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Conventional pumped hydro uses two water reservoirs, separated vertically. During off peak hours water is pumped from the lower reservoir to the upper reservoir. When required, the water flow is reversed to generate electricity. Some high dam hydro plants have a storage capability and can be dispatched as a pumped hydro. Underground pumped storage, using flooded mine shafts or other cavities, are also technically possible. Open sea can also be used as the lower reservoir. A seawater pumped hydro plant was first built in Japan in 1999 (Yanbaru, 30 MW).

Pumped hydro was first used in Italy and Switzerland in the 1890's. By 1933 reversible pump-turbines with motor-generators were available. Adjustable speed machines are now being used to improve efficiency. Pumped hydro is available at almost any scale with discharge times ranging from several hours to a few days. Their efficiency is in the 70% to 85% range.

There is over 90 GW of pumped storage in operation world wide, which is about 3 % of global generation capacity. Pumped storage plants are characterized by long construction times and high capital expenditure.

Pumped storage is the most widespread energy storage system in use on power networks. Its main applications are for energy management, frequency control and provision of reserve.

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