Pumped storage is a method of storing energy by using two water reservoirs at different elevations. During periods of low electricity demand, excess energy is used to pump water from the lower reservoir to the upper one. This process converts electrical energy into gravitational potential energy. When electricity demand increases, the stored water is released back down to the lower reservoir, passing through turbines that generate electricity. This system helps balance supply and demand, making it an important part of the energy grid, especially for integrating renewable sources like solar energy and wind energy.