From the political viewpoint, one thing to keep in mind is that the entire global Green Party movement was germinated in Tasmania in reaction to a pumped storage hydraulic system.
http://en.wikipedia.org/wiki/Tasmanian_Greens

The problem with them is that while they look like lakes (at least when full), the water level goes up and down dramatically, so they don't work like lakes from the viewpoint of Mother Nature.

Not to say that they can't be done, but there is a potential political issue...