As per the 2019 edition of the BP Statistical Review of World Energy report, in 2018, the worldwide demand for energy grew by 2.9%, which was significantly higher than the previous 10 years’ average of 1.5%. This was a result of the increasing population around the world, especially in Asia-Pacific (APAC) and Latin America, which is leading to the rising demand for residential, commercial, and industrial infrastructure. With the rising consumption of electricity, the emission of greenhouse gases (GHG) has also increased, finally reducing in 2019, as per the International Energy Agency (IEA).


There are three major types of mechanical energy storage systems: compressed-air energy storage (CAES), flywheel energy storage (FES), and pumped hydro storage (PHS). Among these, PHS is the most widely deployed technology around the world, because, using it, almost 80% of the energy can be recovered. A PHS system is much like a conventional dam-based hydroelectricity system, involving the storage of water in reservoirs created at different altitudes; only here, the water is not released into the river, but sent back and forth between the two reservoirs.


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During periods of low electricity demand, the water from the lower reservoir is pumped to the higher one, which leads to the creation of potential energy. When the energy demand increases, the water from the upper tank is led into the lower one at a great speed, to drive the turbine–alternator system to produce electricity. After the demand–supply gap reduces, the water from the lower reservoir is again pumped back to the upper one. The reason this technology is so popular is that its scientific principle is quite simple and other mechanical storage technologies are not able to produce such a high power output.


Geographically, APAC accounts for substantial share in the mechanical energy storage market, on account of government investment in energy storage solutions, mainly in economies like China and India. For instance, the India Energy Storage Alliance (IESA) estimates that the market for energy storage will grow to over 300 GWh in 2025 and will need an investment of $3 billion. Whereas, North America also plays a vital role in the growth of the market, owing to the increasing demand for electricity storage systems.