Design and modeling were performed for a prototype floating membrane reservoir system for closed-loop pumped storage hydropower (PSH) application. Typically, new construction of PSH requires high up-front development costs and long investment return periods. The proposed floating membrane reservoir system innovative technology would eliminate the need for highly disruptive and costly reservoir construction. Such modular systems may ultimately provide reliable, flexible power generation and can be replicated multiple times to increase energy storage capacity. This paper documents the modeling response analysis completed to refine and validate the design prior to the testing of the prototype. Computational fluid dynamics modeling efforts were completed to assess hydrostatic and hydrodynamic forces acting on the reservoir for several deployment and alignment arrangements. The system stability was evaluated using material stress and frequency response analysis. The conclusions, based on hydrodynamic and structural response modeling, support a decision to move forward with construction, deployment, and testing of the innovative prototype floating reservoir system.