Also, the volcanic geology of Hawaii means you want to have a very reliable seal on the bottom of that reservoir or you will be leaking tons of salt water into

Also, the volcanic geology of Hawaii means you want to have a very reliable seal on the bottom of that reservoir or you will be leaking tons of salt water into the local groundwater system. Possible, as modern landfills are sealed this way, but much more expensive than a fresh water lake. Not sure it has ever been done, actually. As for damning off a bay; that does not work so well as you would want a decent elevation drop for energy storage. Edit: Reading over the Ludington pumped station wikipedia page, it does have a sealed bottom. It is on another naturally porous geologic setting, sand dunes, and is above the water table. Thus the need for a sealed reservoir.