The aim of this paper is to explore the storage and pump-storage application of small hydropower as an example of co-evolution between institutions and technologies. The context of the research is given by the liberalisation of the electricity sector and the government’s aim to increase the part of renewable energy technologies (RET) within the electricity production mix. As a consequence, the part of intermittent RET such as wind and solar power is increasing significantly. Furthermore, the electrical grid is becoming “smarter” with the implementation of ICT which may significantly change how the electricity network is operated locally and regionally. Within the facilitation of RET, quantity (i.e. kWh) as well as ‘quality’ should be promoted. RET need to contribute to peak electricity, be available on demand and also be part of the balancing of the electrical grid frequencies. If this is not the case, the facilitation of RET is incoherent as it focuses only on quantity, and not on the sector specific technical aspects such as the real-time balancing of demand and supply. The storage, and where technically and environmentally feasible, the pump-storage application of small hydropower (SHP) appears to be an option for distributed peak electricity, regional integration of intermittent RET and grid balancing. SHP being part of the facilitated RET, the storage and pump-storage application should be taken into account in the institutional frameworks. With the conceptual background based on the literature of co-evolution between institutions and technologies and the coherence framework, the technical and institutional feasibility of the implementation of storage and pump-storage SHP has been evaluated in the case of Switzerland. The technical potential was evaluated with an explorative approach. Using qualitative research methods, institutional instruments were identified which allow the economically viable deployment of storage and pump-storage SHP. The implementation of such instruments leads to policy recommendations. Finally, the analysis on this concrete example gives an illustration of the coherence framework and contributed to further develop it.