Author: Dennis Hogan, Vice President, Global Lead for Hydropower & Dams, AECOM

On World Hydropower Day 2025, I’m reflecting on a technology that’s quietly enabled clean energy for over a century and is now poised to play an even greater role in our decarbonised future. In September, I joined industry leaders at the International Forum for Pumped Storage Hydropower in Paris, where I spoke on a panel titled “Getting pumped storage hydropower built in North America.” We explored the barriers to deployment and the strategies needed to harness the full potential of this essential long-duration storage solution.

Barriers to deployment

Despite its unmatched ability to store energy at scale and stabilize the grid, pumped storage hydropower (PSH) faces significant hurdles across North America. During the panel discussion, I spoke about several key challenges:

• Regulatory complexity: Lengthy and fragmented permitting processes — often spanning a decade or more — create uncertainty and delay investment.

• Market signals: Current market structures don’t adequately compensate the flexibility and reliability PSH provides, making long-term revenue difficult to secure.

• Grid planning gaps: Pumped storage is frequently overlooked in integrated resource planning, limiting its visibility in future energy system designs.

• Environmental and public perception concerns: While modern designs are increasingly sustainable, outdated views of large infrastructure projects can slow community and stakeholder support.

These barriers aren’t insurmountable, but addressing them requires coordinated action across policy, planning, and public engagement.

Drivers for change

While the challenges are real, the momentum behind PSH is growing, and with good reason. As the energy transition accelerates, the need for flexible, reliable, and long-duration storage has never been clearer. The panel highlighted several key drivers reshaping the landscape:

• Grid decarbonisation goals: Utilities and grid operators are under pressure to integrate more renewables while maintaining reliability. Pumped storage helps balance variable generation and support system stability.

• Federal policy support: The Inflation Reduction Act (IRA) introduced major incentives for clean energy infrastructure. For the first time, PSH is eligible for the Investment Tax Credit (ITC), which can cover 6% to 50% of project costs. With the ITC expected to remain in effect until at least 2033, developers have up to eight years of tax certainty, a critical window for long-lead projects.

• Resilience and reliability needs: A fellow panelist referenced the Polar Vortex that impacted the Texas grid in 2021. Extreme cold led to widespread outages and exposed vulnerabilities in energy systems lacking sufficient storage and flexibility. It was a stark reminder of why long-duration solutions like PSH are critical to grid resilience, especially as climate-driven weather extremes become more frequent.

• Growing recognition of value: As market operators and regulators begin to quantify the full value of storage, including ancillary services and avoided curtailment, pumped storage is gaining visibility as a strategic asset.

• Increased market acceptance: A standout example is Google’s recent $3 billion agreement with Brookfield Renewable to secure up to 3,000 megawatts of carbon-free hydroelectric power for its U.S. data centers. The deal is the largest corporate hydropower procurement in history. It reflects a broader shift toward reliable, long-duration clean energy to support AI and cloud infrastructure at scale.

These drivers are aligning to create a window of opportunity. Seizing it will require bold thinking, collaborative planning, and a willingness to reimagine how we build and operate energy systems.

Solutions and collaboration

Overcoming the barriers to PSH deployment will require more than technical innovation. It demands strategic collaboration, policy reform, and a shift in mindset. The Paris panel underscored that progress is possible when stakeholders work together across sectors and borders. Key solutions included:

• Streamlining permitting: Coordinated efforts between federal and state agencies can reduce duplication and accelerate timelines, without compromising environmental safeguards. In the US, the National Hydropower Association is making solid progress with regulatory efficiency.

• Creating clearer market mechanisms: Long-term contracts or capacity payments for storage services can provide the revenue certainty developers.

• Embedding storage in grid planning: Utilities and regulators must proactively include PSH in integrated resource plans, recognizing its role in balancing renewables and enhancing resilience.

• Building public trust: Transparent engagement with communities, sharing the environmental and economic benefits of modern pumped storage, can help shift perceptions and build support.

• Learning from global experience: Countries with mature PSH fleets offer valuable lessons in policy design, financing models, and stakeholder alignment.

I’m proud that AECOM is currently supporting the engineering design for two of the primary pumped storage projects that reflect these principles in the US. The Salt River Project in Arizona could provide up to 2,000 MW of energy storage capacity. The Lewis Ridge Project in Kentucky will create 2,300 construction jobs and enough energy to power about 70,000 homes. These projects show how PSH can deliver not just grid benefits, but real economic and social value to communities.

In summary

The message from the forum was clear: pumped storage is ready to scale, but it won’t happen in isolation. It will take shared vision, policy alignment, and bold leadership to turn potential into progress.

As we mark World Hydropower Day, it’s clear that pumped storage hydropower is a cornerstone of our clean energy future. The insights shared at the Paris forum remind us that while the path to deployment in North America is complex, it’s also navigable. With the right mix of policy support, market reform, and collaborative ambition, PSH can help deliver the reliability, flexibility, and resilience our energy systems need. The time to act is now, because building the future of energy means investing in the solutions that can sustain it.