Future electricity systems which plan to use large proportions of intermittent (e.g. wind, solar or tidal generation) or inflexible (e.g. nuclear, coal, etc.) electricity generation sources require an increasing scale-up of energy storage to match the supply with hourly, daily and seasonal electricity demand profiles. Evaluation of how to meet this scale of energy storage has predominantly been based on the deployment of a handful of technologies including batteries, Pumped Hydroelectricity Storage, Compressed Air Energy Storage and Power-to-Gas. However, for technical, confidentiality and data availability reasons the majority of such analyses have been unable to properly consider and have therefore neglected the potential of Pumped Heat Energy Storage, which has thus not been benchmarked or considered in a much detail relative to competitive solutions. This paper presents an economic analysis of a Pumped Heat Energy Storage system using data obtained during the development of the world's first grid-scale demonstrator project. A Pumped Heat Energy Storage system stores electricity in the form of thermal energy using a proprietary reversible heat pump (engine) by compressing and expanding gas. Two thermal storage tanks are used to store heat at the temperature of the hot and cold gas. Using the Levelised Cost of Storage method, the cost of stored electricity of a demonstration plant proved to be between 2.7 and 5.0 is an element of ct/kW h, depending on the assumptions considered. The Levelised Cost of Storage of Pumped Heat Energy Storage was then compared to other energy storage technologies at 100 MW and 400 MW h scales. The results show that Pumped Heat Energy Storage is cost-competitive with Compressed Air Energy Storage systems and may be even cost-competitive with Pumped Hydroelectricity Storage with the additional advantage of full flexibility for location. As with all other technologies, the Levelised Cost of Storage proved strongly dependent on the number of storage cycles per year. The low specific cost per storage capacity of Pumped Heat Energy Storage indicated that the technology could also be a valid option for long-term storage, even though it was designed for short-term operation. Based on the resulting Levelised Cost of Storage, Pumped Heat Energy Storage should be considered a cost-effective solution for electricity storage. However, the analysis did highlight that the Levelised Cost of Storage of a Pumped Heat Energy Storage system is sensitive to assumptions on capital expenditure and round trip efficiencies, emphasising a need for further empirical evidence at grid-scale and detailed cost analysis.