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DOE OSTI2026

Challenges and Opportunities for Electric Utility Modeling and Asset Valuation Frameworks: Case Study on Valuing New Pumped Storage Hydropower

Asset valuation by electric utilities is becoming increasingly difficult in the rapidly changing electric sector. Rapid deployment of variable generation and inverter-based storage systems along with uncertain demand growth, climate, policies, and other factors create a challenging environment for understanding the value proposition of a new potential asset. This report describes an effort between the Tennessee Valley Authority (TVA) and three U.S. Department of Energy laboratories to perform a detailed review of utility modeling and analysis practices for asset valuation and identify challenges and opportunities for advancing its methods into the future. It focuses on a case study of new potential pumped storage hydropower (PSH) because of growing interest in new PSH capacity to provide energy balancing, firm capacity, and a range of ancillary services. Staff from the DOE labs conducted systematic interviews about current practices in capacity expansion modeling, production-cost modeling, hydrological modeling, and transmission stability modeling while also discussing how scenario analysis is conducted and how models and data are integrated. The effort resulted in a set of model, integration, and scenario recommendations that could be valuable to TVA, other utilities, system operators, and other stakeholders conducting integrated grid analysis. Individual model recommendations suggest exploring computational tradeoffs with detail and resolution across spatiotemporal structure, supply- and demand-side details, transmission overlays, market interactions, and ancillary services. Automated processes to pass data between models and conduct larger scenario suites could also enhance valuation practices by enabling a more consistent study of asset value across a broader range of uncertain future grid conditions where PSH could be particularly valuable. TVA and other industry stakeholders can learn from and adapt applied research-grade methods developed by DOE laboratories and other research institutions to improve decision making and accelerate progress towards a reliable, economic, sustainable energy system.

13 HYDRO ENERGY↗
DOE OSTI2026

Africa Battery Energy Storage Systems (BESS) Capacity Building Utility-Scale Storage: BESS Valuation, Tariffs, and Remuneration [Slides]

Utility-scale Battery Energy Storage Systems (BESS) are key to enhancing grid reliability, integrating renewable energy, and providing operational flexibility. Designing effective valuation, remuneration, and tariff frameworks is essential to ensure both system benefits and financial viability for developers. This presentation outlines a structured methodology for evaluating BESS projects, covering policy and legal considerations, cost and revenue analysis, benchmarking, financial sensitivity, and risk assessment, while ensuring alignment with public interest. It also explores valuation of multiple storage services - bulk energy, ancillary services, and infrastructure support - and monetization strategies through capacity payments, energy tariffs, tolling, arbitrage, and non-wires alternative payments. Technical factors, including round-trip efficiency, degradation, and storage duration, are integrated into financial and operational modeling to quantify both system-wide and project-level benefits. Through case studies and simulation-based approaches, this framework provides regulators, utilities, and developers with practical guidance for tariff design, payment structures, and investment decisions, maximizing the economic and societal value of BESS deployment.

25 ENERGY STORAGE↗
DOE OSTI2025

Development of an Interactive Valuation Model for Distributed Energy Resource Value: Cooperative Research and Development (Final Report)

The Oklahoma Office of the Secretary of Energy and Environment (OSEE) seeks to address perceived challenges and barriers to the deployment of distributed energy generation resources (DERs), including solar and other technologies, in the state of Oklahoma. The Scope of Work (SOW) associated with CRD-18-762 covers two tasks: (1) Interactive Valuation Model Requirements Document and (2) Consumer Protection Assessment. Follow-on work was completed under a separate CRADA (CRD-19-00788).

29 ENERGY PLANNING, POLICY, AND ECONOMY↗
DOE OSTI2026

Developing a Framework for Valuation of Grid Services

The electric system is rapidly evolving and growing, raising new questions about how to define and value grid services delivered by a diverse set of resources, including customer-owned assets. This report advances a service–parameter–value framework that links what a grid service does to why it matters, and how its benefits are evidenced. We build upon prior efforts (Bender et al. 2021) and extend them to include value categories (reliability, resilience, cost & access, and security) with primary and secondary tiers, service-specific value streams that explain how benefits materialize, and metrics that make valuation traceable and comparable. We apply the framework to the six core grid services defined in (Kolln et al. 2023): Frequency Response, Regulation, Reserves, Energy, Voltage Management, and Blackstart and demonstrate it on three use cases to highlight the adaptability of these value streams. Further, we outline how the framework integrates with existing tools such as asset optimization, hosting capacity and cost-benefit analysis, and propose a path to portable qualifications and consistent stacking rules for use in tariffs and filings. Finally, we identify future pathways for research and application research needs to support standardization and decision-ready comparisons across services, assets, and architectures.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2026

Techno-Economic Evaluation of a 600MW Pumped Storage Hydropower Plant using the Pumped Storage Hydropower Valuation Tool

This paper presents a techno-economic evaluation of the proposed 600 MW, 8-hour Craig – Hayden pumped storage hydropower project using the U.S. Department of Energy’s Pumped Storage Hydropower Valuation Tool. The analysis integrates plant technical characteristics, regional grid conditions, and market-based operating assumptions to quantify stacked value streams from energy arbitrage, capacity, ancillary services, transmission congestion relief, and reliability. Both price taker and price influencer frameworks are applied to examine the impact of market participation and system interactions on lifecycle economic performance using Benefit - Cost Analysis and Multi - Criteria Decision Analysis. The results show that the price taker approach provides higher revenue estimates based on exogenous price signals, while the price influencer approach captures production cost savings, renewable curtailment reduction, and market price formation, yielding more conservative but system-representative outcomes. The study demonstrates the strategic value of long-duration PSH for enhancing operational flexibility, resource adequacy, and grid reliability in a high-renewable Western Interconnection.

Bhattacharyya, Arjun [ORNL] (ORCID:000900060976046↗
DOE OSTI2025

Swing Contract-Based Valuation for Distributed Energy Resources in Transactive Energy Systems: A Reinforcement Learning Approach

With the proliferation of distributed energy resources (DERs) and power grids with high fractions of renewable energy, market constructs are evolving to allow DERs to participate in multiple possible markets, at different levels of grid hierarchy. The effective participation of DERs in market environments is aided by swing contract-based pricing mechanisms, whereby DERs have a two-part compensation structure – one for their reservation/commitment and another for performancedriven ex-post payment for their actual mobilization during dispatch. In this paper, we propose a reinforcement learningbased (Q-learning) approach that allows a rational DER agent to select the market it wants to participate in within a composite market environment where individual markets are coordinated by possibly different actors. The proposed Q-learning framework aids DERs in their self-valuation by implicitly maximizing their own payoff through market participation, assuming a swing contract-based compensation structure. We complement our work through simulation-based investigations where factors affecting the DER decision making process, such as parametric uncertainties in market (and grid) environments, are studied.

Naqvi, Syed Ahsan Raza↗
DOE OSTI2026

Hydropower Cybersecurity Risk Management and Valuation

Advancements to DOE WPTO funded Hydropower Cybersecurity Value-at-Risk Framework application allows stakeholder to translate risk-based assessments to quantitative scores allowing to better decision making for cybersecurity investments.

13 HYDRO ENERGY↗
DOE OSTI2025

Valuation of Anode Materials for High-Performance Lithium Batteries: From Graphite to Lithium Metal and Beyond

Lithium-ion batteries have revolutionized energy storage, yet advanced technologies such as electric vehicles and eVTOLs demand even higher performance and safety. Anodes, the negative electrodes, are crucial in enhancing batteries’ safety, lifespan, and fast-charging capabilities. This review paper comprehensively evaluates the progression of anode materials from traditional graphite to advanced anodes like lithium metal. Graphite anodes, with a capacity of 372 mAh g −1 , enabled the first commercial lithium-ion batteries, but future applications require higher energy densities and fast-charging capabilities. Emerging anode materials, including alloying, and conversion types, as well as lithium metal, offer significantly higher capacities, with lithium metal offering a theoretical capacity of 3 860 mAh g −1 . However, these advanced anodes face challenges such as volume expansion, high surface reactivity, sluggish Li+ kinetics, and unstable lithium deposition morphologies. Here, this review critically examines the electrochemical performance, interfacial properties, mechanical attributes, and stability issues of various anode materials. It further discusses solid electrolyte interphase (SEI) formation, strategies for enhancing interface stability, and the requirements of anodes for solid-state batteries. Additionally, the review explores potential solutions for limitations with each anode type, highlights innovative anode-free architectures, and evaluates the current and future trends of battery anode industries. Ultimately, this paper aims to guide the development of high-performance anode materials, paving the way for the next generation of efficient, reliable lithium batteries.

Alloying anodes↗
DOE OSTI2025

Long-Duration Energy Storage Grid Integration-Valuation Framework and Incentive Gaps

Given these challenges and current modeling gaps on Long Duration Energy Storage (LDES), enhancing the structure and design of existing planning, operations, and organized wholesale markets can better characterize the value of LDES to the power system. To more thoroughly assess the gaps and barriers to LDES investment and readiness for integration into a future grid, we conducted stakeholder outreach through an online survey, interviews with individual independent system operators/regional transmission organizations, and a literature review. Based on this assessment, we identified a set of opportunities for LDES focused development, including a framework to quantify the contributions of LDES on resource adequacy, reliability, and resiliency. Specifically, we identify the potential demand for and benefits of an open-source, LDES-centric evaluation framework that can guide future planning, operations, market design, and policy reforms.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2025

Stepping into the Midwest Bioeconomy: Stakeholder Engagement and Geospatial Tools to Assist in Perennial Bioenergy Crop Decision Making and Entrepreneurship

This project, “Ecosystem Services and Farm Entrepreneurship Technical Assistance,” was a three-year project originally planned for FY22–FY24. Due to a late start and a few extensions, it is being completed in early FY25. This project explored opportunities to support the deployment of a bioeconomy with a circular, more sustainable supply chain. Using a tool developed by Argonne to identify agricultural areas suitable for use in the bioeconomy, we sought to create opportunities in the bioeconomy as biomass producers, bioenergy users, and environmental entrepreneurs. We proposed to focus at the beginning on enhancing the tool’s capabilities, while engaging with key stakeholders to improve and expand the tool’s functionality for all potential stakeholders in the bioeconomy. We believe that expanding our tools and technologies, coupled with conversations in agricultural spaces, will be needed as we continue to explore how best to offer farmers whole-of supply-chain opportunities to participate in the bioeconomy. Through this project we have continued to gain a better understanding of the ways in which farmers, landowners, bioenergy users, and environmental entrepreneurs may approach the bioeconomy. In addition, as we improve our analytic toolkit, we can continue to refine our communication and the ways in which we can valuate the bioeconomy. Refining these tools allows us to dive deeper into conversations around plausible policies and drivers for future bioeconomy investment and engagement by stakeholders. By working with farmers and agricultural landowners to enable a sustainable bioeconomy business model, enhance their energy options, and recover resources from their waste streams, this project directly responds to the Bioenergy Technology Office’s (BETO) priorities of building a resilient energy economy. It addresses BETO’s focus on fostering the development and adoption of energy technologies that enable the conversion of waste to energy, efficient land use, and robust job creation. By establishing a technical assistance program that develops capabilities and practices in agricultural areas to implement a bioeconomy future, this program will develop an important linkage between technology being developed at U.S. Department of Energy national laboratories and the agricultural communities of the Midwest. This project focuses on farmers with lower productivity farmland. Because less productive lands create a more difficult revenue stream for conventional crops, these farmers may therefore be more open to alternative agricultural land management regimes. Consequently, the technical assistance program and the methodologies for targeting perennial bioenergy crop application on marginal land provide a distinct opportunity to engage with and invest in the bioeconomy in these economically stressed areas. Stakeholders in this project include farmers and landowners, local conservation organizations (NRCS, SWCS, etc.), universities, non-profit environmental and agricultural entities, farm consultants, environmental regulators, and industry, including the industries working on conversion technologies, anaerobic digestion, pyrolysis, and biochar generation, and the companies interested in trading or purchasing/supporting the valuation of ecosystem services (ES).

09 BIOMASS FUELS↗
DOE OSTI2025

A tri-level distribution locational marginal price-based demand response framework

Here, in this paper, we propose a tri-level, nested, two-stage price-based demand response (PBDR) framework that considers distribution locational marginal price (DLMP) as DR enabler between load-serving entities (LSE), demand response providers (DRPs), and customers in the day-ahead distribution market. It enables LSE and customer interactions by using multiple DRPs, positioned in-between, and independently optimizes their objectives. The problem is formulated using linear power flow with approximated power losses and its application in DLMP as DR pricing. The tri-level problem is solved using a nested reformulation & decomposition (R&D) method and tested on the real Indian-108 bus distribution system under various dynamic pricings. Further, the temporal–spatial variations in DLMPs are assessed using fairness criteria. Numerical analyses demonstrate that DLMP applications can effectively improve economic efficiency, and transparency in DR programs valuation with a favorable fairness margin. The results show that DLMP as DR pricing signal induces (0-2) % variation in DLMP for DR participation up to 10 %. Further, it gives over 90 % fairness over temporal–spatial variation for all the customers.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2025

Techno-Economic Analysis of Data-Driven and Transactive Approaches for Resilience Enhancement

As extreme weather events lead to more frequent power outages, understanding and enhancing grid resilience is critical to mitigating economic losses and non-energy impacts from service disruptions. Here, this study introduces a novel techno-economic analysis framework for evaluating resilience enhancement mechanisms. The framework combines grid response modeling with a co-simulation approach and valuation methodology to provide a comprehensive assessment. We apply this framework to a realistic case study of the Texas grid during Winter Storm Uri in February 2021. Two advanced resilience strategies are analyzed: a data-driven rolling outage mechanism and a transactive energy (TE) based allocation scheme. The rolling outage scheme selectively serves customers based on real-time curtailment needs, while the TE scheme allows customers to trade energy allocations according to their preferences. Our findings show that both the rolling outage and TE schemes significantly outperform conventional methods (i.e. controlled outages) by reducing the amount of energy not supplied to customers by 41% and 64%, respectively. These approaches also enhance flexibility and customer satisfaction, while improving energy utilization for greater resilience. Additionally, they maintain thermal comfort about 3.5 times better and substantially lower customer risk exposure. A key contribution of this study is addressing both utility and customer perspectives while considering both energy and non-energy impacts. The techno-economic analysis indicates that implementing these resilience enhancement strategies would incur an additional 1.1Bto1.6B in utility costs but has the potential to avoid 17.3Bto18B of customer losses as compared to existing solutions, thereby underscoring the value of investing in advanced resilience, as it provides significant societal benefits to customers.

42 ENGINEERING↗
DOE OSTI2025

Optimizing cost-effective and benchmarked industry standards to quantify nutrient bioextraction by seaweed

Interest in the utility of seaweed farms to mitigate coastal eutrophication, or nutrient loading, has grown commensurate with the recent rise of the farmed seaweed industry in the U.S. But economic valuation of this ecosystem service remains elusive in part because of challenges in quantifying this spatiotemporally variable biological process with reproducible and comparable metrics. Regulatory bodies that permit wastewater discharge or lease area for aquaculture farms require water quality testing and reporting of dissolved total nitrogen (N) in nearshore marine environments. These metrics must meet EPA standards for testing and reporting (e.g., Total Kjeldahl Nitrogen - TKN). However, these metrics are inherently highly variable over space and time in dynamic nearshore systems, and expensive to evaluate with sufficient breadth to constrain this variance, creating a critical bottleneck to direct quantification of farmed seaweed net uptake rates in situ.

59 BASIC BIOLOGICAL SCIENCES↗
DOE OSTI2025

Master Services Agreement - Flexible Feeder/Distribution System Support: Cooperative Research and Development (Final Report)

PGE will engage NREL on a broad range of projects related to the integration of distributed energy resources (DERs) into the utility's operations. This portfolio of work could include projects focused on DER adoption models, advanced distribution management system (ADMS) and distributed energy management system (DERMS) design, DER dispatch strategy development, and DER valuation framework development. Additional topics could include long-term energy planning, renewable energy, energy efficiency and demand-side management. As well as technology evaluations and design guidance for building retrofits and new construction projects, energy and energy infrastructure planning, policies, and markets (and their analysis), energy storage, energy security and resilience (including energy system-related cybersecurity), transportation and mobility, technology integration analysis. Additionally, other assistance as requested by PGE consistent with NREL’s expertise.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2025

Valuing the Future Electric Grid: A Bid-Based Approach

Energy storage resources (ESRs) and other zero marginal cost (ZMC) resources have unique characteristics that are not fully captured in today’s electricity planning and operations modeling tools. Because the modeling assumptions used in these tools are simplified approximations of how operations and investment decisions occur in the real-world, accurately representing cost and operational characteristics are key for determining how these resources impact price formation. Questions such as—Where should we build new transmission? Will a small modular reactor earn enough revenue to participate in the future electric grid? Is retrofitting a coal plant with carbon capture technology economically feasible?—all require accurate electricity prices, which aren’t available from today’s electricity planning and operations modeling tools. As an example, production cost models (PCMs) are heavily utilized tools that determine the cost and reliability of the electric system. However, as PCMs were developed to help thermal generators manage their fuel inventories, production cost modeling is largely based on fuel prices. Because ESRs do not incur fuel costs, they are often modeled as ZMC resources. In reality, ESRs incur opportunity costs as well as technology-specific (degradation) costs that are non-trivial to calculate but are important for price formation. In this research, we identify options to incorporate more realistic opportunity and degradation costs in ESR bidding algorithms. Expanding available bidding assumptions allows energy system modelers to develop more accurate economic valuations for ESRs, leading to more accurate price formation from leading energy system modeling tools.

24 POWER TRANSMISSION AND DISTRIBUTION↗
DOE OSTI2025

Empirical Indicators of Transmission Value in the Southeast United States

Concurrent differences in energy price between different parts of the electric grid are a key indicator of the value of additional transmission. In areas without a wholesale electricity market, such as the Southeast, an alternative indicator to price is the Federal Energy Regulatory Commission’s (FERC) system lambda data. This economic metric represents the minimized marginal production costs of thermal generators, including fuel and other variable operation and maintenance expenses. Balancing Authorities report a single system lambda for their entire balancing area. Most Southeastern lambdas exhibit sufficient price variation to support a transmission valuation analysis, although incomplete accounting of congestion costs or scarcity rents during peak load hours may underestimate the true value of transmission capacity. With transmission value defined as the annual average hourly absolute price difference between two regions and FERC’s system lambda data used as a price proxy, we find the following results in the Southeast region during 2012-2023 (reported in $\$2024$/MWh): Intra‐regional findings: Annual averages historically span $\$2$–$\$28$/MWh and average $\$12$/MWh in SERTP and span $\$4$–$\$19$/MWh and average $\$9$/MWh in FRCC, disregarding transmission value driven by anomalous data. The ranges of transmission value reported here are large, spanning an order of magnitude in some cases. Much of this variation is driven by year-to-year changes, with 2022 having a particularly high intra-regional transmission value due to elevated natural gas prices. Inter‐regional corridors: Annual average transmission values across three broader regions range from $\$6$ to $\$28$/MWh with a long-term average of $\$11$/MWh. Much of the transmission value is concentrated in a small portion of hours. Across all regions, severe weather—particularly polar vortex events in January 2018, February 2021, and December 2022—drives the largest price spreads. Seasonal patterns also emerge, with summer afternoons and fall mornings contributing consistently to transmission value, as for example between MISO and SOCO in 2023.

24 POWER TRANSMISSION AND DISTRIBUTION↗