Pumped Storage Hydropower: Powering Southeast Asia's Energy Future

The demand for reliable, renewable energy is growing across Southeast Asia as nations work to address rapid urbanization, industrialization, and climate concerns. In this context, pumped storage hydropower ("PSH")—involving two water reservoirs at different elevations that can generate power as water moves down from one to the other, passing through a turbine—is emerging as a potentially game-changing solution to balance energy supply and demand, providing crucial support for grid stability while facilitating the integration of renewables.

Rising Energy Demand and the Role of PSH

Southeast Asia's energy demand is rising sharply due to population growth and economic expansion. Urbanization and industrialization are accelerating the need for power across the region, pushing governments to explore a broad array of energy sources. Owners and operators of traditional energy infrastructure, which primarily rely on fossil fuels, are facing increasing pressure to adopt renewable energy alternatives, but must also grapple with the inherent challenge of intermittency that renewable power generation poses. To manage fluctuating energy needs during peak and off-peak hours, pumped storage hydropower offers an effective renewable energy storage solution. By storing energy during periods of low demand and releasing it when demand peaks, PSH helps ensure a steady supply of electricity without relying on traditional "baseloads" generated by fossil fuel-based power plants.

As countries across Southeast Asia—such as Vietnam, Thailand, and the Philippines—invest in renewable energy sources like solar and wind, the challenge of managing intermittency has come into sharper focus. These renewable sources are highly dependent on weather patterns and time of day, leading to periods of overproduction or shortfalls in supply. Pumped storage hydropower plays an essential role in addressing this intermittency. By capturing excess renewable energy and storing it for future use, PSH smooths out these fluctuations, helping maintain grid stability and prevent blackouts.

With its long-proven track record, pumped hydro is one of the most mature and efficient technologies for large-scale energy storage. Southeast Asian countries are focusing on PSH as a reliable backup option that can store surplus renewable energy and release it on demand, reducing the need for new fossil fuel-based power plants to manage peak loads. PSH systems contribute to a cleaner energy grid by helping countries avoid the short-term spikes in carbon emissions that often accompany ramping up non-renewable power sources.

Geographical and Economic Advantages

Many countries in the region, including Laos and Indonesia, are ideally positioned for pumped storage projects due to their mountainous terrains, abundant water resources, and favorable geography. These natural advantages make it easier to implement PSH systems on a large scale. In terms of cost, while the initial capital investment in pumped hydro is relatively high, the long operational lifespan of these systems, coupled with low maintenance costs, makes them economically competitive when compared to other energy storage options like battery storage. Over the long-term, PSH offers Southeast Asian countries a cost-effective way to meet their energy storage needs while reducing their dependence on fossil fuels.

Government Policies and International Collaboration

Several Southeast Asian nations are advancing policies aimed at reducing carbon emissions and promoting renewable energy. Governments in Thailand, the Philippines, and Indonesia, among others, have implemented renewable energy targets that encourage the development of energy storage solutions, including pumped hydro. For example, the Philippines' Department of Energy is aiming to offer 3.1 GW of pumped hydro capacity as part of its Green Energy Auction Program, while Vietnam is aiming to reach 2.4 GW of pumped hydro by 2023 under the Power Development Plan 8.

These efforts are often supported by international organizations and financial institutions that provide funding and expertise for sustainable energy projects. For example, the International Hydropower Association launched its Southeast Asian office in Jakarta, Indonesia, with the view to facilitate international collaboration on hydropower projects and track hydropower development in the region. 

Challenges and the Path Forward

Despite its advantages, pumped storage hydropower faces some challenges. As mentioned, the initial capital investment is high, and suitable locations for new projects can be limited. Licensing processes and environmental concerns, such as the potential impact on local ecosystems and communities, also may pose obstacles. However, with technological advancements and strong government backing, these challenges are increasingly being addressed. Looking ahead, the economic competitiveness and long-term benefits of PSH will likely drive further adoption across Southeast Asia.

In conclusion, pumped storage hydropower is positioned to play a central role in Southeast Asia's energy future. By providing reliable energy storage, supporting the integration of renewables, and enhancing grid stability, PSH is helping countries meet their growing energy needs while transitioning toward a less carbon-intensive energy system. As investments in these projects grow, Southeast Asia will continue on its path to achieving a greener energy landscape, contributing to global efforts to combat climate change.

Bonnie Song, an associate in the Singapore Office, contributed to this article.

Read the full Climate Report.