A wave of policy announcements and new data from across Europe show pumped storage becoming increasingly relevant for a secure, low-cost, renewables-based grid. In the space of a few days, Portugal has unveiled a national storage strategy with dedicated pumped storage targets, Great Britain's energy regulator has provisionally selected three pumped storage projects to be amongst the first projects to benefit from its new long-duration storage support scheme, and the International Hydropower Association's (IHA) 2026 World Hydropower Outlook has confirmed Europe's development pipeline for pumped storage has reached 59 GW and an estimated electricity storage capacity of more than 500 GWh. This is enough to sustain the energy for 1 million houses in Europe for two months.

Together, the developments illustrate a continent grappling with an increasingly urgent problem: record levels of renewable curtailment and negative electricity pricing, driven by the rapid build-out of wind and solar without matching investment in flexibility and storage.

As the latest Eurobarometer survey shows, defence and security (39%), energy independence (35%) and competitiveness (32%) are among the top priorities Europeans believe the EU should focus on to strengthen its position in the world. To meet Europeans' priorities, accelerating renewable-powered electrification, alongside investment in long-duration storage, will be key to strengthening energy independence, boosting competitiveness

Eddie Rich, Chief Executive Officer of the International Hydropower Association said:

"The data shows that there are huge benefits to pumped storage – huge reductions in energy system costs, and in emissions, plus more jobs and securer supply chains. The progress is encouraging. However, these are large, complex projects that take years to deliver, so governments cannot afford to wait to start. We applaud the recent commitments from Portugal and Great Britain."

Portugal sets targets for pumped storage and batteries

Portugal presented its new national storage strategy on 29 June, explicitly recognising the role of long-duration energy storage (LDES) in supporting renewable integration, reducing curtailment, strengthening security of supply and lowering overall system costs.

The strategy sets targets for both battery storage and pumped storage hydropower, with pumped storage capacity expected to grow from around 3.5 GW today to 3.9 GW by 2030 and 5.26 GW by 2040.

Great Britain advances cap-and-floor scheme, backing pumped storage

On 26 June, Ofgem marked a significant step forward for long-duration electricity storage (LDES) in Great Britain, moving its support programme from eligibility assessment into the next phase of project selection.

Following a rigorous eligibility assessment, Ofgem published a "Minded-to-Decision" list setting out which projects have been provisionally selected for support under the LDES cap-and-floor scheme. In total, 16 projects were identified, forming a portfolio expected to reduce system costs by easing pressure on transmission and distribution networks and reducing the need for costly new infrastructure or constraint management payments.

The scheme is one of the clearest examples yet of a national capacity mechanism designed specifically to de-risk investment in long-duration storage, a model other European markets are now watching closely. Notably, the selection criteria extended beyond cost to include security of supply, avoided curtailment potential, and broader economic and social impacts.

Among the technologies considered, including compressed air energy storage, lithium-ion batteries, and vanadium redox flow batteries, the three pumped storage projects played a dominant role, accounting for two-thirds of the total energy storage capacity procured (approximately 88 GWh) and more than half of the total installed power capacity (nearly 4 GW).

World Hydropower Outlook 2026: the numbers behind the momentum

IHA's newly released 2026 World Hydropower Outlook confirms this momentum:

• Europe added 1,533 MW of new hydropower capacity in 2025, including 725 MW of pumped storage, bringing the region's total installed hydropower capacity to 263 GW. This has been the strongest addition of pumped storage in several years.
• Europe's identified development pipeline now includes 59 GW of pumped storage projects alongside a further 8 GW of conventional hydropower.
• Policy momentum is building across the region, with EU-level reforms and national mechanisms (such as the UK's cap-and-floor scheme) helping to unlock investment in long-duration storage.

Pumped storage remains the world's dominant large-scale energy storage technology, and IHA's data shows it is increasingly being treated as strategic infrastructure by governments confronting climate volatility, grid congestion and the growing cost of renewable curtailment.

As IRENA noted in its own recent analysis: "Hydropower's role as a provider of flexibility, storage and water-management services is becoming increasingly strategic, as variable renewables expand."

Despite this progress, barriers remain. The 2026 World Hydropower Outlook identifies permitting delays, grid congestion and insufficient market signals for flexibility services as continuing constraints on new hydropower and pumped storage development. Addressing these challenges will be essential if Europe is to unlock its substantial pipeline of projects and meet its energy security and decarbonisation objectives.