This report is a joint project between Bonneville Power Administration and Oregon Institute of Technology completed in partial fulfillment for the Masters of Science in Renewable Energy Engineering degree. The studies completed for this report investigate the economic merits of pumped hydroelectric energy storage in the Pacific Northwest region. The first set of studies uses a market-based analysis to compare project costs and potential value streams. Primary findings are that energy arbitrage alone is not sufficient to justify the cost of installing pumped storage on the grid. The sales of INC and DEC reserve generate about four times the revenue of simple energy arbitrage. By including them in the simulation, four of the 17 studied cases ended up with a positive net present value after 40 years of operation. While this is promising, current markets do not support the sales of reserves in this fashion and many forecasts and assumptions are relied on. The results should be considered as an upper bound rather than a median projection.
