenges for global adoption.
As of end-2021, the North America and Western Europe (NAWE) region has the largest pumped hydropower capacity globally, though the scope for more pumped hydropower projects will be limited.
Fitch however expects Asia to outperform other regions for pumped hydropower capacity growth, overtaking NAWE’s installed pumped hydropower capacity in 2023, with developments chiefly concentrated in Mainland China.
With the rapid expansion of renewables, pumped hydropower storage will continue to be utilised as an energy storage solution as a means to solve the intermittency issue with renewables.
Additionally, with the increasing number of floating solar power projects, some of which have been located on reservoirs of pumped hydropower stations, Fitch expects the increasing attractiveness of projects that couple floating solar with pumped hydropower.
However, due to the large-scale nature and dependency on water resources of pumped hydropower storage, markets are required to have access to water reservoirs at high altitudes before considering the development of pumped hydropower storage.
This is a geographical limitation of the energy storage type, which makes it challenging for global adoption, especially for markets with flat terrains and a lack of major rivers or reservoirs.
Asia to Outperform
For markets that are unable to adopt pumped hydropower, renewables uptake will have to go in hand with other forms of energy storage solutions. Regardless, pumped hydropower storage will remain the key energy storage solution over the coming 10 years.
Asia is set to outperform other regions for pumped hydropower capacity growth, overtaking NAWE’s installed pumped hydropower capacity in 2023, with developments chiefly concentrated in Mainland China.
With the pumped hydropower project pipeline strengthening in Asia, Fitch expects Asia to overtake NAWE in 2023 to be the region with the largest pumped hydropower capacity for the subsequent years to 2031.
Fitch forecasts that Asia’s pumped hydropower capacity will grow from 70GW in end-2021 to 82GW in 2023, and then to 134GW in 2031. Mainland China will be chiefly responsible for this surge in growth.
Other markets in Asia with existing pumped hydropower capacity, such as Australia, Japan, Thailand and Indonesia, also have projects in the pipeline set for commissioning within the next ten years, as they explore capitalising on the availability of water reservoirs available for pumped hydropower developments.
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