Abstract: Under the targets of peaking carbon emissions and carbon neutral, the proportion of fluctuating novel energy, represented by wind and solar, in power generation will increase rapidly and substantially. This will lead to an urgent requirement of flexible regulation resources. Pumped storage is the most mature energy storage mode at present. It has the advantage of fast regulation speed and large regulation capacity and can provide inertia support. However, under the two-part electricity price system implemented in China, the flexibility value provided by pumped storage plants has not been compensated reasonably. This leads to difficulties in cost recovery. In dealing with the cost recovery of pumped storage plants and guiding the development of flexible resources, it is of great significance to correctly evaluate the flexibility value provided by pumped storage, and then determine the corresponding pricing mechanism for ancillary service market. For this reason, we first analyzed electricity pricing mechanism of pumped storage plant in power market. We established models to study participation of pumped storage plant in biding and the risk-return of the plant in the ancillary service market. Our study focuses on the pricing mechanism of the pumped storage in ancillary service market and the cost recovery problem. We compared the benefit of the plant under this mechanism with that under the current two-part price system. The results show that the reasonable pricing mechanism for ancillary service market is helpful for the pumped storage plant to achieve cost-benefit recovery. The research results can provide support for flexible resources of energy storage to participate in biding and develop pricing strategy in ancillary service market.