Grid Reliability, Resilience, & Integration (HydroWIRES)

Project Name: Valuation Guidance and Techno-Economic Studies for Pumped Storage Hydropower

Project Team: Argonne National Laboratory (guidebook lead), Pacific Northwest National Laboratory (tool lead), Idaho National Laboratory, National Renewable Energy Laboratory, and Oak Ridge National Laboratory

Lead Recipients’ Locations: Lemont, Illinois, and Richland, Washington

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To help solve challenges related to calculating the value of pumped storage hydropower (PSH) plants and their many services, a team of U.S. national laboratories developed detailed, step-by-step valuation guidance that PSH developers, plant owners or operators, and other stakeholders can use to assess the value of existing or potential new PSH plants and their services. A team led by Argonne National Laboratory developed the PSH Valuation Guidebook, and a Pacific Northwest National Laboratory-led team created an online tool to help guidebook users navigate the valuation process.

The project team aimed to develop comprehensive and transparent guidance to support consistent valuation assessments and comparisons of PSH projects or design alternatives. To achieve this goal, the team developed a cost-benefit and decision analysis valuation framework structured as a 15-step process.

Chart divided into four sections with a list of the 15 steps described in the Pumped Storage Valuation Guidebook

The Pumped Storage Valuation Guidebook outlines step-by-step valuation guidance that developers, plant owners or operators, and other stakeholders can use to assess the value of existing or potential new pumped storage hydropower plants and their services. Graphic courtesy of Argonne National Laboratory

The steps are grouped into four main activities highlighting the key stages of the valuation process: defining the scope of the analysis, developing valuation criteria, designing the analysis, and determining and evaluating the results. The valuation framework is designed to account for all PSH project costs and benefits, helping to determine the economic value of the project for the owner, system, and/or society as a whole. In addition, the framework allows for cost-benefit analyses to be performed from specific perspectives of different stakeholders, such as regulators and policymakers.

The PSH Valuation Guidebook was disseminated among industry stakeholders to build understanding of the true potential of this vital clean energy storage technology. The companion PSH Valuation Tool was demonstrated during the National Hydropower Association’s Clean Currents conference in October 2021 and released in November 2021.

With the PSH Valuation Guidebook and Tool, key decision makers will have the resources necessary to properly evaluate new PSH or upgrade projects, leading to additional plants coming online to help decarbonize the power sector. 

Grid Reliability, Resilience, & Integration (HydroWIRES)