A pumped storage hydropower (PSH) valuation framework has been developed by the U.S. Department of Energy (DOE) as part of its the HydroWIRES Initiative to enable and improve the contributions of this technology to the power grid.

The framework was designed to allow for an economic valuation of PSH projects by considering all costs and benefits of a project, regardless of who is incurring the costs or is receiving the benefits. The guidebook helps measure both monetized and non-monetized value streams, allowing developers planning a new project to examine the effects of market rules and mechanisms, and the likelihood of recouping investment.

Some of the metrics addressed include value of bulk power capacity and energy arbitrage, value of PSH ancillary services, power system dynamic performance stability benefits, PSH impacts on reducing system cycling and ramping costs, PSH transmission benefits and PSH non-energy benefits such as economic development and job creation.

Key steps in the PSH valuation process. Source: DOEKey steps in the PSH valuation process. Source: DOE

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