The stability of the grid is jeopardized with the large percentage of non-dispatchable renewables like wind power and also with increasing solar power. This creates various problems because these forms of energy are very volatile and difficult to predict. In most countries the in-feed of these sources must not be curtailed. In addition most of the renewables do not provide short circuit capacity and inertia in the same way as classical units and so further worsen the stability of the grid. The growing exploitation of wind and solar might be limited due to grid stability problems. In order to compensate those problems a large amount of reserve capacity is needed and therefore new technologies for electricity storage are required. Hydraulic pumped storage—the classical storage technology—has some disadvantages. These plants are in mountain regions often far away from wind farms. The distance to the wind farms mean additional loading for the already stressed grid and additional transmission losses. To compensate the very volatile wind energy, the pump input power should be varied continuously. This is so far only possible with variable speed units. Up to now double-fed asynchronous motor-generators are used which are rather expensive. In order to provide a solution for the described situation, ANDRITZ HYDRO has developed a new innovative concept of decentralized pump storage plants. Small standardized pump turbines are combined with a synchronous motor-generator and a full size converter which allows speed variation in pump and turbine mode over a wide range. These plants can be built locally close to wind farms and other sources to be balanced, allowing the increase of renewable energy without increasing the transmission line capacity. For the future smart grids this will be a key storage technology. This concept is reliable, innovative and more economic than other storage technologies.