All Access

Climate Deals

Standard

Climate Deals Thought Bubble

Thought Bubble

Climate Deals Alerts

Alert

mustard

BFD Expert Voices - Climate Deals

BFD Expert Voices

Companies building power hungry data centers are looking at pumped hydro projects for storage.

Why it matters: AI is fueling demand for the facilities, which require massive amounts of electricity to run.

How it works: Pumped hydro storage projects are commonly designed with two water reservoirs at different elevations, storing energy via gravity. As the water flows from the upper to lower pool, it generates power.

The U.S. has 43 of these projects running today but no new projects under construction.

Driving the news: Last week, hydropower developer Rye Development was awarded an $81 million grant from the Department of Energy to help build a $1.3 billion, 287 MW pumped storage hydropower facility on a former coal mine in Kentucky.

The project is the first of its kind in more than 30 years.

"We're starting to see group interest from some of the folks in the data center space," says Rye Development CEO Paul Jacob. Jacob noted that the predominant off-takers today are still largely utilities.

The Biden administration, through the Inflation Reduction Act and the Bipartisan Infrastructure Law, is helping to incentivize pumped hydro storage projects.

Zoom in: Many of the biggest data center operators that are run by U.S. consumer companies want clean energy for their facilities.

But since wind and solar are intermittent, storage projects provide backup power when the sun and wind aren't generating energy.

Amazon says in its 2022 sustainability report that it has 445 MW of energy storage capacity as of the end of 2022.

The big picture: The pumped hydro under pursuit reveals the lack of better commercial options for large, long-duration storage.

In fact, most new utility-scale storage projects are being built using lithium-ion batteries. Other technologies include new battery chemistries from Form Energy and new designs from Energy Vault and Energy Dome.

What's next: We'll be watching to see if data center operators become off-takers for pumped hydro storage projects, and in particular the Kentucky coal mine project.

Data center operators eyeing pumped hydro storage

There's a renaissance emerging for pumped hydro

Animated illustration of a glowing data center with four bolts of lightning feeding electricity into it.

Artificial intelligence

Companies building power hungry data centers are looking at pumped hydro projects for storage.Why it matters: AI is fueling demand for the facilities, which require massive amounts of electricity to run.

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

charlotte

boulder

detroit

kansas-city

columbus

austin

dallas

atlanta

washington-dc

nw-arkansas

chicago

indianapolis

nashville

richmond

colorado-springs

houston

san-francisco

seattle

boston

des-moines

salt-lake-city

philadelphia

denver

phoenix

new-orleans

miami

twin-cities

raleigh

san-antonio

portland

san-diego

tampa-bay

cleveland

huntsville

pittsburgh

axios-local

axios-pro

axios-live

the-axios-show

Data center operators eyeing pumped hydro storage

What to read next