Ethiopia’s energy demand is expected to increase sevenfold in the coming 30 years, resulting in increased variable renewable electricity (VRE) production by solar PV and wind. Energy storage acts as a buffer that mitigates the effects of over- or under-capacity in production by VRE. With 97% of global bulk energy storage, pumped hydro storage is the most widely used and mature energy storage method. With its long operational life, high round-trip efficiency (80%) and stable cost trajectory, it is a beneficial option for many energy systems. However, drawbacks of pumped storage include heavy technical, site-specific restrictions, long construction times and high initial capital investment requirements.

This study investigates if Ethiopia’s energy pathways benefit from adding pumped storage, where to build it, and if storage increases system resilience. The long-term energy planning tool OSeMOSYS is used, which allows for detailed investigation into system dynamics whilst parallelly minimising costs. OSeMOSYS enables the investigation into Ethiopia by looking at an extensive host of techno-economic
specifications and supply and demand dynamics from the electrification of transport and integration of variable renewables to residential cooking demands.

This report discusses thirteen scenarios which are separated into three main categories: Base Case (3), Emission Penalty (EMI) (6) and Varying Wind Capacity and Seasonality (WND) (6). The base case introduces pumped storage to the energy pathways. The EMI scenario characterises three pathways for carbon pricing. In the WND scenario, wind power’s capacity factor and seasonality are altered to
investigate the potential effects of using more accurate local data or prioritising some supply zones on the energy system configuration. Additionally, the most favourable locations for solar PV and wind are combined with potential PHS locations to find optimal sites for storage construction.

The results of the research show that pumped hydro storage is adopted into the energy system in all scenarios, following both a diurnal and seasonal (dis)charge pattern. Variable renewable integration increases by an average of 10% from the addition of storage (78 GWh). The emission penalty increases the electrification of residential cooking demand and boosts VRE penetration but does not integrate
storage integration further than the base case due to reaching the upper limit of the storage capacity set in the planning experiments. Lastly, the changes in capacity factor and seasonality have a marginal effect on the energy pathways.

Pumped hydro storage increases the energy system’s resilience to climate-driven seasonal uncertainties and prices due to fossil fuel and carbon price uncertainties by making it less dependent on fossil fuels, decreasing vulnerability for potential emission penalties and seasonal capacity fluctuations. The introduction of PHS does not increase overall system costs, making it a prime candidate for large-scale energy storage in Ethiopia, combined with the stable levelised cost of storage and high maturity