According to the authors of the newly released report, the United States can secure its lead in the artificial intelligence race by deploying pumped storage hydropower to provide the continuous, high-capacity electricity required by modern data centers. This technology functions as a massive “water battery,” stabilizing the power grid and ensuring that energy is available exactly when and where advanced manufacturing and AI systems need it most.
The report notes that “PSH is uniquely positioned to help policymakers expand grid capacity, accelerate interconnection of large loads, and ensure the reliability and affordability of power as demand from data centers that power AI and advanced manufacturing continue to rise.” It further asserts that “the construction of new PSH is one of the best ways to ensure America can meet data center demand as AI use grows and address concerns from local communities about energy reliability and affordability.”
Basically, these systems store energy by pumping water uphill to a high reservoir when electricity is cheap and abundant. When demand peaks, the water is released back downhill through turbines to generate power immediately. Because these “water batteries” can provide electricity for eight hours or longer—far exceeding the capacity of standard chemical batteries—they are essential for keeping the power grid steady and preventing interruptions to the specialized computer centers used for AI.
The report “Winning the AI Race: Tapping into Pumped Storage Hydropower” was published by the National Hydropower Association in March 2026. Produced by the association’s policy experts in Washington, D.C., the document provides a strategic roadmap for leveraging long-duration energy storage to meet the surging power demands of data centers and advanced manufacturing.
