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This paper presents a flexible and grid code complying operation of the matrix modular multilevel converter used in a variable speed drive pumped hydro storage power plants. A hardware-in-the-loop platform, where the control algorithm is deployed on the ABB PEC800 controller, is described and used to explore and create high fidelity results for the considered scenarios. The inaccessibility of converters fulfilling typical pumped hydro storage power plant ratings, require a thorough verification process through simulations, lowering the risks of potential damages to the high value equipment. The hardware-in-the-loop platform provides very accurate and very low risk simulation method and is used in this paper to demonstrate the achieved increase in flexibility of the pumped hydro storage power plant. Compliance with the grid code is demonstrated through simulations involving frequency deviations and voltage sags, which are included in the paper. Additionally, a detailed description of the control algorithm deployed on the hardware-in-the-loop achieving grid compliance and energy control of the matrix modular multilevel converter is provided.