A scheme for bulk electricity storage known as Pumped Thermal Energy Storage (PTES) is described. PTES uses a heat pump during the charging phase to create a hot and a cold storage space. During discharge, these thermal stores are depleted using a heat engine. This version of PTES uses packed beds (or pebble beds) as the energy store. A relatively new design feature which involves segmenting the packed beds is introduced. Various thermodynamic benefits can be achieved by reservoir segmentation, such as reduced pressure losses and increased energy stored per cycle. This report includes modelling of the storage phases, and it is found that segmentation can reduce the thermal equilibration losses that occur. A simple economic model of the PTES system is introduced so that multi-objective optimisation of efficiency and capital costs can be carried out. Sensitivity to the economic factors is briefly explored. The results show that cold packed beds in particular benefit from being segmented.