July 23, 2026
The Vilarinho das Furnas hydropower plant in Portugal. Image source: International Hydropower Association / EDP.
Spain has awarded €165 million (US$188 million) to seven pumped hydro storage projects totalling around 2.1GW/21GWh, while Portugal has set a target of 1.4GW of new capacity by 2040 as part of a new National Energy Storage Strategy.
The announcements follow the Iberian Peninsula-wide blackout in Spring 2025, since which both countries have taken various steps to accelerate the deployment of energy storage.
Pumped hydro energy storage has huge potential thanks to its scale and inherent ability to provide long-duration energy storage (LDES). However, projects take much longer to be approved and constructed, so there are many more battery energy storage system (BESS) projects being developed, and BESS actually overtook pumped hydro for installed capacity globally last year in gigawatt terms. But every pumped hydro project progressed moves the needle significantly.
