As artificial intelligence and data centers drive a surge in U.S. electricity demand, power generation will determine the speed of our progress in the AI race. A new report from the National Hydropower Association (NHA) details how the more than 60,000 megawatts of proposed new pumped storage hydropower can help achieve American AI dominance.
Winning the AI Race: Tapping into Pumped Storage Hydropower finds that pumped storage hydropower (PSH) is uniquely positioned to deliver the 24/7, reliability-sensitive power that data centers require, particularly in the Western United States, which is seeing a large increase in data center construction. PSH, initially developed to store excess baseload electricity, has become a reliable way to firm up more variable renewable energy sources in the modern era. These simple yet effective "water batteries" are instrumental in balancing electricity supply and demand.
More than 60,000 megawatts of pumped storage capacity are currently in the regulatory pipeline at the Federal Energy Regulatory Commission (FERC), with roughly 85 percent located in the Western U.S. A recent assessment of untapped opportunities for environmentally-benign "closed-loop" pumped storage found more than 15,000 sites in the United States, yet few new projects are under construction, threatening the grid's ability to meet growing demand.
"Policymakers working to win the AI race are missing a proven solution that's found across America," said NHA's President and CEO Malcolm Woolf. "If the United States intends to win the race to power artificial intelligence and advanced manufacturing, it must first win the race to build reliable power. Pumped storage hydropower is ready. The policy framework and wholesale market design now need to catch up."
Pumped storage is the nation's largest form of long-duration energy storage (8+ hours), accounting for nearly 90 percent of U.S. storage capacity. With its ability to quickly generate gigawatts of electricity and provide essential grid reliability services, the development of new PSH offers a pathway to power new data centers without sacrificing reliability and affordability for consumers.
The report calls for swift federal action, including:
-Modernizing hydropower licensing under the Federal Power Act
-Advancing bipartisan tax legislation to support hydropower upgrades
-Directing FERC to reform market rules to properly value long-duration storage
-Leveraging Department of Energy loan guarantees and grid resilience programs to reduce financing risk
With so much in development and so much at stake, PSH represents one of the most immediate pathways to ensure America's grid can power the AI economy.
To read the full report, click here.
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