Hydropower industry leaders have called for a coordinated national policy to support pumped storage hydropower (PSH), launching a new report at the Australian Clean Energy Summit.

The report, Pumped Storage Hydropower: Powering Australia’s Energy Future, was welcomed by Malcolm Turnbull, President of the International Hydropower Association (IHA) and former Prime Minister of Australia. It sets out a case for federal action to accelerate investment in PSH, which is seen as critical to Australia’s long-duration energy storage needs and net zero targets.

“There is a clear need in Australia for the introduction of a co-ordinated national hydropower policy framework and roadmap, to incentivise pumped storage and hydropower investments,” Turnbull said. “Now is a critical time for Australia as energy security has deepened as a political issue. There is an urgent need to consider the amount of large-capacity, long-duration energy storage that will be required to support Australia’s grid in the future.”

The report draws on forums held earlier this year in Brisbane and Sydney, co-hosted by IHA and engineering firm GHD. Those events brought together government and industry leaders to identify barriers to PSH investment. It also builds on IHA’s global guidance released in 2024, which recommended measures to reduce risks for investors in new pumped storage projects.

Despite several PSH projects under development, few have reached final investment decision. Industry leaders say this highlights the need for federal coordination to integrate PSH into the broader energy transition.

Key recommendations from the report include:

  • Recognising pumped storage and conventional hydropower as strategic assets requiring joint federal and state support.
  • Aligning hydropower infrastructure planning with long-duration storage targets.
  • Defining long-duration storage as eight hours or more in policy frameworks.
  • Streamlining licensing and permitting to reduce delays and risk.
  • Creating consistent government support mechanisms for long-life storage assets.
  • Reforming electricity market design to better value firming and balancing services.

The IHA is urging the federal government to consider these recommendations as part of the Expert Panel Review of the National Electricity Market led by Dr Tim Nelson.

According to the report, clear long-duration storage targets, market reforms, and a dedicated hydropower policy framework are needed to ensure pumped storage plays its role in decarbonising Australia’s electricity grid.