U.S. DOE releases Pumped Storage Hydropower Valuation Guidebook


The U.S. Department of Energy’s (DOE’s) Water Power Technologies Office (WPTO) funded development of the newly released Pumped Storage Hydropower Valuation Guidebook to advance the state-of-the-art in assessing the value of pumped storage hydropower (PSH) plants and their contributions to the power system.

PSH is a valuable energy storage resource that provides many services and benefits for the operation of power systems, but determining the value of PSH plants and their various services and contributions has been a challenge. WPTO’s specific objective was to develop a 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.

The specific goals of this project were to:

Develop comprehensive and transparent valuation guidance that will support consistent valuation assessments and comparisons of PSH projects or project design alternatives,

Test the PSH valuation guidance and its underlying methodology by applying it to two selected PSH projects

Transfer and disseminate the PSH valuation guidance to the hydropower industry, PSH developers and other stakeholders

The guidebook is broken into six sections:

1. Introduction

2. General Overview of Valuation and Decision Analysis Methods and Approaches: provides a general overview of methods and approaches typically used in valuation analyses of various grid technologies

3. Valuation Guidance for Pumped Storage Hydropower: provides an overview of the proposed PSH valuation framework and describes in detail the 15-step valuation process

4. Methodological Approaches for Valuation of PSH Services: provides extensive technical detail on various methods and approaches that can be used to assess, quantify, and estimate the value of different PSH services and contributions to the grid

5. Integration of Results for Valuation of PSH Services: discusses how to integrate the results of valuation assessments for various PSH services in a comprehensive and consistent manner and develop the resulting value streams for use in the cost-benefit analysis

6. Summary and Conclusions

In addition, in a companion project, WPTO is funding the development of an online PSH Valuation Tool, with the objective to help guidebook users navigate through the PSH valuation process.