NATIONAL HYDROPOWER ASSOCIATION 1

EXECUTIVE SUMMARY

Duke Energy’s Jocassee Pumped Storage

Hydropower Facility in South Carolina

Executive Summary
PREFACE
T his White Paper was prepared by theis the third
An essential attribute of our nation’s electric power
This Pumped Storage Report prepared
system is grid reliability - ensuring that electric supply
National Hydropower Association’s
by the National Hydropower
securely matches electric Association’s Pumped
demand and in real-time. The
A primary goal of
Pumped Storage Development primary
Storage Development
challenge in
Council
ensuring reliability is that electric
supply has no shelf life - it(Council).
must be generated Thewhen
this paper
Council. Theisprimary
to author is Michael
first report was
neededprepared in 2012
- and electricity demandandcontinually
the second changes,
Manwaring
offer (Council
the reader a Chair, Stantec)in 2018. This report focuses on energy markets,
as do the system conditions impacting secure delivery
of that generation. Electric transmission grid operators
with significant
pumped storageinput provided by Kelly
energy storage havepolicy,
long met development opportunities
the challenge of aligning energy supply and
Rodgers (Council Co-Vice Chair, Sanand challenges, technological advancements,in and
demand and responding to steep increases demand on
hydropower (PSH) a real-time basis with a limited number of long-life, proven
Diego County Water Authority), Scott
the Council’s recommendations
generation to unlock
technologies - specifically the and
hydropower
handbook of historic
Flake (Independent Pumped Storage gas-fired combustion turbines - that have the ability to
full value ofstart
thisuplong duration
quickly and/or vary renewable
their electricstorage
output as the
Consultant), Don
development andErpenbeck (Stantec), demand changes. Large reservoir hydropower, thermal
resource. We have designed the 2021 report so that
Rick Miller (HDR), as
current projects, new well NHA staff (generally coal and gas) and nuclear resources have
it can be easily updated
commonly servedinasresponse to an evolving
baseload resources, providing the
and numerous industry participants. stabilizing backbone to grid reliability. As greater amounts
project opportunities grid and changing storage needs. The report can
of renewable energy resources are integrated into the
and challenges, as be easily referenced forand
energy supply, advocating
recent energyand educating
policy decisions and
regulation have impacted coal and nuclear resources,
at the federal, state and local levels and ultimately
well as technological pumped storage and other energy storage technologies
— be the go-to resource
will continue for new
to emerge pumped
as critical storage
resources to provide
advancement and flexible solutions to meet grid reliability challenges.
development. A new addition in this report is the
resource capabilities. “frequently asked questions” section.

2 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

2 2021 PUMPED STORAGE REPORT
 EXECUTIVE
SUMMARY

A
s the United States grid continues its rapid evolution to meet ambitious
clean energy goals, the electric industry must manage this change while
maintaining reliability, keeping energy costs competitive and ensuring
that capital is directed toward technologies that can meet all these
goals. The EIA projects the share of electricity from renewables will
grow from 21% in 2020 to 42% in 2050.1 These percentages are much
greater in states with aggressive Renewable Portfolio Standards (RPS),
Clean Energy Standards (CES) or greenhouse gas (GHG) reduction
targets. Many states are now adopting CES goals targeting 100% carbon
free emissions by mid-century. These goals are not limited to state
policies. In some areas, utilities are investing in cleaner assets based on
ESG (Environmental, Social and Governance) issues. Likewise, utility
customers and investors are supporting clean energy through choice
of suppliers, deciding where to locate businesses and purchasing green
energy directly through power purchase agreements. In some ways,
customer and investor driven ESG priorities are incenting change faster
than regulation.

The challenge will be for utility planners, industry stakeholders, regional

market operators, and regulators to put into place policies that ensure
the grid maintains reliability during this rapid development. Planning
models demonstrate that adding more wind and solar requires greater
amounts of storage and operational flexibility to assure grid resilience.
The combination of increasing variable renewable resources and the
retirement of fossil fueled dispatchable capacity makes hydropower and
pumped storage the unique proven technology that can provide clean
energy, flexibility and storage.
 With reliability, resilience and the push for a low carbon future being
Raccoon Mountain Pumped Storage
facility, located in Marion County, is the major focus for today’s grid operators, future energy scenarios
owned and operated by the Tennessee with increasing variable renewable resources and decreasing base load
Valley Authority. options creates challenges and a need for dependable solutions. The

1U.S. Energy Information Administration, Annual Energy Outlook 2021 (AEO 2021)

EXECUTIVE SUMMARY 3
 above-mentioned models are forecasting the need
for flexibility, fast ramping, capacity, and both short 40
and long duration energy storage. PSH’s existing

New PSH Capacity (GW)

installed base of 22 gigawatts (GW) has been providing
30
these grid services for decades. New PSH projects
in development in the U.S. are well-positioned to
utilize advanced technologies resulting in even greater 20
benefits to the grid. As the U.S. energy mix continues
to evolve and more variable renewable resources are
brought online, now is the time to develop new long- 10
duration energy storage resources to enable a reliable,
clean energy grid. In fact, as demonstrated in DOE’s
Hydropower Vision Report2, there is potential for 0
50 GWs of new pumped storage in the United States 2010 2020 2030 2040 2050
by 2050.
No New Development
Business-as-Usual
The Nation’s Largest Advanced Technology
Energy Storage Resource Low Cost Finance
Advanced Techology, Low Cost Finance,
Globally, PSH provides 160 GW of the approximately
Combined Environmental Considerations
167 GWs of energy storage in operation. In the U.S.,
PSH provides 94% of bulk energy storage capacity and
Figure 1. 2016 DOE Hydrovision report, ReEDS modeled
batteries and other technologies make-up the remaining deployment of new pumped storage capacity
6%3. The increasing demand for electricity storage from
renewables and the electrification of the transportation
sector is likely to grow the total amount of electricity
storage capacity by five times the current capacity and
as much as ten times by 20504. Supporting the Case for PSH
in a Low Carbon Future
The 2016 DOE Hydropower Vision Report estimates
a potential addition of 16.2 GW of pumped storage PSH was initially designed to integrate nuclear and
hydro by 2030 and another 35.5 GW by 2050, for a total large thermal base load generation by providing
installed base of 57.1 GW of domestic pumped storage flexible firming services to allow the generation plants
(see Figure 1). In some markets, owners of existing to operate more efficiently. When a nuclear plant was
PSH facilities are experiencing greater utilization of added to the grid, a PSH unit was commonly built to act
these flexible assets, especially in areas with increased as a shock absorber for balancing supply and demand.
variable renewable energy resources. Asset owners are When energy demand varied, the PSH units would
experiencing increased pumping during the day, more either pump (low demand) or generate (high demand),
starts and stops, increased ramping for evening load as these large generating unit’s abilities to cycle up or
and condensing operations. down were limited. The pairing of these technologies
provided vertically integrated utilities and their
customers low-cost affordable energy. With the decline
of the historical thermal power fleet, PSH’s new job

2DOE Water Power Technologies Office, Hydropower Vision Report, October 21, 2016.
3U.S.Energy Information Administration, Battery Storage in the United States: An update on market trends, July 2020
4Storage Futures Study (SFS), Economic Potential of Diurnal Storage in the U.S. Power Sector, NREL

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 of renewable energy and provide grid resiliency
With the decline of the historical thermal throughout the day. In California, PSH was identified
as the preferred source of long duration energy storage.
power fleet, PSH’s new job description
The 2019–2020 IRP currently shows a need for 0.9 GW
will be to integrate solar and wind. of PSH starting in 2026 for California to meet the 2030
GHG reduction goals.

description will be to integrate solar and wind to help Current Challenges to PSH Development
maintain a low carbon reliable grid. In some areas of the
As of the publication of this report, three new PSH
country this is already occurring. Existing PSH units are
projects totaling 1.8 GWs have received all permitting
not only pumping at night but also throughout the day
to match energy demand when there is excess solar on authorizations including a Federal Energy Regulatory
the grid. As load demand grows in the late afternoon, Commission (FERC) license but have yet to commence
PSH plants (or water batteries) can return the excess construction. In addition, FERC reports that over
solar energy to the grid when it is needed most. 50 GWs of pump storage development have been issued
a preliminary permit or are in the process to receive
As state clean energy goals ramp up to reduce climate a permit. Unfortunately, current market and energy
impacts, many gas turbines will likely retire. These policies do not fully value the critical services that PSH
gas turbines have been providing flexible capacity and can provide to the grid. Many challenges faced by PSH
ramping services. The retirement of these units will developers include the following:
make it more challenging for grid operators to maintain
reliability with a more variable energy mix. PSH is • Tax policy – Current Federal tax policy provides
poised to play an even greater role in this future grid that some energy storage technologies receive a 30%
scenario, especially with its highly flexible capability investment tax credit (ITC) while pumped storage
to provide long duration storage and rapid response to does not. This can make a substantial difference
changing energy demands. within a competitive utility procurement setting.

In California’s most recent Integrated Resource • State Procurement policy – Most states that have
Plan developed by the California Public Utilities RPS (renewable portfolio standard) mandates
Commission (CPUC), there is a recognition of the or energy storage procurement targets either
different attributes between 4-hour battery energy implicitly or explicitly exclude pumped storage.
storage and the need for longer duration energy storage, Even “technology neutral” policies can include short
typically 8 hours or more5. The state has several large development timelines or contracting structures that
PSH plants in operation that can supply long duration exclude PSH and favor other storage technologies.
energy storage. During times of stress, these plants are
relied on to help stabilize the grid. As GHG emissions • Market policy – Many of the grid services that
are reduced to meet low carbon emissions targets in PSH provides are either undercompensated or not
2030, significant amounts of 4-hour energy storage will compensated at all. Compensation mechanisms
be used to help flatten the gross peak demand and net for frequency response, inertia, flexible ramping,
peak demand (load minus solar and wind generation). condensing, voltage control and blackstart are
As GHG emissions are further reduced and natural undervalued. Additionally, PSH can provide broader
gas plants are retired, long duration energy storage system benefits that are hard to quantify and measure
provided by PSH is needed to extend the delivery leading to subpar compensation.

5CPUC 2019-2020 Electric Resource Portfolios to Inform Integrated Resource Plans and Transmission Planning

EXECUTIVE SUMMARY 5
 • Utility Procurement policy – Most utilities do not • State Procurement policy – States need to send
accurately model the full benefits of PSH including a market signal that long duration storage will be
the full range of services provided by advanced needed to meet aggressive climate goals. Legislatures
turbine technologies. Additionally, when comparing should adopt robust long duration storage targets
PSH to other alternatives utility planners often fail to with long lead times to ensure that the demand
account for the long-life span differences. is met and that all technologies have a chance to
compete.
• Federal permitting policy – Although recent
changes created a two-year expedited licensing • Market policy – All grid services need to be fully
process for closed-loop or “off-river” pumped valued. Many of the grid services that PSH provides
storage, the implementation of this process has made are either undercompensated or not compensated
it difficult for projects to qualify. As of the date of at all. In regional markets, FERC should ensure
this publication, no PSH project has successfully there are sufficient compensation mechanisms
navigated the expedited process. for frequency response, inertia, flexible ramping,
condensing, voltage control and blackstart and
other services provided by PSH. In addition,
NHA Recommendations to Address some renumeration should be provided to those
PSH Development Challenges technologies like PSH that can provide broader
system benefits that are hard to quantify and
Pumped storage technologies are already providing
measure.
essential value to an evolving grid. For new pumped
storage development to occur, U.S. policymakers • Utility Procurement policy – Utilities should work
need to appropriately value all the services PSH can with the Department of Energy, PSH developers and
provide including long duration storage. NHA supports the national labs to ensure that the full benefits of
competitive and technology neutral mechanisms that PSH, including the full range of services provided
will level the playing field for all storage options. These by advanced turbine technologies, are accurately
include: modeled in IRP settings.
• Tax policy – Several proposals in Congress would • Federal permitting policy – FERC and other
create a stand-alone ITC for all storage technologies stakeholders should work to reform the licensing
including PSH. A technology neutral ITC would process, including allowing projects with minimal
ensure that PSH can compete with other storage environmental impacts to be expedited.
resources on a level economic playing field.

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 Pumped Storage Hydropower:
1.0
Proven Technology for an Evolving Grid

P
umped storage hydropower (PSH) has played an important role in
America’s reliable electricity landscape. The first PSH plant in the U.S.
was constructed nearly 100 years ago. Like many traditional hydropower
projects, PSH provides the flexible storage inherent in reservoirs. And
with its pumping mode, PSH brings the added benefit of absorbing
off-peak and excess electric generation and is an important asset in
integrating renewable energy resources.

PSH is a proven technology—cost effective, efficient, and operationally

flexible. There are 43 active PSH projects in the U.S.1 providing 22,878
megawatts (MW) of storage capacity2. Individual unit capacities at these
projects range from 4.2 to 462 MW. Globally, there are approximately
270 pumped storage plants, representing a combined generating
capacity of 161,000 MW3. This grid-scale storage technology is used
extensively to both store and redistribute electricity from periods of
excess supply to periods of peak demand, and to provide grid reliability
services with its generation and pumping modes.

Today, in the U.S. there are 67 new PSH projects across 21 states
representing over 50 GWs of new long duration storage (see Figure 2).
Many of these projects are located in the west and are off-river or
closed loop meaning they have fewer environmental impacts. Existing
and proposed PSH projects are poised as a perfect complement to the
significant amounts of wind and solar energy being ushered to the grid
to reduce greenhouse gas emissions and combat climate change.

 1.1 PUMPED STORAGE HYDROPOWER:

Consumers Energy’s A HISTORICAL OVERVIEW
Ludington Pumped Storage
facility located in Pumped storage hydropower projects use electricity to store potential
Ludington, Michigan energy by moving water between an upper and lower reservoir. Using

PUMPED STORAGE HYDROPOWER: PROVEN TECHNOLOGY FOR AN EVOLVING GRID 7

 Figure 2. There are 67 new PSH projects across 21 states representing over 50 GWs of new long duration storage.

electricity from the grid to pump water from a lower administrations conceived, designed, permitted, and
elevation, PSH creates potential energy in the form of constructed PSH plants to make more efficient use of
water stored at an upper elevation, which is why it is large steam-powered generating plants. These large
often referred to as a “water battery”. thermal plants operate most efficiently when run
continuously. PSH was an ideal technology to absorb
During periods of high electricity demand, the stored electricity being generated at night when demand for
water is released back through the turbines to generate electricity was low and return electricity to the grid
electricity like a conventional hydropower station. during the daytime peak hours. A large PSH plant
Current pumped storage round-trip or cycle energy can store energy to support 8-16 hours of full load
efficiencies often exceed 80% and do not degrade over operation, and a week or longer at the largest plants.
the lifetime of the equipment, comparing very favorably
to other energy storage technologies. With these PSH plants in place, grid operators
recognized the value of PSH to not only pair with large
Beginning in 1929 and for 60 years thereafter, vertically load thermal in a 24-hour cycle, but to meet increased
integrated utility companies and the federal power

8 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

 A large PSH plant can store energy
transmission system demands for reliability and
to support 8–16 hours of full load
system reserves. PSH resources effectively shift, store,
and reuse energy generated until there is demand. operation, and a week or longer
This shifting, when performed at grid-scale, can avoid at the largest plants.
transmission congestion, reduce energy curtailment,
lower GHG emissions, provide quick access to
significant and sustained energy ramping, and support
uninterrupted electricity supply.
need for fast responding system reserves to maintain
a stable grid and limit the potential for rolling
1.2 PUMPED STORAGE HYDROPOWER: backouts. PSH is an excellent grid balancing tool for
PERFECT COMPLEMENT TO GRID- wind and solar resources that generate intermittently
SCALE RENEWABLES and often at times of low electricity demand without
increasing GHG emissions. With its ability to quickly
Beginning in the 1990s, wind and solar generation and simultaneously give and take electricity, PSH can
have increased significantly in the U.S.4 This trend is maximize wind and solar emission-free electricity
projected to continue with wind and solar generation by allowing this clean energy to be stored for later
supplying nine percent of U.S. electric generation in use. As far back as 2012, PSH operators in regional
2018, and increasing to 63 percent by 2050.5 These markets with large penetrations of solar resources
variable generation facilities are weather dependent have experienced a shift from traditional nighttime
and storage is required to optimize their use while pumping to daytime pumping. For example, at PG&E’s
maintaining reliability and preventing increased Helms PSH, a dramatic shift from nighttime to
GHG emissions from using thermal resources as their daytime pumping occurred from 2012 to 2017
back-up power resource. The unscheduled nature of (Figure 3).
many renewable energy technologies has increased the

800 18000
700 16000
600 14000
12000
500
10000
400
8000
300
6000
200 4000
100 2000
0 0
2012 2013 2014 2015 2016 2017
Pumping GW Hours 1:00 AM–7:00 AM Pumping GW Hours 9:00 AM–5:00 PM

Solar and Wind Installed Capacity (MW)

Figure 3. Helms PSH ratio of pumping nighttime and daytime hours with solar and wind overlay.
Source: PG&E, as filed with DOE April 2018 and California Energy Commission.

PUMPED STORAGE HYDROPOWER: PROVEN TECHNOLOGY FOR AN EVOLVING GRID 9

 As wind and solar increases in other regions, the same PSH response aids in alleviating frequency and voltage
shift in nighttime-daytime pumping has occurred. For fluctuations, and bolsters grid stability.
example, Duke Power’s Jocassee and Bad Creek PSH
saw a steady shift from nighttime to daytime pumping Since deregulation of the electric industry began in
over the period 2015 to 2020 (Figure 4). the early 1990s, there are few effective regulatory
mechanisms or market price incentives for energy
Recent technological advances in PSH adjustable storage or for integration of wind and solar power.
speed pump-turbines allow an even greater range of Yet, these are components of a clean, reliable energy
fast ramping and frequency regulation services in generation and transmission system that require
both the generation and pumping modes. Variable coordinated, long-term planning. In addition, in
speed PSH can respond across a scale of nearly infinite certain market regions (e.g., California and the Pacific
increments to replace dropped or reduced generation Northwest), large amounts of variable renewable
and absorb electricity suddenly being produced by energy generation are creating new challenges for
wind and solar. A modern variable speed PSH plant can regional transmission systems and grid operators.6
reduce curtailment of solar energy while at the same PSH’s grid-scale energy storage can address some of
time providing grid reliability services. This adjustable these challenges and maximize the value of existing and
future clean, renewable generation projects.

0.35 3500

0.30 3000

0.25 2500

0.20 2000

0.15 1500

0.10 1000

0.05 500

0.00 0
2015 2016 2017 2018 2019 2020
Ratio of MW hours used for pumping Duke Energy Solar Installed Capacity (MW)
1100-1300 hours compared to hours 0100-0300 hours

Figure 4. Jocassee and Bad Creek PSH ratio of pumping GWH daytime and nighttime.

6Aclosed-loop pumped storage project is generally defined as a pumped storage project that utilizes reservoirs situated at locations other than natural waterways, lakes,
wetlands, and other natural surface water features, and may rely on temporary withdrawals from surface waters or groundwater for the sole purpose of initial fill or the
periodic recharge needed for project operation. “Federal Energy Regulatory Commission Office of Energy Projects Division of Hydropower Licensing. “Guidance for
Applicants Seeking Licenses or Preliminary Permits for Closed-Loop Pumped Storage Projects at Abandoned Mine Sites”. October 2019.

10 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

 Current Challenges to PSH Development
2.0
N
ew PSH development is challenged from the start by regulatory
complexity and delays, electricity market structures that undervalue or
ignore PSH’s contributions to the grid, and lack of avenues for project
financing—especially compared to other renewable energy and energy
storage resources.

2.1 CURRENT REGULATORY TREATMENT OF PSH

All non-federal PSH must follow FERC’s hydropower licensing
process under the Federal Power Act. The FERC process ensures the
best use of our nation’s water resources and balances development
with environmental protection. As electricity providers and project
developers attempt to license new PSH projects, they face significant
procedural impediments, beyond what is reasonable to assure beneficial
uses and environmental protections. The time necessary to obtain
approval and the uncertainty associated with the timeline discourages
development of valuable PSH resources.

Permitting and construction timelines for new PSH projects from

inception to generation is typically seven to ten years. Few investors
are willing to finance such long-lead projects, especially since market
structures, and a lack of procurement policies at State PUCs, provides
an additional layer of uncertainty. Even regulated utilities can face
challenges with requirements for return on investment imposed by state
utility commissions.

NHA and the hydropower industry are working to modernize the

 licensing process for PSH projects that can demonstrate minimal
adverse environmental effects, especially closed-loop technology6.
Exelon’s Muddy Run Pumped Storage
facility along the Susquehanna River
Reform is needed on the legislative and regulatory front to unlock PSH’s
in Maryland and Pennsylvania. renewable energy and grid-stabilizing powers.

CURRENT CHALLENGES TO PSH DEVELOPMENT 11

 2.2 E XISTING MARKET RULES UNDER
VALUE OF ENERGY STORAGE AND The industry-wide adoption of a
ANCILLARY SERVICES rigorously studied, tested, and refined
PSH projects provide value by storing and time- step-by-step methodology will become
shifting energy delivery based on demand and through key to demonstrate the full suite of PSH
ancillary services. While some key services provided
benefits by appropriately valuing their
by PSH have market recognition, there are other
services that both traditional (existing) and advanced- advantages over other energy storage
technology PSH projects are capable of providing that technologies.
are currently either undervalued or not valued at all.
Such contributions include the following: bulk power
capacity and energy storage over the PSH lifetime, value
of ancillary services, system stability services, impacts
on reduced cycling/ramping costs, transmission 2.3 C
 HALLENGES WITH FINANCING
benefits, as well as non-energy related services (water NEW PSH PROJECTS
management, socioeconomic and environmental Pumped storage investors are willing to take a long-
impacts). The exclusion of such benefits may unfairly term view of large-scale projects that require increased
lower perceived value of PSH as it relates to other certainty of market revenues associated with that
energy storage systems. long-term view. Few financial institutions are willing
In 2021, the DOE Water Power Technologies Office to finance these types of long-lead projects through
(WPTO) and a group of DOE national laboratories the licensing timeframe, especially since the market
(led by Argonne National Lab) released the Pumped structure discussed in this paper provides an additional
Storage Hydropower Valuation Guidebook – A Cost- layer of uncertainty. This leads to substantial capital
Benefit and Decision Analysis Valuation Framework7. required for developers to commit in the early stage of
The guidebook is a standardized step-by-step the project. In addition, energy policies that favor other
methodology for the valuation of all grid services and technologies can make it difficult for PSH to compete
contributions provided by PSH plants (including all within certain RFP settings.
those mentioned above), for use by electric utilities, While the lengthy permitting process can be a large
PSH developers, plant owners and operators, regulatory hurdle for project developers, that process is not
bodies, and other stakeholders. the only barrier to development. As of the date of
The industry-wide adoption of a rigorously studied, this report, three PSH facilities have received their
tested, and refined step-by-step methodology will FERC authorizations yet all three have been unable
become key to demonstrate the full suite of PSH to secure power purchase agreements with utilities.
benefits by appropriately valuing their advantages over While these facilities have made progress in seeking
other energy storage technologies. long term contracts, there remains policy hurdles that
make financing PSH more difficult than other storage
technologies.

7 “Developing Valuation Guidance for Pumped Storage Projects”, Vladimir Koritarov, Presented April 17, 2019, at EPRI hydropower Flexibility Workshop

12 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

2.4 O
 BSTACLES TO PSH DEVELOPMENT —
INDUSTRY SURVEY Table 1. Ranking
 of seven challenges to
PSH development
In 2020, NHA conducted an informal survey of PSH
developers to rank the following seven challenges to
PSH development, with #1 being the most challenging/ CHALLENGE RANK*
most in need of assistance and #7 being the least
challenging/least in need of assistance. Based on the Licensing Process 3.11
information received each identified ‘challenge’ is listed Requirements for
in Table 1. obtaining the license

From the survey results, it is clear that developers view
Competing Technology 3.11
the licensing process and being able to demonstrate
Demonstrating the value of
the value of PSH compared to other energy storage
PSH compared to other
technologies as the most difficult challenges.
ES Technologies
Environmental perception and project financing issues

consistently were not amongst the most challenging,
Development timelines 3.44
which indicates an increase in public understanding of
How long it takes
PSH benefits and a confidence from the development
to come online
community that once power purchase agreements are

reached their project will be funded for construction. A
Costs 3.61
key takeaway from the survey is that embarking on the
Comparison to other energy
development journey to provide this critical low-carbon
storage technologies
resources is a risk, and without some policy or market
(total & $$/kW)
modifications there may not be adequate long-duration

energy storage capacity to meet the demand from wind
Policy 4.38
and solar resources.
State or Federal policies
preferring other technologies
over PSH

Environmental 4.61
Perception of impacts
compared to other ES
technologies

Project Finance 5.72
From PPAs to internal
business case to access
to long-term capital

*The lower the value, the larger the perceived

development risk.

CURRENT CHALLENGES TO PSH DEVELOPMENT 13

Rocky Mountain Pumped Storage
Hydropower Plant in Georgia

14 2021 PUMPED STORAGE REPORT

 Supporting the Case for Pumped Storage
3.0
B
ecause of the many environmental and grid reliability benefits advanced
PSH offers, the hydropower industry is embarking on a re-investment
in the existing PSH fleet and developers are investigating dozens of
new project opportunities. In fact, over the past decade, the PSH fleet
has added roughly the same amount of capacity as all of the lithium-
ion batteries combined. In some regions, the market products and
procurement policies that will support upgrades to existing projects,
or investment in new, advanced technologies, need to be developed
to justify additional major capital expenditures, especially as we drive
toward a low carbon electric grid. We believe the future for PSH is one
of sustained and potentially significant growth if the proper policies are
in place.

3.1 V
 ALUING ENERGY STORAGE —
A COMPLEX UNDERTAKING
When discussing the value of energy storage, the conversation typically
revolves around the project cost and the monetized benefits the project
provides. While project costs can be ‘fairly’ straightforward, the benefits
of energy storage have proven very challenging to quantify. A primary
challenge to the ‘value’ picture is that energy storage technologies offer
multiple services, and therefore should be eligible for multiple value
streams. Most market designs are based in energy sales and do not
fully recognize the value of capacity-based services like inertia, voltage
support, etc. Energy based market designs pose a challenge to attract
the necessary investment to develop large capital energy storage projects
 like PSH by not providing value to a significant portion of PSH services
Bear Swamp Pumped Storage that are critical for grid resiliency.
Hydropower facility in northern
Massachusetts is jointly owned by To best represent the value of an energy storage project, most developers
Brookfield Power and Emera Energy. try to stack, or combine, various revenue streams to more accurately

SUPPORTING THE CASE FOR PUMPED STORAGE 15

 represent the benefits offered to support a reliable to those in regional energy markets. PSH in vertically
electric grid. To further this ‘valuing’ challenge for integrated utility systems is dispatched based on
energy storage technologies, some grid service benefits standard economic drivers but is also committed based
are not currently recognized (monetarily) in all on benefits that are harder to calculate. For example,
RTOs/ISOs (regional transmission organizations and pumped storage in vertically integrated utility systems
independent system operators), and other services will run because their system operators can account
(i.e., grid security benefits) are not valued at all. The for value from ancillary services and other system
primary reason for this is that investor-owned utilities wide benefits — such as avoided start/stops or limiting
have been providing these services for ‘free’ (without operation of off-design conditions for other units on
adequate compensation) from their existing PSH fleet, the system. Current market rules and structures do
only recognizing income from the generation sold. not properly value and/or consider these system wide
This has been tolerated since new large-scale PSH has benefits. Studies have been completed comparing
not been built in the U.S. for over 25 years. As private the differences in dispatch for PSH in markets and
investors are considering building new PSH, the lack traditional regulatory structures that support the
of valuation for these services needs to be modified to conclusion that markets do not completely value
a broadly accepted financial model that recognizes the PSH. One recent study that further demonstrates this
true services provided conclusion was completed by EPRI titled, “Pumped
Storage Hydro Operations and Benefits in the United
For example, an April 2017 energy storage policy guide States: Review and Case Studies.”
prepared by the Interstate Renewable Energy Council
(IREC) stated that ancillary services such as frequency
regulation and ramping, are valued not for the electrical 3.1.1 PSH as Generation and Transmission
output (generation) but for their capability to inject
While the previous sections of this paper focused
or withdraw electricity over short intervals, which
on generation sources and how PSH fits into energy
provide major grid benefits8. Similarly, spinning reserve
markets, energy storage technologies have the ability to
capabilities are not valued for their electrical outputs
provide components of transmission assets along with
but for the ability to provide “stand-by” deliveries
their ability to supply ancillary services and alleviate
when called upon. PSH can simultaneously provide
congestion by absorbing excess generation. Market
these services, but are generally not compensated for
rules generally prohibit transmission assets from
providing multiple critical services at once — which
participating in wholesale energy and ancillary service
adversely impacts a project’s capability to show a true
markets to maintain the independence of grid operators
rate of return and persuade investors to fund a project.
and avoid the potential for market manipulation,
Some of the primary value stacks for energy storage
whether real or perceived. Furthermore, FERC requires
projects like PSH include, but are not limited to:
market power studies to be performed when third
• Providing Power at Peak Demand Periods parties provide ancillary services at market-based rates
• Ancillary Services to transmission providers (i.e., commonly known as
• Energy Time Shifting the Avista Restriction). In addition, the policy prohibits
sales of ancillary services by a third-party supplier to
• Grid Reliability and Resiliency a public utility that is purchasing ancillary services to
• Grid Infrastructure Congestion Relief satisfy its own obligations to customers under its open
• Carbon-Free Flexible Resources access transmission tariff.
• Ability to Reduce Renewable Curtailments To better address when an energy storage facility can
both access energy markets and receive rate based
One way to see that pumped storage is not recognized
treatment for certain services, FERC issued a policy
for all of its value is to compare the operations of
statement on their view of multi-use facilities entitled
these facilities in vertically integrated utility systems

8 https://irecusa.org/resources/key-takeaways-for-policymakers-and-regulators/

16 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

Utilization of Electric Storage Resources for Multiple transmission planning could enable a developer seeking
Services When Receiving Cost-Based Rate Recovery, to sell a variety of storage-only services to be deemed
issued January 19, 2017. This updated policy statement eligible for long-term incentive rate recovery, similar to
allows for the treatment of both market-based returns transmission assets.
and rate based treatment of certain attributes of energy
storage provisions under certain circumstances.
Regardless, NHA acknowledges all PSH should be 3.2 E
 NERGY STORAGE TECHNOLOGY
treated equally in markets, whether new or existing. COST COMPARISON

FERC Order 1000 introduced robust regional planning When evaluating energy storage systems, the dollar
into the transmission process. It also mandated per kilowatt hour ($/kWh) is a helpful illustration of
coordination among neighboring transmission the competitiveness of each storage technology. This
planning regions within their interconnection. Because metric considers the cost of the technology, lifetime and
Order 1000 establishes requirements for reforming amount of energy storage. As Figure 5 shows, pumped
transmission cost allocation processes, it creates an storage hydropower has a much lower $/kWh than
opening for energy storage to be included in the lithium-ion batteries, and is nearly 2 to 3 times less
transmission planning process. If, as a result of the expensive. Also, pumped storage hydropower’s annual
transmission planning process, a project is accepted operations and maintenance, $20/kWh-yr costs are also
into a regional plan, or incorporated as a resource three times lower than batteries9.
supporting the regional plan, it would appear to meet Development of modern PSH project costs can
the threshold requirements of Section 219 of the vary based on site-specific conditions such as the
Federal Power Act, making it eligible for incentive availability of existing civil and generation/transmission
rate treatment. In addition, having storage included in

CAPEX — Full EPC costs

400 Max

350 P80

300 x x Average
Median

P20
250 Min

x
200
x
150

100
x x
50

0
Energy-$/kWh
PHS-Fixed speed PHS Variable speed Batteries 2020
Batteries 2025 Batteries 2030

Figure 5. Global utility scale storage capacity by technology (2018).

Source: GE Re Marketing, BNEF 2020 (4-hour duration Li-ion batteries)

9 DOE Energy Storage Technology and Cost Characterization Report, July 2019

SUPPORTING THE CASE FOR PUMPED STORAGE 17

 energy storage costs is misrepresented. NHA requests
FERC or the U.S. Department of Energy (DOE) to
PSH is a proven, reliable technology that support the development of technology-neutral,
currently represents more than 97% of all economic and performance models that would allow
energy storage solutions globally. equal comparison of all energy storage technologies
over appropriate asset life cycles.

3.3 N
 EW TECHNOLOGY ADVANCEMENTS
AFFECTING PSH PROJECTS

infrastructure, land, and water, as well as project PSH is a proven, reliable technology that currently
size, environmental regulations, site geology, water represents more than 95% of all energy storage
availability, and overall construction cost. A feasible solutions globally. Pumped storage technology
project site would include an approximate cost estimate advancements include: improved efficiencies with
ranging from $1,700/kilowatt (kW) to $2,500/kW, based modern reversible pump-turbines, adjustable-speed
on an estimated 1,000 MW sized project. A smaller pumped turbines, advanced equipment controls
project typically does not have the same economies of such as static frequency converters and generator
scale and could result in higher unit costs (in $/kW) insulation systems, as well as innovative underground
than a large project, but the overall project costs would construction methods and design capabilities. The
be much less. These costs are representative for all PSH benefit of these advances is faster response time
project aspects except land acquisition, transmission which enables load following to integrate intermittent
interconnection charges, and some owner’s costs, which renewables more efficiently and cost effectively.
can range from very minor charges to significant, based
on site specific conditions. 3.3.1 A
 dvanced Pump-Turbine
According to a 2016 Electric Power Research Institute Equipment Technology
(EPRI) report, the levelized cost of PSH represent Globally, there are approximately 270 pumped
one of the lowest cost forms of energy storage. What storage plants either operating or under construction,
continues to present a challenge to those seeking to representing a combined generating capacity of over
understand the varying costs for different energy 127,000 MW. Of these total installations, 36 units
storage technologies is the recognized inconsistency consist of adjustable speed machines, 17 of which
between how each energy storage technology (PSH, are currently in operation (totaling 3,569 MW) and
batteries, compressed air, flywheels, etc.), present their 19 of which are under construction (totaling 4,558
costs. Clearly, it is in the interest of long-life assets (i.e. MW). Adjustable-speed pump-turbines have been
PSH) to use levelized cost of energy (LCOE) using used since the early 1990s in Japan and the late 1990s
a 25-plus year asset life cycle because the physical in Europe. In these areas, adjustable speed pumped
assets (major cost components) can depreciate over a storage can reduce significant quantities of oil burned
longer time period, showing a lower LCOE compared in combustion turbines in off-peak hours by shifting
to shorter-life assets (i.e. batteries, flywheels). Battery the responsibility for regulation to pumped storage
technologies in particular would need equipment plants. Another advantage is the increase in overall
replacement over the same period because their unit efficiency as the turbine can be operated at its
physical assets are not expected to last the full life cycle. optimum efficiency level under all head conditions,
A recent energy storage policy guide concluded that resulting in increased energy generated on the order
energy storage costs can be expressed by using two of 3% annually. The current U.S. fleet of operating
metrics: rated power and discharge duration. By only (single-speed) pumped storage plants does not provide
utilizing these two metrics, the true representation of regulation in the pump mode because the pumping

18 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

power is “fixed” — a project must pump in “blocks” of RPS requirements under contract according to the
power. A single pumped storage facility may consist of California Public Utilities Commission (CPUC) as of
multiple units and smaller blocks of power. However, April 11, 2017. The California Independent System
advanced adjustable-speed pumped storage units, while Operator (CAISO) identified a need for fast-ramping,
similar to single speed units in most aspects, are able flexible resources to balance the grid and mitigate the
to modulate input pumping power for each unit and potential impacts of over-generation from renewables.
provide significant quantities of frequency regulation to Recently, CAISO provided an update on renewable
grid operators while pumping or generating much more generation at a California Energy Commission (CEC)
efficiently and cost effectively. workshop on flexible generation and load stating that
there is currently about 10,000 MW of grid-connected
solar. An additional 4,000 MW of solar is expected
3.4 P
 SH AND VARIABLE RENEWABLE to come on line by 2020 with an additional 10,000 to
ENERGY RESOURCES — 15,000 MW by 2030. In addition, there is currently
OPPORTUNITIES FOR COLLABORATION 4,000 MW of behind the meter solar that increased to
The United States’ energy resource mix continues to over 10,000 MW in 2020. As California moves toward
undergo significant change with ongoing retirements higher penetrations of renewable energy and less
of large thermal and nuclear capacity and growth in reliance on traditional fossil generation, energy storage
natural gas and renewable resources. There has been is expected to play an increasingly important role in
a transformation in how the electric grid and power maintaining reliability and power quality.
systems have been operated over the past decade, as the As renewable generation has increased to meet
U.S. has moved from baseload, dispatchable resources aggressive state clean energy laws, the delivery of
to variable renewable energy generation technologies. energy into the grid to meet customer demand has
Hydropower generation, including PSH can facilitate shifted resulting in over-generation of energy from
integration of variable generation resources such as solar resources in the middle of the day. This over-
wind and solar into the national power grid due to its generation causes other generation to minimize output
ability to provide grid flexibility, reserve capacity, and or go off-line to allow for the delivery of renewable
system inertia. Overall, the value of hydropower and energy. This oversupply is especially acute during times
PSH to the integration of variable renewable energy of low customer load and high levels of hydro output
resources will primarily depend on the limits of each during the spring months. In California, this condition
project’s operational flexibility, competition from other is often referred to as the “belly” of the duck curve.
flexible resources, and market constructs that encourage During the afternoon as solar declines and customer
participation. load increases the situation reverses and the plants that
can respond must quickly go from minimum load to
3.4.1 PSH and Solar Resources increasing output. This afternoon ramp is the “neck” of
the Duck Curve. To highlight the impacts of increased
Across the United States, solar generation has increased solar generation on the California electric grid, CAISO
steadily due to favorable tax incentives as well as recorded data from a recent low load, high renewable
declining product and installation costs. California, generation day, as a predictor of potential grid
like many other states, has seen a dramatic increase in management challenges to come. The California electric
solar resources to meet State RPS goals. The current grid reached a minimum load of 5,439 MW (belly of
California RPS standard requires Investor-Owned the “Duck curve”) in May 2019 impacting conventional
Utilities (IOU), Publicly Owned Utilities, Electric generation’s ability to help manage grid reliability.
Service Providers and Community Choice Aggregators Another example of the need for highly flexible
to meet a 33% RPS by 2020. Currently, the three resources occurred, during the late afternoon to early
largest IOU’s in California have over 40% of their evening hours in March 2019, when CAISO recorded

SUPPORTING THE CASE FOR PUMPED STORAGE 19

 a 3-hour evening ramp of almost 15,070 MW. It is renewable energy inputs. In particular, the need for
forecast that the 3-hour evening ramps will continue system reserves at night is increasing to ensure adequate
to increase with increasing renewable resources. It grid stability with higher percentages of variable
is important to note that the current 3-hour evening renewable energy generation, including the demand
ramp is primarily mitigated by California’s thermal for energy absorption capabilities during periods
fleet (natural gas peaker plants), and these resources of high wind generation during low load (demand)
will be available long term as the state aggressively periods. In addition to energy absorption needs, with
drives to lower its GHG emissions. By 2023 the 3-hour the increased amounts of variable renewable energy
evening ramp is expected to exceed 20,000 MW, thereby being supplied at night while load is decreasing,
underscoring the need for more bulk energy storage there is a complimentary need for load following and
systems like PSH to manage the extreme transitions regulation services to accommodate the greater changes
from minimum loads to evening peak loads10. CAISO to net load on the system. Thermal generating units
has proposed a number of solutions to help manage this typically operate at minimum load during low energy
increasing challenge including installing large amounts demand periods such as late night or early morning,
of additional energy storage capacity on the grid. and wind is commonly increasing output during these
periods, creating a greater need for a physical assets
to provide system reserves to manage the resulting
3.4.2 PSH and Wind Resources
energy imbalance. In 2015, wind and solar generation
In many areas of the U.S., wind generation resources represented approximately 15% of total installed
primarily produce during the late evening or early capacity in the Bonneville Power Administration (BPA)
morning, which do not coincide with peak power service territory, and hydropower represented nearly
demand. In other areas, wind resources generate 70%. The level of wind penetration in the BPA system
throughout the day, but are still susceptible to ebbs and requires grid operators to manage seasonal generation
flows of generation based on weather patterns. A key supply, especially in the spring months during heavy
ancillary service opportunity in the U.S. is the need for snowmelt (high hydropower generation) and moderate
load following and regulation to accommodate variable to low loads. During spring months with high river

Bath County Pump Storage facility in Virginia

10CAISO Final Flexible Capacity Needs Assessment for 2021, May 2020

20 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

flows in the Pacific Northwest due to snowmelt, the 3.5 REGIONAL MARKET DRIVERS
environmental requirements governing operations
along the Federal Columbia River Power System The drivers for energy storage development vary
(FCRPS) often require that hydropower managers significantly from region to region, and are driven by
address high dissolved gas concentrations produced both energy policies and market structures. A map
by unforced spill by operating at maximum hydraulic showing the current renewable and clean energy
capacity to pass as much water through turbines as policies is shown the Figure 6 below. Parts of the U.S.
possible. High hydropower generation, coupled with have established capacity markets in order for private
low loads and high wind during the spring months, investment to receive signals for new generation. New
forces FCRPS operators to take corrective actions, capacity additions can be developed based on these
limiting flexibility in an otherwise flexible system. If the market signals. In areas without capacity markets,
BPA system had access to a highly flexible bulk energy like the western U.S., a vertically integrated model for
storage system, like PSH, there would be potentially capacity expansion where state regulators (as opposed
significant capability to manage loads on a daily, weekly to regional markets) play an integral role in determining
or seasonal level – allowing wind generation to be more what new resources are built. There are several ways
fully deployed and recognized in the regional electric this can happen including long-term capacity contracts,
system. inclusion in a utility’s Integrated Resource Plan (IRP),
or the utilization of existing transmission capacity

Figure 6. Current renewal and clean energy policies.

SUPPORTING THE CASE FOR PUMPED STORAGE 21

 planning allowing PSH projects to develop in areas increased the need for resilient capacity and ancillary
where a portion of the project can offset the need for services and decreases the supply at the same time.
transmission development. Organized regional markets PSH’s unique characteristics make it ideal to help the
such as PJM, CAISO and ERCOT have seen recent state achieve its clean energy goals while continuing to
grid reliability challenges due to a number of issues, improve grid reliability and resiliency. Without market
including transmission system constraints, significant signals, like those in the New England ISO, other regions
expansion of variable renewable resources, and recent must rely on policymakers and long-term planning to
extreme weather events. In the Midwest, regional provide the signals for developers and investors to act.
transmission organizations feature capacity markets
that include vertically integrated utilities as well as
3.5.2 ISO-NE Market and Existing Resources
merchant generators. As state and federal policies drive
markets for clean energy, PSH projects and other energy Achieving the regional clean energy goals in New
storage technologies can help secure energy reliability England will require contributions from both new and
and resiliency – if the appropriate market signals and existing resources and from a variety of clean energy
incentives support their development. technologies. Most New England states have programs
in place or planned to expand solar and offshore wind
3.5.1 California and the Western Grid resources to increase the supply of clean energy. These
resources are important, but not sufficient, to create
The Western energy market is significantly different an integrated and reliable clean electric grid without
from other areas of the U.S. in that several states in the support from other renewables and storage. Other clean
region have established aggressive renewable energy energy resources like pondage hydro and PSH can be
targets and greenhouse gas reduction goals. Currently, scheduled to provide power when it is the most valuable,
in California, the state law requires all electricity sales both for reliability and for emission reduction purposes.
to come from renewable or clean energy by 2045. For Currently, the value of being able to dispatch in order
California to achieve this goal a regional approach must to optimize emission reduction contributions is not
be considered. CAISO is currently utilizing the Energy reflected in any market structure, and as a result, these
Imbalance Market’s (EIM) for 15-minute scheduling resources are under-utilized as a complement to variable
while policymakers pursue a regional RTO throughout solar and offshore wind. To avoid locking in fossil-
the West. California’s ambitious energy goals will resources as the provider of needed back-up reliability,
therefore impact every state connected to the Western New England states should fully tap into the existing
Interconnect grid. At the same time, these goals could renewable and storage resources that can deliver more
due to recent challenges to manage growing net load (if they are signaled to do so) and accelerate the path to
variability. For instance, the CAISO grid experienced integrating renewables with the use of zero-emissions
its first supply related blackouts in August 2020 when resources like hydro and PSH.
grid operators did not have enough access to flexible
resources. In addition to these stressed grid events, To reliably decarbonize the New England grid,
the CAISO grid also must manage its curtailment of policymakers and grid operators should create price
renewable resources. In May 2019, the CAISO curtailed incentives for clean flexibility. As noted above, while
over 225,000 MWhr of wind and solar resources. The the regional market provides some reliability signals,
amount of renewable energy curtailments has increased there is no market signal rewarding electric storage
each year in California11. Energy storage can take for carbon reduction contributions. Additionally, the
many forms from bulk energy storage to regional and regional market fails to provide adequate signals for the
local applications. Each application requires different storage duration (i.e., hours of charge stored) that will
technologies that are suitable for each application. The be required for purposes of reliability alone. Further, the
combination of increasing renewable energy resources integration of large-scale intermittent resources requires
and retirement of once-thru-cooling plants have large-scale, longer duration energy storage resources

11CAISO 2019 annual report on market issues and performance, June 2020

22 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

 to effectively capture the full value these assets provide. Power joined PJM South), the bulk of the region is still
Offshore wind and solar can provide additional value NHA RECOMMENDATIONS
driven by demonstrating to state utility commissions
if paired with large-scale energy storage. The region’s a least cost plan for resource planning. Renewable
growing solar resource is moving the net peak load Portfolio Standards are not a significant factor driving
governor response and use of kinetic energy stored as PSH can provide fast-start capabilities and the
hours later into the evening creating a multi-hour period theability
development
in unit rotors. In addition to these, pumped storage to rampof toclean energy within
full capacity in the Southeast.
a matter of a
of high demand not currently offset by
can also provide primary voltage response using
a commensurate Thefewdrivers in the
minutes, Southeast
which shouldare generally
prove highlyclean
valuableair
supply of clean energy deliveries.
automatic voltage regulators (AVR’s) and stored regulations, customer preferences, implementation
given that models recognize and value these services. of
energy of the rotor to respond immediately to theNHA
Public Utilityencourages
further RegulatoryFERC Policies Act (PURPA)
to direct RTO/ISOs
Longer duration storage, such as the three existing
deviations in grid voltage. Fast ramping and load andtoEnvironmental,
review whetherSocial market and Governance
services investor
like frequency
PSH assets, can improve carbon reductions and reduce
curtailment are features that advanced adjustable regulation and transmission functions
pressures. Air regulations (not including carbon) such as deferral
with
peak demand for fossil-fired resources
speed pumped storage projects can also provide,
during critical of new transmission (congestion management), voltage
periods least cost planning has driven the transition to natural
and are if theyso
doing areinpaired
variouswith outputcountries.
European from offshore support and relief of thermal constraints (transmission
wind and other large-scale renewables. One potential gas and reduction in coal use. Implementation of
line overloading), among others, are being valued
NHA anticipates
2. market that the
design change recent
being issuanceinofNew
considered the England PURPA has largely driven the development of solar in
appropriately, and whether all resources providing
isFERC’s Policy Statement
the Forward Clean Energy on cost recovery
Market (FCEM) for energy
design thethese
Southeast.
servicesIn recent years, customer
are compensated preferences
for doing so. These
storage,
that clarifying
accounts that energy storage resources
for delivery-time-differentiated value. The andtypes
ESG ofpressures
products have
andbecome
actions stronger
can assure drivers as
that electricity
can be compensated at the same time for
FCEM design provides higher value for clean energy market customers
marketsdemand
functioncleaner energy
efficiently and from their while
equitably, respective
at the
and transmission or grid support services, will utilities.
same Many
time commercial/industrial
using competitive markets customers
to help have
to close
deliveries in periods of greatest carbon reduction impact
further encourage the inclusion of energy storage adopted sustainability
the growing revenueorgapclimate goalsbe
that must and desire to
addressed
relative to clean energy deliveries in periods of less
technologies in long term transmission and capacity sustain existing energy storage resources and fully
carbon reduction improvement. In the meantime, this clean energy options. Even though the region is highly
planning. Through the guidance, FERC has potentially value new grid scale storage project developments.
value can abesignificant
removed realized for Newby
barrier England
makingconsumers
clear that by
regulated, states still compete for new large customers
extending programs
energy storage can beorfully
procurements
utilized andtooptimized
existing large- for NHA
4. economic
proposesdevelopment
to FERC that and compensation
those customers forare
“price-
scale electric storage, which will lower both
by grid operators, providing project developers a costs and driving
responsive demand” services be considered thatAtmore
more investment in clean energy options.
emissions.
broader range of revenue streams based on project theaccurately
same time,compensates
many states are considering
energy new or
storage resource
capabilities. NHA encourages FERC to work with RTOs/ expanded
operators clean
forenergy
charging policies,
services not just for
during meeting
periods of excess
ISOs on implementing the guidance and to direct carbon
energygoals but also
supply for economic
and grid instability.development.
NHA understands
3.5.3 Southeastern United States
RTOs/ISOs to more closely consider procurement of that such a concept for compensating the grid benefits
Investors are increasingly considering carbon emissions
certain forms of energy storage resources
In the Southeast, vertically integrated utilities mustthrough of creating load in excess energy conditions
and climate risk as material to profitability. Companies may
procurement and cost-allocation mechanisms, conflict with the Norton decision. NHA suggests that
get regulatory approval from utilities commissions that offer cleaner energy are valued higher by the
traditionally utilized for new transmission build-out. FERC investigate the viability and effectiveness of the
to own and rate base generating assets, including investment community and tend to have better credit
wholesale market energy tariff mechanism to assess the
3. pumped
In RTOs andstorage.
ISOsWhile some portions
experiencing of the
significant Southeast
growth ratings. Collectively,
practical applicationthese drivers
of that marketare resulting
mechanism in if it is
belong to regional
in variable renewable markets (i.e., Dominion
resources and increased Virginia
grid larger penetrations
in fact of renewables
fairly and accurately in the Southeast,
compensating technologies
volatility (system inertia consequences) with potential that provide that capability.
reliability implications, energy storage products such

Duke Energy’s Bad Creek Pumped Storage Hydropower in South Carolina

NATIONAL HYDROPOWER ASSOCIATION 23

 particularly solar on both the utility and company The latest generation of PSH is a culmination of design
side of the meter. This transition in the generating advancements bringing end users the most flexible,
portfolio and increasing amounts of solar on the system carbon free long duration energy storage. Operators
is also creating a need for more energy storage, which will be able to participate in more markets increasing
could include pumped storage due to the geographical the value stream of their investment. As noted earlier,
resources in the region. the first generation was primarily an energy arbitrage
play, generating when prices were high and pumping
when prices were low. Additional revenues are being
3.6 N
 EW TECHNOLOGY ADVANCEMENTS realized from regulation control, spinning reserve,
SUPPORTING PSH PROJECTS capacity, blackstart and flexibility. Today’s technology
Pumped storage technology is now in its third can provide these services but better, faster and longer.
generation. The first-generation of pumped storage In addition, 3rd generation of PS users are benefitting
was the reversible Francis runner introduced in the from frequency control, voltage support and increased
1950s. Equipment manufacturers were able to design renewable generation.
a Francis runner that worked in both generating and PSH makes up approximately 95% of the 170 GWs of
pumping modes. This first-generation was mainly built energy storage capacity globally. While electrochemical
for pairing with baseload nuclear and coal fired plants systems are becoming more ubiquitous and affordable,
built in the 60s, 70s and 80s. In the early 2000s, as these they are still challenged with providing the needed long
units aged and rehabilitations were needed, the second- duration storage. Figure 7 provides a contrast of PSH
generation of PSH focused on efficiency. Equipment and Lithium-ion batteries with respect to size, storage
manufacturers were designing units with turbine and duration and grid support services.
pump efficiencies above 90%. These efficiency gains
offered operators competitive solutions to ultimately California experiences most afternoon/evening ramp
improve their profitability. Today, we are in the third demands of 13 GWs in 3 hours or 19.5 GWhrs. The
generation of PSH design focusing on optimum largest Lithium-ion battery was recently commissioned
stability, flexibility and reliability. in California. The Moss Landing Energy Storage facility
is a 300MW 1.2 GWhr battery in Monterey County.

Figure 7. Contrast of PSH and Lithium-ion batteries with respect to size, storage duration and grid support services.

24 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

In comparison, the largest advanced pumped storage continuous pump power absorption range will be in
hydropower project in Switzerland (1000MWs) is the 70% to 100% range.
capable of 34 GWhrs.
So, going back to our example, if you have a 100 MW
As noted, Li-ion batteries are becoming more affordable, A-PSH unit and there are 70 MWs of excess solar
can be easily deployed, and provide distribution services on the grid, these MWs could be used to operate the
as shown in Figure 7. Challenges with this energy A-PSH pump.
storage include limitations on long duration storage,
3. T-PSH: Ternary pumped storage hydro
annual efficiency declines, start and stop limitations,
supply chain issues and lifetime expectancies. This type of arrangement is more flexible than C-PSH
and A-PSH. It generally has the -100% to +100%
Today’s PSH fleet is being used more and more for capability. It is composed of a multi-stage pump, a
the integration of renewables and future models are torque converter, a turbine (whether of Francis type
predicting even more demand causing end users to or Pelton type), and a motor/generator all on one
look at the 3rd generation of advanced pumped storage shaft. The motor/generator is operated in one speed
designs. The following describes the four various direction, only the torque is inverted.
equipment configurations that are available.
In our 100 MW example, the T-PSH configuration
1. C-PSH: Conventional fixed speed pumped would be able to operate from 100 MWs of pumping
storage hydro to 100 MWs of Generation.
Conventional, reversible pump-turbines are
4. Q-PSH: Quaternary pumped storage hydro
composed of a Francis type reversible pump-turbine.
Generation mode typically varies from 50% to 100%. This type of arrangement is composed of separate
However, the 3rd generation of the C-PSH enhances pumping and generating units. Instead of having
this operation from 0% to 100% of rated power in a torque converter between the pump and turbine
certain cases. So, if you have a 100 MW C-PSH it can such as the T-PSH unit, the Q-PSH uses separate
operate from 50 MW–100 MW and if of advanced shaft lines. Operation of the pump is made possible
design 0 MW–100 MW. electrically with fully-fed power electronics rather
Pump operation is limited to a single point which is than mechanically with torque converter.
the maximum output of the turbine thus the pump Both the pump and the turbine are operated at an
absorbed power is fixed and cannot be regulated. So, optimal speed. There is no need to have a compromise
if you have a 100 MW C-PSH unit you would need between the pump and the turbine so that they could
100 MW to operate in pump mode and if there is 70 share the same speed. With the separate pumps and
MWs of excess solar on the grid, these MWs could turbines, you will also realize the best efficiencies of
not be absorbed by the C-PSH configuration. the 4 options.
Additional advancements include faster mode In our 100 MW example, the Q-PSH configuration
changes, additional starts and stops and longer would be able to operate from 100 MWs of pumping
design lives. to 100 MWs of Generation.
2. A-PSH: Advanced pumped storage hydro The developers of the pumped storage project will study
(Variable Speed) their site conditions, markets they will serve, economics
This type of hydro pump storage is based on a C-PSH and make equipment configurations selections from
utilizing a Francis type reversible pump-turbine, with the aforementioned technologies. They will also make
variable speed capabilities. This capability is made selections on the number of units and MW size. For
possible with the use of power electronics that varies example, if a developer is considering a 500 MW PSH
the AC frequency on the pump end. Generally, the facility, they will conduct economic and technical

SUPPORTING THE CASE FOR PUMPED STORAGE 25

 feasibility studies of a 4 x 125 MW or 2 x 250 MW or if not more build in the next 10 years. In this same
1 x 500 MW configuration. All have their independent period, there has been 300 MW (0.3 GW) of Ternary
advantages and disadvantages. designs installed in Europe.

In recent years, Europe has been seeing steady growth of It is possible to retrofit an existing fixed speed pumped
pumped storage whereas China has been experiencing storage unit with variable speed, but often the costs
exponential growth. In the past 10 years, China has associated with this change and the space required are
commissioned 14 GW of PSH, all fixed speed except not economically viable.
for one 600 MW (0.6 GW) variable speed plant under When considering all the details that affect efficiency, a
construction. China typically locates their PSH near global cycle efficiency generally between 75% and 80%
large cities and are able to manage the grid with this wire to wire is obtained. This efficiency varies whether
configuration. It should also be noted that China views the units are operated all together, at maximum load, or
PSH as a generation asset and they have plans for similar if a few of them are operated at best efficiency.

26 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

 Recommendations
4.0
1 Finvestment
ederal policy makers should pass a federal
tax credit for storage to be on a level
4 Fgeneration
ERC should develop clear policies on how
assets like pumped storage can compete
playing field with wind and solar. The credit should to provide transmission services while avoiding
a 10-year safe harbor to account for PSH’s long double recovery of revenues and limiting impacts
development timeline. to current market participants.

2 Vconsideration
ertically integrated states should require
of long duration energy storage
5 Sstorage
tates policy makers should allow all energy
technologies, including PSH, to participate
resources in integrated resource planning in renewable portfolio standard programs (or clean
processes, including requiring equal consideration energy standards) on a technology neutral-basis.
with traditional resources. In addition, state energy storage targets should
incorporate longer term goals to ensure the most

3 Oneutral
cost effective long-duration storage technology,
rganized markets should design technology-
pumped storage, can compete with other
products and services for future system
technologies.
needs. A decarbonized grid will require many
essential reliability services that currently are
under-compensated or not compensated at all
(examples include fast ramping, primary frequency 6 for
Request FERC to establish a common methodology
value of energy storage and capacity products
response, inertia, and load following). Grid that can be utilized across the spectrum of
operators and FERC should implement longer term technologies available to provide these services.
market designs to ensure capital is attracted to
critical grid services in advance of the demand.
 equest FERC to streamline the licensing process
7 Reven further for low-impact pumped storage
hydropower, such as off-channel, modular or
closed-loop projects.

 educe out of market dispatches for pumped

8 Rstorage by creating products that truly value

 PSH services and reliability and create products

for inertia, primary frequency, synchronous
Rocky Mountain Pumped Storage condensing, etc.
Hydropower Plant in Georgia

RECOMMENDATIONS 27
 PSH

Dominion Energy’s Bath County Pump Storage facility in Virginia

NATIONAL HYDROPOWER ASSOCIATION | PUMPED STORAGE REPORT 9

FAQs
Frequently Asked Questions
Q Is PSH a generation or transmission resource? is a concern about mixing and matching of these
revenue streams. It is crucial to identify market and
A Pumped Storage is a unique asset that can provide a
regulatory mechanisms that can more fully value
full suite of generation and transmission services. For
pumped storage and other dual-use resources for
instance, pumped storage can offer generation-based
their generation and transmission functions..
services including energy, frequency regulation,
operating reserves and other essential reliability
services. In addition, PSH’s flexibility provides the Q Why is PSH different than conventional
grid with fast ramping capability, minimum run hydropower?
times and multiple quick starts. Like other energy
A Depending on the arrangement, modern advanced
storage technologies, pumped storage can also offer
pumped storage is much more akin to a water battery
transmission services such as congestion relief,
than a traditional hydropower project. Similar to
thermal management, and voltage support. These
an electrochemical battery, pumped storage has the
services are complimentary to the generation-based
ability to charge its upper reservoir by pumping
services because the transmission services are not
water uphill or discharge energy when there is a
always needed and the “market-based” generation
demand for energy — i.e., an oversupply of renewable
services can be provided during down times.
resources. While PSH generates electricity through
All these services will become more important similar means as a traditional hydropower project, it
as the grid transitions to a system dominated by can serve as a load to consume excess energy like a
increased renewables that will increase the demand charging battery. Based on the physical arrangement,
for essential generation and transmission services. some modern PSH project are located completely
As noted previously in this report, there still exists off-stream from any navigable waterways, which
market barriers for resources who can provide means they have significantly less environmental
both generation and transmission functions from impacts (i.e. fisheries). Other modern designs
fully capturing both value streams. Transmission have incorporated advanced civil infrastructure
development processes and energy markets and construction technologies to minimize
are not designed to fully value a resource that environmental impacts. Unfortunately, most state
receives revenue from both the energy markets and federal regulatory and permitting processes do
and traditional rate regulation for transmission not recognize a difference between modern advanced
functions. As the former is market-based and the pumped storage and the traditional hydropower
latter is largely determined by cost of service, there projects along a main stem river system.

FREQUENTLY ASKED QUESTIONS 29

 Q H
 ow does PSH compare with other forms of in 3 hours or 39 GWhr which is currently supplied by
energy storage systems? thermal (gas peaker plants), along with hydropower,
pumped storage hydro, and with some contribution
A Energy storage systems can be classified into
from batteries and system imports. For perspective,
five categories: Mechanical (ex. pumped storage
the largest Li-ion battery project is currently being
hydro, flywheel, gravity and compressed air),
built in California has a capacity of 300 MWs and
Electrochemical (Lithium-ion, flow batteries or
discharges in 4 hours resulting in 1.2 GWh of energy
similar), Electrical (supercapacitors), Thermal
storage. The largest PSH plants in California are over
(cyrogenic or molten salts), and Hydrogen (fuel cells).
1500 MWs and have typically 8 hours of storage or
Globally, pumped storage represents approximately
12.0 GWh.
95% of the total 160 GW of the installed energy
storage systems and offers the best large scale, long
duration, renewable solution. Q How many daily starts and stops are energy storage
systems designed for?
As shown in Figure 8, pumped storage systems range
in power from 50 MW to 1000+ MW installations A Advanced PSH equipment is being designed for 50-
and can store energy from hours to days. year life cycles and up to 10 stops per-day. In contrast,
modern battery systems are typically designed for
When considering energy storage systems, the total a 10-year life cycle with approximately 1 start and
amount of energy stored in Megawatt-hours or stop per day. More importantly, the continued use
Gigawatt-hours (MWh or GWh), must be considered of a battery system will degrade the ability to charge
along with total capacity in Megawatts or Gigawatts and discharge over time, a PSH project shows no
(MW or GW). For example, in most summer degradation (performance) with continued usage
late afternoons between 4 PM to 7 PM California over its five-decade lifespan.
experiences a ramp that requires in excess of 13 GWs

Figure 8. Pumped storage systems range in power from 50 MW to 1000+ MW installations.

30 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

Q What is the timeline for construction? Permitting? In addition, the larger societal benefits of multi-
purpose PSH projects are not factored in the overall
A PSH consist of large civil construction elements
economics – specifically the projects ability to provide
that can take years to build, primarily the tunnels,
water supply, flood control and other community
powerhouse and dams (if needed). An optimistic
benefits (i.e., recreation, property values/tax base).
licensing and construction timeline for a new PSH
from inception to generation is seven to ten years. From a legislative policy perspective, PSH is often
Obtaining a new project license to construct may critically undervalued regarding the grid reliability
take three to five years, or possibly longer before the services provided, especially when projects are
developer will have the authority to begin project used to provide key ancillary services or developed
construction, depending on whether a project as a long-duration storage asset (i.e., the ability to
requires permits from other Federal or State agencies continuously provide energy for 8 hours or greater).
prior to FERC action. For closed loop PSH and other Many state energy policies either exclude large
certain low-impact arrangements, FERC regulations (storage) hydropower or any PSH in the RPS policies
in April 2019 shortened the application to licensing or place capacity limits on individual project sizes
timeline to a maximum of two years — however the to qualify. While smaller PSH can be economically
pre-application process may still take several years. A viable in certain markets, when policies restrict
three- to five-year construction period is common for project size to discourage individual projects from
most large projects. capturing the large percentages of policy storage
targets, they discriminate against technologies like
The major powerhouse equipment, including pump-
pumped storage that are most cost effective at
turbine/motor-generator, is procured in parallel to the
larger scales.
design and construction phase. Timelines for model
testing, design, manufacturing, delivery, install and
commissioning of the PSH hydro equipment typically QW
 hat are some of the challenges getting PSH
takes 36 to 48 months and is heavily dependent on understood by the public?
size, references and manufacturing availability. This
A Pumped storage projects act as “water batteries”
schedule is coordinated with the civil activities.
for the grid. Existing facilities that were built to
Model testing typically may require 12 months,
integrate non-flexible nuclear and coal are now cost
engineering and manufacturing is approximately 24
effectively integrating wind and solar at huge scales.
months and installation and commissioning requires
In fact, PSH represents the largest share of storage
12 months. Of course, all of these timelines are
on the grid and has continued to provide essential
contingent on the equipment configuration, number
reliability services to ensure the lights stay on during
of units and MW size.
the energy transition. This change in function,
from integrating thermal resources to integrating
QH
 ow is PSH treated from a legislative policy renewables is not well-understood by the public. In
standpoint? addition, all hydropower technologies, including
PSH are often thought to have a major adverse
A Pumped storage is generally treated the same as
environmental impact on rivers and aquatic plants
traditional hydropower from a regulatory perspective,
and animals. Many new PSH developments are either
including state and federal licensing and permitting
completely off stream without any new dams or the
requirements, as well as reporting (i.e., FERC Form
projects utilize existing reservoirs and infrastructure
1). The regulatory requirements for hydropower
—significantly reducing their environmental and
and pumped storage projects are significantly
ecological impacts. PSH is also believed to be costly
more burdensome compared to other renewable
to construct. Studies show that PSH technology
energy projects. For closed loop PSH, developed
is often less costly than other energy storage
without damming at navigable river or stream, the
technologies for large scale grid applications.
regulatory requirements are equally burdensome,
especially compared to other energy storage systems.

FREQUENTLY ASKED QUESTIONS 31

 Q Would increased PSH lead to a reduction in Figure 5 on page 17 highlights some of the cost
fossil generation? comparisons for advanced pumped storage and
Lithium-ion batteries. For planning purposes, the
A PSH is currently the most economical and proven
power-to-energy ratio of pumped storage ($86/
technology for long term energy storage. The longer-
kWh) compares very favorable to both recent battery
term ability of pumped storage allows it to be the
cost estimates ($300/kWh) and projected 2030 costs
ultimate integrator of all other types of generation
($165/kWh). On a CAPEX basis, it is common to
technology. Its purpose is not to replace any single
encounter costs of approximately $2,500/kW for
form of energy production, but rather to make
projects in the 500 MW range and less than $2,000/
energy production as efficient as possible relative to
kW for larger capacities (1,000 MW)
the standards of the day. An important concept to
remember is that pumped storage has the capacity to
integrate other types of generation, which is key for Q What is the longevity of a PSH project?
evolving state or Federal energy policies. It originated
A Advanced PSH equipment is being designed for not
as an integrator of base load nuclear and large coal
only multiple starts and stops per day and faster
plants but has transitioned to include integration of
transition times, but also longer design life. A turbine
wind and solar resources. Therefore, it is not intended
can be expected to last 50 years and the generator can
to replace coal plants as a baseload resource but does
be expected to require a rewind every 30 to 40 years.
have the ability to replace natural gas peaker plants
Other plant equipment, such as main inlet valves
that are used to mitigate large evening ramps (i.e.,
can also be expected to last 50 years. Regarding the
California Duck Curve) and continue to integrate
civil infrastructure, the primary features include the
renewable energy resources as the thermal/fossil
dams, powerhouse and tunnels/penstocks, which are
generation fleet retires.
designed to have a lifespan up to 100 years.

Q How much does a PSH project cost to build?

Q Why hasn’t PSH been built in the U.S. in
A  PSH projects are unique because they are large over a decade?
civil projects, and their costs can range based a
A The most recent pumped storage project
number of factors including project size (area and
commissioned in the U.S. was a closed-loop 40-
capacity), availability of existing infrastructure
MW project in southern California (2012). The
(i.e., reservoirs, dams, tunnels, transmission) and
last two large-scale PSH projects commissioned
regulatory/environmental drivers. Ultimately their
in the U.S. were completed in the 1990s, under a
cost is driven by the number, type and size of their
vertically integrated utility construct (during the
civil structures. The projects can be more expensive
electric market deregulation). Since deregulation,
than traditional energy supply resources such as
PSH projects in regional markets require RTOs/
natural gas plants or solar facilities on a cost/KWh
ISOs to have enough market products to justify
basis – but it is important to remember PSH project
the investment. Furthermore, investment in PSH
can serve as both a generation resource and an
projects require support from long term planners and
energy storage resource, which natural gas and solar
regulators to allow for long-term financing. Utility
plants cannot. However, as a resource specifically
and grid operators use energy planning models that
intended for energy storage requirements to integrate
project long term energy needs that form state and
large amounts of intermittent energy, they are very
regional policies that have resulted in greenhouse gas
competitive – especially when looked at over the
emissions reduction targets or the procurement of
lifecycle of the project (typically greater than 50
energy storage resources. In the past decade, energy
years). While other storage technologies like batteries
models have used low-cost thermal resources (i.e.,
may have an initial lower cost to install, PSH provides
natural gas peakers) to address the large evening
a greater value due to the larger capacity and service
ramps and provide common grid services, but with
life of the asset.
aggressive climate policies being implemented

32 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

 across the country, models are now highlighting because they are located “off-stream,” potentially
energy storage resources to help meet policy goals. minimizing aquatic and terrestrial impacts, and they
When discussing energy storage resources, it will be often have better siting flexibility than open-loop
important to understand the technical capabilities projects. In addition, it is important to note that
between technologies. As mentioned in this paper, every energy technology has environmental impacts
several market, regulatory and public policies do not including wind, solar and batteries. One advantage
value the unique benefits of pumped storage projects. of PSH is the longevity of the asset. The projects are
initially licensed for up to 50 years, but will could be
relicensed and operate for over a century with only
Q What is the outlook for new PSH?
modest maintenance capital investments. During
A In the past decade, there has been a considerable this time, other types of renewable energy assets
increase in the planned deployment of pumped will be replaced multiple times due to the usable life
storage projects in the U.S. According to DOE’s expectancy of resources like solar panels, chemical
2021 Market Report, at the end of 2019 there were batteries, wind turbines, invertors, etc. As these other
a total of 67 pumped storage facilities under various types of renewable energy devices are replaced, they
stages of development representing 52.5 GWs of new will generate varying amounts of waste depending on
capacity, a 22% increase from 2018. The bulk of these technological developments for recycling that are not
projects are in the western US which account for 62% yet present in the industry.
of projects and 75% of capacity. Below is a regional
breakdown of pumped storage projects that are under
QW
 hat are the life cycle costs of PSH compared
development:
to batteries?
Northwest: 11 projects, 5,678 MWs
A A recent paper written by David Victor of UC San
Southwest: 27 projects, 29,744 MWs Diego compared the cost of PSH and lithium-ion
Northeast: 15 projects, 6,565 MWs battery technology. PSH technology costs were shown
Southeast: 8 projects, 5,290 MWs to be 30% lower over a 40-year period. Lithium-ion
technology requires frequent replacement of the
Of the 67 projects only three have received their
battery cells increasing costs and waste.
full FERC authorization and none have begun
construction. The three licensed projects are: Eagle
Mountain in Southern California (1,300 MWs), Q How do modern PSH differ from original designs?
Gordon Butte in Montana (400 MWs) and Swan Lake
A While there have been recent advancements in
in Oregon (393 MWs).
the design and construction of water conveyance
Although not all the 67 projects will become (tunnels, penstocks) and civil infrastructure (dams
operational, the growing level of investor interest and powerhouse) components, resulting in lower
is a strong signal that there is significant consumer overall costs and improved performance, the most
demand for long duration storage to balance the significant project design advancement has been the
system, integrate renewables and increase the development of closed-loop pumped storage projects
resilience of the grid. where there are no new on-stream dams. This offers
a significant environmental benefit as the project
configuration avoids most impacts on streams or
Q What are the environmental impacts of PSH?
fishery resources.
A A recent DOE report, A Comparison of the
The greatest technical advancement in PSH projects
Environmental Effects of Open-Loop and Closed-
in the past decade has been related to equipment
Loop Pumped Storage Hydropower, found that
designs, performance, and computational modeling.
environmental impacts of closed-loop projects are
One major difference with all forms of hydropower
generally lower than those of open-loop projects

FREQUENTLY ASKED QUESTIONS 33

 is with technological advancements in hydraulic Q What are the estimated number of jobs that would
computer modeling. New advanced computer models be expected during the development of a pumped
are helping to produce pump turbines with much storage project?
higher efficiencies and power output. Numerous PSH
A Each project would be unique in the number of
asset owners have elected to upgrade existing pump
employees needed but for planning purposes, the
turbines to acquire these new capabilities that would
following job estimates have been used:
be inherent in any new project.
• Engineering/Design/Permitting – 100 jobs for
Another key technological advancement is the approximately 7 years
introduction of significant improvement with PSH
• Manufacturing – 50 jobs for approximately 3 years
power electronics and the ability to use variable
speed machines. This has resulted in machines with • Construction/Commissioning - 1000 jobs for
wider regulating ranges and the ability to provide approximately 4 years
variable load and generation which is essential for • Project Operations – 25 permanent jobs
grid stability and integrating variable wind and solar Ongoing jobs at pumped storage facilities are
resources. typically high paying above the median wage of the
surrounding areas.
QW
 hat are some basic facts about PSH installed base,
locations, sizes?

A According to the Energy Information Administration

(EIA), there is 22,878 MWs of total pumped storage
capacity held by roughly 40 PSH facilities in the U.S..
These facilities range in size from 20 MW to 3 GWs
and are located in 18 states with five of those states
having 61% of the national total capacity. Those
states are: California (17%), Virginia (14%), South
Carolina (12%), Michigan (10%) and Georgia (8%).

34 2021 PUMPED STORAGE REPORT | NATIONAL HYDROPOWER ASSOCIATION

This report was prepared by the National Hydropower Association’s
Pumped Storage Development Council. A special thanks to our major
contributors: Matt Pevarnik, GE; Justin Trudell, FirstLight Power; Scott Flake,
Scott Flake Consulting; Deb Mursch, GE; Michael Manwaring, McMillen
Jacobs; Rick Miller, HDR; Preston Pierce, Duke Energy; Kevin Hanstad,
Stantec; Nancy Craig, HDR; and many others.
 601 New Jersey Ave NW, Suite 660
Washington, DC 20001
202.682.1700 | hydro.org

36 2021 PUMPED STORAGE REPORT