I understand the principle and wondered why this idea was not thought of long ago. The answer is scale - the pumped storage lake (PSL) would need to be many times the size of the hydro power station lake it augments unless the backup the PSL represents is a stop-gap measure designed to last just a few days. Given that recent droughts have lasted months this does not appear to be the answer to insufficient hydro storage during a drought period.
The press release cited has no technical detail (because its purpose is to publicise the funding it announces). The larger the PSL is the greater the RMA approval obstacle, as well as construction costs, site availability etc. Does anyone on GZ know more about the technical detail on this?