ENERGY SECURITYHydropower and the Future of Energy

To combat climate change, the United States has set ambitious goals toward a clean energy, carbon-free future. Hydropower — one of humankind’s oldest power sources — will be critical to meeting those goals. Pumped storage hydropower (PSH) accounts for about 93% of all U.S. energy storage capacity, and a new valuation guide is helping developers, plant owners and other stakeholders capture all the aspects of a PSH project from potential revenue streams, to benefits, to costs.

In a recent conversation hosted on the Instagram channel of the U.S. Department of Energy’s (DOE) Argonne National Laboratory, three guests discuss the value of hydropower to the future of energy, opportunities and challenges ahead for hydropower and its connection to the future electric grid, and how utilities can use the PSH valuation guide as they evaluate new investments.

The conversation includes hydropower engineer Katie Jackson from DOE’s Water Power Technologies Office, Vladimir Koritarov, director of the Center for Energy, Environmental, and Economic Systems Analysis (CEEESA) at Argonne, and Erik Steimle, vice president of Project Development at Rye Development.

You can watch our video interview with Koritarov on Argonne’s Instagram or Youtube.

Q: What does the Pumped Storage Hydropower Valuation Guidebook seek to achieve?
Katie Jackson: Everybody knows the Biden administration has set the goal to build a 100% clean energy power sector by 2035 and to reach net-zero carbon emissions by no later than 2050. Hydropower and pumped storage hydropower are, and will, continue to be key tools for reaching those clean energy goals. This includes strengthening our existing facilities and a need to build new PSH with these high renewable penetrations on the horizon.

So as part of DOE’s HydroWIRES (Water Innovation for a Resilient Electricity System) Initiative, the objective of this Pumped Storage Hydropower Valuation Guidebook project was to develop a detailed step-by-step guidance that PSH developers, plant owners or other stakeholders could use to assess the value of an existing or potential new PSH plant and their services. Specifically, we wanted to develop this valuation guidance to support consistency across PSH project comparisons and project designs, test the guidance by applying it to two selected PSH projects, and then disseminate this PSH valuation guidance to the hydropower industry and beyond.

Q: What is the HydroWIRES Initiative and what’s included in this portfolio?
Jackson: Hydropower is used extensively in the power system for flexibility and resilience and pumped storage hydropower represents about 93% of our U.S. grid storage today. It’s clear that hydro and PSH will be critical contributors moving forward for decarbonization.