The Kruonis pumped-storage hydropower plant complements the one in the Lithuanian city of Kaunas. There are more than 500 of these “water batteries” in the world, and the mountainous geography favors their development in Latin America. Credit: Andrius Aleksandravicius / Ignitis
By Humberto Márquez
CARACAS, Jul 2 2025 – Having hydroelectric power without damming rivers, dismantling the environment or displacing populations is possible in Latin America and the Caribbean, with reversible power plants that take advantage of their mountainous geography, and pave the way for only renewable sources to generate electricity.
“The development of these plants requires areas with a difference in altitude, for two reservoirs, one upper and one lower. And the region has hundreds of possible sites for pumped storage,” said Arturo Alarcón, a senior specialist at the Energy Division of the Inter-American Development Bank (IDB).”These plants requires areas with a difference in height, for two reservoirs, one upper and one lower. And the region has hundreds of possible sites for pumped storage. A recent IDB study identified 179 sites in 11 countries”: Arturo Alarcón.
In countries crisscrossed by mountain ranges, in Brazil and even in the insular Caribbean, there are plenty of areas that could host these hydroelectric dams, says the Bolivian expert. “A recent IDB study identified 179 sites in 11 countries,” he told IPS from Washington.
Traditional hydropower plants dam the waters of a river, creating an artificial lake that provides water to drive turbines in an engine room that generates electricity. This is taken by transformers and transmission lines to consumption centres, and then the water is dumped and the river flows on to the sea.
In contrast, pumped-storage plants are fed with water from a reservoir at a certain height, which supplies the water, usually through a tunnel or canal, does the work in the engine room and deposits the water in a reservoir located at a lower altitude.
When the process is finished – after the hours of electricity generation due to increased demand, required from other sources – the water is pumped back from the lower to the upper reservoir, where it is available to start a new cycle.
These are power plants that can complement solar or wind energy parks, which are fed by solar radiation or wind power, thus subject to hourly and seasonal variations that require energy to be stored in batteries.
Diagram of the operation of a pumped hydro power plant. When the demand for electricity grows, the flow of water from the upper reservoir activates the turbines and, when its contribution to the system is no longer needed, the flow is reversed by pumping from the lower reservoir, leaving the whole as a water battery. Credit: Iberdrola
Supplementary batteries
For this reason, pumped-storage power plants are also called “water batteries”.
By reducing the need for fossil-fuelled thermal power plants, they become tools for decarbonising the entire electricity system.
“Although these plants do not generate more energy than they consume in the pumping process (for every megawatt hour generated, approximately 1.2 MWh is consumed), they do play a critical role in the integration of variable renewable energies such as solar and wind,” says Alarcón.
For example, in Brazil, where about 90% electricity is generated from renewable sources, wind and solar installations are growing, “which depend on weather conditions and there is no constant production throughout the day,” expert Caio Leocádio told IPS from Rio de Janeiro.
“This condition creates a favourable scenario for technologies that meet these requirements, with flexibility and storage capacity, allowing energy to be stored in times of surplus and used in times of greater demand,” says Leocádio, a consultant with the Brazilian Energy Research Company (EPE).
It is not a new technology. Around the world, some 200 gigawatts (one Gw equals 1000 Mw) have been installed in 510 pumped-storage power plants, equivalent to the entire hydroelectric capacity of Latin America.
In the region, the Rio Grande Hydroelectric Complex in the central Argentine province of Cordoba, with its Cerro Pelado and Arroyo Corte reservoirs, 12 kilometres apart, has been in operation since 1986 and has an installed capacity of 750 MWh, which is currently reduced due to equipment obsolescence.
The engine room of the Río Grande Complex, a reversible power plant in the province of Córdoba in north-central Argentina. Credit: Epec
Favorable cost
So far, the level of development of pumped hydroelectricity shows that costs are competitive, although the economic performance of each facility and in each country depends on the type of electricity market.
For example, if it is an electricity market that has hourly energy prices, or that values the ancillary services that reversible plants can provide, such as maintaining a constant voltage despite fluctuations, a good economic performance can be achieved.
In terms of prices, the region has very disparate tariffs. Residential rates in some Caribbean islands exceed 40 US cents per kWh, in Guatemala 29, in Honduras and Uruguay 25, in Colombia 20, in Brazil and Costa Rica 16, in Mexico 10 and in Venezuela six cents, according to the Global Petrol Prices website.
“The installation cost of reversible power plants can be high due to infrastructure and technical needs, but operating and maintenance costs are relatively low once they are up and running,” Alarcón noted.
Nightlife on the famous Copacabana beach in the Brazilian city of Rio de Janeiro. The growing demand for energy and the need to maintain a stable supply with electricity generated from renewable sources opens up opportunities for pumped-storage power plants. Credit: Inoutviajes
In Brazil, “projects of this type really require high initial investments, mainly in civil works and equipment,” Leocádio said. “Values are estimates between US$1,200 and 1,600 per kilowatt (kWh) installed, within the range of medium to large projects in the sector,” he added.
In the Dominican Republic, which is considering installing pumped-storage plants in the areas of Sabaneta (northwest) and Guaigui (centre), of 200 and 300 MWh respectively, installation costs are estimated at between US$1900 and 2400 per kilowatt.
But, on the other hand, experts agree that the projects have a useful life of 50 years or more, and although the return on investment requires a long term, these plants offer a stable and predictable performance.
This is the advantage Leocádio sees in Brazil, with its highly interconnected electricity system and wealth of sites for potential installation. A recent study found that in the state of Rio de Janeiro alone (43 750 square kilometres) there are 15 locations with ideal conditions for such plants.
Brazil’s gigantic Belo Monte dam on the Xingu River has altered watercourses, displaced populations, disrupted indigenous communities, agriculture and other livelihoods, increased deforestation and loss of biodiversity. Pumped-storage power plants can avoid many of these impacts. Credit: Bruno Batista / Vice-Presidency Brazil
Regulation and environment
For Alarcón, “the biggest challenge for this technology in Latin America and the Caribbean is regulatory. Not all electricity markets have adequate remuneration mechanisms for storage technologies or those that provide flexibility to electricity systems,” he said.
Therefore, among the tasks to be addressed in the region, along with investigating the specific areas that have the greatest potential for water batteries, Alarcón identified dialogue between governments and private actors, plus conferences and regional forums “to create a regulatory framework that facilitates these projects”.
That possibility – and also the contrasts – are shown by recent cases in Chile. The Espejo de Tarapacá project, for a 300 MWh reversible power plant that plans to work with seawater, has advanced, but another, Paposo, in the north, was rejected by the Environmental Evaluation Service.
Advocates of pumped-storage power plants point out that their construction and operation require minimal alteration of the environment, as they do not require the diversion or damming of rivers, flooding of towns or farmland, or affecting the areas of indigenous peoples and peasant communities.
Since they do not alter large areas, they do not affect biodiversity, and in some cases can be sources of water for irrigation and sites that beautify or refresh landscapes.
But the central issue is their contribution to the stability of electricity systems and to the decarbonisation required by the Sustainable Development Goals (SDGs), which propose to increase the use of renewable energies along with access to electricity for all peoples.
By February 2025, according to the most recent report by the Latin American Energy Organisation (OLADE), total electricity generation in the region will reach 152 terawatts (Twh, one million megawatts), with 68.1% from renewable sources and 31.9% using oil, gas, coal or nuclear energy.
The largest source of renewable energy is hydroelectric (53.1% of the total), followed by wind (8.5%), solar (4.5%), bioenergy (1.5%) and geothermal energy (0.5%).
