Pumped hydro storage is the oldest form of electricity storage around. It's been used for decades. How it works is simple. When electricity demand is low (the wholesale electricity price is low) water is pumped from a lower reservoir to an upper one. When demand is high (wholesale price is high) water is released from the upper dam, flows down through the turbines, which generate electricity to produce power. The price differential covers the cost of the pumped hydro facility.
I've talked about molten salt storage, battery storage, and molten silicon storage. But I've more or less ignored pumped hydro before, because I confused it with conventional hydro, which requires large dams and strong river flows. The chart below shows the difference.
One further chart is interesting. It shows the potential for pumped hydro to make a profit based on .
the difference between peak and trough wholesale prices. Notice how as storage hours rise, the incremental profit ("arbitrage") starts to decline., Up to 4 hours of electricity, profit rises, but from 6 hours to 10 hours there's no incremental improvement.
I won't reproduce the whole presentation here. Read it for yourself. It's quite fascinating. But also read this article, which makes a strong case for pumped hydro on cost grounds. The author says that 5 hours of pumped hydro storage would add just 25% to the cost of solar.
Pumped hydro is the perfect complement to renewables. On the costing charts provided (slide 27 and 30), pumped hydro seems cheaper than batteries. But even if it's the same, it can play a part in our switch to renewables, because diversification isn't just good for supply, it's also good for storage.