Large-scale renewable energy sources, combined with advanced energy storage solutions, are critical for achieving a low-emission and climate-neutral power supply future. This paper evaluates the cost-effectiveness of repurposing an existing hydropower plant into a pumped storage facility. The designated strategy is particularly promising for power systems with hydroelectric plants and plans for rapid expansion of solar and wind power stations, especially in scenarios where significant electricity price volatility is anticipated. The developed power system simulation model integrates sub-models for various energy sources and incorporates the interconnections of the Baltic States with Sweden, Finland, and Poland, adhering to Nord Pool electricity market rules. The optimization methodology involves steps such as renewable energy capacity planning and electricity price forecasting. The proposed framework shows significant promise for energy systems focusing on the rapid expansion of solar and wind power, particularly in contexts where substantial electricity price volatility is anticipated. The conclusions underscore the economic viability of the project and aim to guide high-level energy transition planners and decision makers. The assessment is based on real-world data and utilizes custom software developed in Matlab.