At the 2025 Pumped Hydropower Global Conference in Paris, Malcolm Turnbull, former Prime Minister of Australia and current President of the International Hydropower Association (IHA), opened with a nod to Charles Dickens. While he quoted David Copperfield, the mood in the room perhaps felt closer to A Tale Of Two Cities.
Across the Americas, EMEA, and APAC, delegates lamented a lack of government support for pumped storage hydropower (PSH). Meanwhile in China, 7 GW of new PSH capacity was added in 2024 alone and over 80GW is planned. This contrast reflects the split reality of the sector: one region building at speed, others struggling to get projects off the ground.
The fundamentals are clear. PSH offers what no other technology can: high capacity long-duration storage, spinning reserve, black start capability, and a proven 50–100 year lifespan. Despite this, many markets still fail to financially recognize these essential services.
There are two types of PSH. Closed-loop systems, built around two purpose-built reservoirs with minimal connection to a natural watercourse. These behave more like engineered storage assets — once filled, their operation depends less on hydrology and more on grid needs and reservoir management.
Open-loop systems, where at least one reservoir interacts directly with a river or natural catchment. These projects bring additional benefits, such as multipurpose water use and integration with existing hydropower facilities. But they also face greater challenges: inflow variability, drought and flood exposure, sedimentation, and climate-driven changes to water availability.
For open-loop systems, hydrology is critical.
Much of the debate in Paris focused on financing, policy, and market design. But beneath these ongoing discussions lies an equally fundamental question: will the water be there?
Unlike closed-loop PSH, open-loop systems depend directly on inflows and long-term water supply. Investors and asset owners are rightly cautious. Financing timelines rarely extend beyond 25 years, while PSH facilities may operate for a century. Projecting future water availability further complicates the picture. While variability in climate raises the stakes for droughts, floods and sedimentation risks, its effects can also effectively be mitigated through storage.
This is why hydrologic data is critical. Reliable, data-driven insights into catchment health and long-term water availability can mean the difference between a bankable project and one that never leaves the drawing board. However, financial returns, flood and drought tolerance and other benefits are not something valued by the world’s energy trading markets. These projects require governments to step in.
At Upstream Tech, we provide the tools to bridge this gap. Using remote sensing, hydrologic modeling, and climate data, we help:
Closed-loop systems may dominate headlines for speed of construction, but open-loop projects remain central to global pumped storage potential — and they can’t succeed without rigorous, climate-informed hydrology.
The conference made it clear: pumped storage is critical to reaching a 100% renewable future. Smarter hydrology will be the key to unlocking it.
To learn more about our AI-powered hydrology model, HydroForecast, please reach out to our team.