Pumped storage hydro (PSH) has provided the U.S. with greater capacity for energy storage and grid reliability since the 1920s, although not to its full potential. The capabilities of PSH could be realized as a result of freshly passed energy legislation in the Senate. If S.2012 is signed into law, it would direct the Federal Energy Regulatory Commission to “identify and determine the market, procurement, and cost recovery mechanisms that would encourage development of PSH; and properly compensate those assets for the full range of services provided to the power grid.”
The Department of Energy (DOE) agrees, and recently recognized that “the value proposition of PSH lies in its ability to provide operating flexibility to balance system loads and variable generation from other renewables.” And with a growing abundance of clean energy generation, particularly in the northwest due in part to aggressive RPS standards, the importance of developing future PSH projects continues to grow.
However, developing PSH is a costly, long term endeavor presenting technical and market-based challenges. Projects on average take between seven and ten years to construct. But even before we consider new development, there is a fundamental challenge to address. We must understand how to properly compensate PSH for the entire range of services it provides to the power grid. More research must be done to understand the full value of services provided from PSH technologies. Designing appropriate compensatory policies to grow PSH begins after we have authoritative and credible research from DOE to assess the broad array of potential benefits and values that pumped storage hydro would bring to both the power grid and hydro operations.