Community Highlights

Accurately estimating the full value of pumped storage hydropower (PSH) is key to supporting future developments, but PSH provides both market and non-market services that can be difficult to quantify. To address this, Argonne National Laboratory led a multi-laboratory team to create the Pumped Storage Hydropower Valuation Tool. Developed with input from industry participants and guided by a technical advisory group consisting of industry experts and other stakeholders, the free tool provides valuation guidance that accounts for all grid services and contributions from PSH plants. Users of the tool are guided through the 15-step valuation process that features a back-end benefit-cost analysis tool, a price-taker valuation tool for small-scale PSH, and a multi-criteria decision analysis tool. There is also an accompanying guidebook that provides consistent, repeatable methods to more accurately value PSH projects and inform stakeholder decisions on future PSH investments.

Learn more about the PSH Valuation Tool from Argonne National Laboratory. 

Wildfires can affect hydropower facilities by altering water quality and timing of runoff. Forest restoration efforts can mitigate these damaging effects and result in more water supply—further benefiting hydropower by increasing the total potential revenue from water power generation. But it is challenging to accurately estimate the value of added water supply from forest restoration efforts for hydropower facilities. 

Researchers from Blue Forest Conservation, University of California Davis, and The Nature Conservancy simulated the effects of forest restoration in a California reservoir system and found that it could increase average annual water runoff to rivers in the watershed. That additional water supply would boost hydropower electricity generation and potentially increase revenue equivalent to 8-15% of the initial forest restoration costs. It’s an example of how improving the valuation of power and non-power hydropower services would have benefits for hydropower and beyond. 

Learn more about the research from Blue Forest. 

Appropriately valuing hydropower’s contribution to the grid as energy markets evolve is key to justifying future hydropower investments and operations. The move towards clean energy technologies that do not have a direct fuel cost means that future electricity markets will be dominated by frequent, extended periods of low to zero electricity prices. Such unpredictable energy markets could make it prohibitively risky to develop new energy generation in the future. A report by Argonne National Laboratory and Pacific Northwest National Laboratory investigated the role of hydropower resources in future zero-carbon markets to set the stage for discussions about alternative electricity market mechanisms. Specifically, the report highlighted how generators could be compensated for relatively low-cost hydropower energy and found that hydropower was likely to benefit in a zero-carbon system by providing flexibility and energy storage in systems with high percentages of variable renewable resources. 

Learn more and read the report, “Price Formation in Zero-Carbon Electricity Markets: The Role of Hydropower.”

Economics is a key driver behind the mix of energy sources contributing to the U.S. electric grid. The market value of different energy sources—such as hydropower, solar, wind, or fossil fuels—can determine how competitive they are on the power market. But it is a challenge to accurately estimate the value of hydropower grid services because some of hydro’s key attributes—flexibility and reliability—aren’t included in traditional valuations. To better reflect hydropower’s value, researchers from the Electric Power Research Institute simulated different energy and operating scenarios in the Western Electric Coordinating Council (WECC) region, which encompasses the western United States and parts of Canada and Mexico. With funding from the U.S. Department of Energy to quantify the value of hydropower in the electric grid, this research established the many value streams available to hydropower and identified opportunities to better assess the value of the full range of services that hydropower provides.

To learn more, read the report and check out a summary from Hydro Review.