Ex-Post Analysis of the Tianhuangping Pumped Hydro Storage Project

The Tianhuangping pumped hydro storage plant is one of the largest globally and has been operational for over 20 years. It is in the East China region, supplying electricity to Shanghai, Zhejiang, Jiangsu, and Anhui. This paper is an ex-post benefit-cost analysis of the Tianhuangping pumped hydro storage project. It estimates the project's net cash flows. It uses it to evaluate the financial impact of the project from the owner's perspective. The analysis projected that the project yielded $34 million in NPV terms to the project owners. From an economic perspective, the Tianhuangping pumped hydro storage was combined with a coal plant with a capacity sufficient to provide the energy required to pump water into the upper reservoir of the Tianhuangping plant during the off-peak demand period. This pumped storage and coal plant integrated system was compared with HFO and natural gas turbines to estimate the most cost-effective option of providing peak demand power. With the social carbon cost considered, the Tianhuangping pumped hydro storage and coal integrated system was the most cost effective option. It was estimated to provide peak energy at $0.15/kWh instead of the natural gas-fired turbines and HFO-fired turbines estimated to provide peak energy at $0.16/kWh and $0.17/kWh, respectively.