Pumped-Storage Hydropower (PSH) in GEAP

Pumped-storage hydropower is a bidirectional storage technology: it injects electricity by releasing water downhill through turbines (generation mode) and draws electricity by pumping water uphill to a reservoir (pump mode). Within the GEAP , PSH is classified as a Non-FIT-Eligible RE technology (alongside geothermal and impounding hydro), but it is further distinguished by its own separate settlement mechanism first established by DC2024-09-0028 (September 2024).

Existing PSH in the Philippines includes the Kalayaan Pumped-Storage Plant (CBK, 736 MW, Laguna) and the San Roque reservoir complex. The GEAP-3 results added a pipeline of 6,350 MW of new PSH from five companies [source/regulations/dc2023-10-0029.md, §GEA-3 Results, 2025-06-10].

Why PSH is Different from Other Non-FIT Technologies

Under DC2023-10-0029 , geothermal and impounding hydro are measured and paid on an energy basis (PhP/kWh of actual energy delivered). PSH cannot be measured this way: its value lies in its capacity to absorb and release electricity on demand — the same megawatt of capacity may inject electricity in the morning and draw electricity in the afternoon.

DC2024-09-0028 (§Whereas) identified three reasons for a separate PSH framework [DC2024-09-0028, §Whereas, 2024-09-10]:

1. PSH can simultaneously inject and draw electricity (bidirectional operation)
2. PSH provides reliability services to the grid in addition to energy
3. PSH settlement must encompass Reserve Market revenues, not just Energy Market revenues

PSH Pricing: Capacity-Based (PhP/kW/h)

PSH bids in PhP/kW/h (per kilowatt of available capacity per hour) rather than PhP/kWh (per kilowatt-hour of energy delivered) [DC2024-09-0028, §1(c.2), 2024-09-10].

The Price Offer for PSH is the price per kW/h of Available Capacity, excluding pumping cost. Pumping cost is net of house load as measured by a separate metering facility dedicated to that purpose [DC2024-09-0028, §1(c.2), 2024-09-10].

PSH Available Capacity is defined as the capacity which can be utilized to inject and/or draw electricity and/or support grid flexibility. It:

• Excludes non-operational units
• Cannot exceed total Pmax of the facility
• Is based on nominated capacity in kW per trading interval — without regard to the mode of operation (injecting/drawing), the use (load following, peak shaving, load shifting), or the sub-market [DC2024-09-0028, §1(e), 2024-09-10]

The Non-FIT GET for PSH is the ERC-approved pay-as-bid capacity price in PhP/kW/h (vs. PhP/kWh for geo/hydro) [DC2024-09-0028, §1(b), 2024-09-10].

PSH Settlement Mechanism (§8, as inserted by DC2024-09-0028)

PSH Facilities of GEA Winning Bidders must register in both the WESM and the Reserve Market before the §8 settlement provisions take effect. Pending that, PSH settles under the existing WESM Price Determination Methodology.

Payment Formula

The Total GEA Amount (the guaranteed revenue) is based on Available Capacity:

Total GEA Amount (PSH) = Σ (ACᵢ × Non-FIT GET × dᵢ)

Where ACᵢ = absolute value of Available Capacity in kW for trading interval i; dᵢ = duration of the trading interval in hours (T/60, where T is in minutes — 5, 15, or 60) [DC2024-09-0028, §3, 2024-09-10].

This is guaranteed regardless of how PSH actually participates in the market.

Total Trading Amount: Includes Reserve Market

To determine whether a top-up or flowback is needed, the Total Trading Amount (TTA) for PSH includes both Energy and Reserve Market revenues:

TTA(PSH) = ETA(PSH) + RTA(PSH)

Where ETA = energy trading amount per WESM PDM; RTA = reserve trading amount per WESM PDM [DC2024-09-0028, §3, 2024-09-10].

This is the key structural difference from geothermal and impounding hydro, where only the Energy Trading Amount is used.

Collection and Flowback

When TTA(PSH) < Total GEA Amount(PSH) — shortfall, collect from market:

• Energy Market buyers: each buyer’s share proportional to their GESQ (gross energy settlement quantity) share
• System Operator (Reserve Market): share proportional to SRQ/TTQ (Scheduled Reserve Quantity / Total Transacted Quantity)

When TTA(PSH) > Total GEA Amount(PSH) — surplus, flow back to market:

• Same allocation proportions as collection

[DC2024-09-0028, §3 (§8.1–8.3), 2024-09-10]

The Market Operator handles payment and scheduling; the System Operator handles grid dispatch. The System Operator must include PSH capacities in its ancillary service provider roster as far as practicable [DC2024-09-0028, §4 (§9.2), 2024-09-10].

Revenue Guarantee (§10, as inserted by DC2024-09-0028)

For avoidance of doubt, regardless of what PSH actually earns in the Energy and Reserve markets, the revenues attributable to GEA Winning Bidders = Total GEA Amount only, based on Available Capacity and the corresponding Non-FIT GET. The WESM settlement mechanism is the collection/payment pipe, not the compensation standard [DC2024-09-0028, §5 (§10), 2024-09-10].

PSH Market Integration Rules (§9, as inserted by DC2024-09-0028)

DOE committed to issuing specific PSH integration rules covering:

1. Scheduling in both Reserve Market and Energy Market for full utilization
2. AS Capability Certification — PSH must undergo testing and receive certification from the System Operator or an accredited third-party testing entity
3. VRE linkage — PSH may use surplus VRE energy for pumping (excess solar/wind absorption)
4. Single PDS Charge — PSH is subjected to only one Power Delivery Service Charge regardless of whether injecting or drawing electricity. DOE and ERC to consider updating OATS Rules accordingly.
5. Pumping cost recovery — collected from WESM trading participants pro rata by GESQ [DC2024-09-0028, §4, 2024-09-10]

The single PDS Charge provision is economically significant: without it, PSH would pay a transmission charge both as a generator (injection) and as a load (drawing), which would dramatically reduce the economic viability of arbitrage and flexibility services.

GEA-3 Results (PSH)

PSH dominated GEA-3 by volume:

Total GEA-3 award: ~6,681 MW. PSH = 95% of all capacity awarded under GEA-3 [source/regulations/dc2023-10-0029.md, §GEA-3 Results, 2025-06-10].

Relationship to BESS and Other Storage Technologies

Under DC2023-04-0008, PSH is classified alongside BESS, Compressed Air Energy Storage (CAES), and Flywheel Energy Storage (FES) as an energy storage system (ESS) technology. See Battery Energy Storage Systems (BESS) and Energy Storage System Policy . PSH’s GEAP-specific settlement framework under DC2024-09-0028 is separate from and does not affect the general ESS policy.