Remember that just at the moment there is a distinct shortage of water. I agree that being able to pump water back to a "head" dam in effect becomes stored energy and could power a hydro electric power station and this could be the solution to storage batteries. which still are not at an economic point right now. I heard recently that solar power has become as cheap as any other form. I believe that is correct and incorrect. For a given megawatt that may be true (I don't really know exactly but I am prepared to concede it is close enough) but to keep the sums simple I work on a maximum of eight hours that our solar panels or solar thermal is operable. Ian has suggested it is closer to five hours. It will depend on the time of year and country of origin
Let's assume Australia during the summer as a best scenario. If we only produce power for a third of the day we need to be able to produce three times that amount for it to be the equivalent of a thermal station and we have to have a place to store it. Consequently for the cost of solar power to equate to other electricity production it has to have at least three times the capacity (probably more like four times when averaged through the year) and a a storage facility. This is where a dam could substitute for batteries, which is probably the first image that comes to mind when electricity storage is mentioned.
Problems:
1. Dams are not necessarily where the transmission lines already exist.
2. There has to be sufficient water (The DC link between Tasmania and the Mainland was put in for Tasmania not the other way around: It was in case Tasmania ran out of water)
3. Who is going to put these installations in place? The various governments have moved towards privatisation. At least solar allows smaller enterprises to be considered.
4. Solar farms have recently cried foul because there were no transmission lines provided for them. Who did they think was going to do this? What part of private enterprise did they not understand?
I don't really agree with privatisation of major utilities, but this is what successive governments have done in the quest for a quick buck and an attractive looking bottom line. It was the agricultural equivalent of selling off your breeding herd.
Regards
Paul