Battery Storage Poised to Surpass Global Pumped Hydro Capacity

In less than a decade since the inception of the world’s first major battery, the Tesla big battery at Hornsdale, battery storage capacity is poised to surpass that of pumped hydro technology. Marek Kubic, co-founder of Fluence and now part of Neom in Saudi Arabia, highlighted this upcoming milestone on LinkedIn, emphasising the exponential growth of battery storage and its maturation as a technology.

Kubic’s analysis, projecting battery storage to overtake pumped hydro by 2025, underscores the rapid evolution of the energy storage landscape. Despite initial perceptions of battery storage as immature, data from the past five years reveal a remarkable surge in battery capacity compared to pumped hydro.

For instance, in 2020, pumped hydro constituted 90% of installed grid storage, but by 2024, this figure is expected to drop to just 56%, signalling a significant shift in the balance of power. BloombergNEF forecasts further acceleration in battery storage capacity additions, indicating its increasingly vital role in global power grids.

This trend carries particular significance in regions like Australia, where scepticism about battery technology’s maturity persists despite its growing prominence elsewhere. However, the numbers speak for themselves: with over 1.7 GW of battery storage currently operational and another 3.2 GW under construction, along with ambitious future projections, battery storage is rapidly becoming a cornerstone of energy infrastructure.

While pumped hydro historically offered longer storage durations, recent advancements in battery technology are closing the gap. New projects are incorporating longer storage durations, enabling them to address evening peak demand and optimise the utilisation of renewable energy sources like solar.

Kubic suggests that both battery storage and pumped hydro will have complementary roles, with batteries providing flexibility and rapid response while pumped hydro addresses longer-term storage needs. Crucially, he emphasises the ongoing learning curve for battery storage, with continued improvements in cost, density and performance expected as the technology scales up.

Ultimately, the trajectory of battery storage indicates a promising future, characterised by sustained growth and innovation, poised to reshape the energy landscape in the years to come.