Concept for cost-effective pumped hydro energy storage system for developing countries

This chapter looks at how economic and financial indicators are applied in assessing and selecting cost-effective pumped hydro energy storage (PHES). It highlights how energy storage projects such as PHES are selected based on their cost-effectiveness. These economic measuring factors are important in the development of PHES; thus, it determines the viability of the project and in most cases compared with other storage technologies. The economic factors or indicators used in evaluating PHES include net present cost, net present value, levelized cost of energy or electricity, payback period, internal rate of return, Avoided cost of energy, benefit-cost ratio, etc. The study covers how these economic factors are determined and considered in the cost-effective determination of PHES. The main findings of the chapter reveal that the core cost components to consider in PHES are the components cost, associated operations cost, decommissioning cost, and performance-related cost. Finally, the existing financing models available for PHES projects is discussed.