Pumped storage hydropower helps China’s transition to renewable vitality by producing electrical energy when the solar is just not shining nor the wind blowing.
A pumped hydro facility pumps water uphill right into a reservoir when electrical energy demand and costs are low, often at night time, then releases it again downhill via generators to generate electrical energy when demand and costs are excessive.
The price of constructing pumped hydro is excessive, however a facility lasts for round 60 years, which means the complete life-cycle price of its energy is comparatively low.
This dependable methodology for vitality storage has witnessed large development in recent times, linked to the rolling out of China’s carbon emission objectives. Between 2015, the yr China adopted the Paris Settlement, and 2023, pumped hydro’s put in capability greater than doubled, from 22.8 gigawatts (GW) to 51 GW.
China desires to extend this to over 62 GW by 2025, and round 120 GW by 2030, in line with a plan launched by the Nationwide Vitality Administration (NEA) in 2021. There may be presently 167 GW of pumped hydro in planning or below development.
Nevertheless, our current research signifies that merely constructing extra pumped hydro may not be essentially the most cost-effective method to realize a zero-carbon energy system.
As a substitute, to make sure grid stability and greatest help the transition to carbon neutrality, current pumped hydro techniques must be optimised whereas the extra economical choice of battery storage is extensively deployed.
Pumped hydro versus batteries
China’s photo voltaic and wind put in capability has been rising dramatically, from 120 GW in 2012 to over 1,200 GW in 2024, NEA figures present.
This presents challenges to energy system reliability given the variable nature of these vitality sources. Applied sciences like pumped hydro and batteries, which retailer giant quantities of vitality, are important in balancing the grid and rising the ability system’s flexibility.
Although pumped hydro has an extended operational lifespan and a decrease price per kilowatt-hour, battery storage is extra appropriate for widespread utility on account of its sooner development time (lower than six months) in comparison with pumped hydro (4-5 years), and the actual fact it doesn’t want particular topography or water availability.
Pumped hydro is cost-effective and environment friendly for large-scale, long-duration storage, whereas batteries provide larger flexibility and faster response instances. The 2 applied sciences can due to this fact play complementary roles. As of the top of 2023, China had 86 GW of vitality storage in place, with pumped storage accounting for 59.3 per cent and battery storage 40.6 per cent.
As battery prices have been dropping considerably, there was a increase within the adoption of battery vitality storage, resulting in a major uptick in new tasks.
The falling value of batteries might go away pumped hydro behind
We needed to look at the position of pumped hydro in China’s energy system and contemplate its optimum capability in 2025 to 2050. To take action we used open-source software program known as GridPath to construct an in depth mannequin of China’s electrical energy system, together with hourly provincial masses, interprovincial transmission constraints, regional wind and photo voltaic profiles, and price projections for renewables and vitality storage.
Our findings point out the NEA’s goal for 120 GW of pumped hydro by 2030 might be enough to stability variable renewable sources. In the meantime, the price of batteries, particularly these with a four-hour capability, will proceed to say no and be aggressive.
The research due to this fact reveals that from 2025 to 2050, battery storage capability may skyrocket from 21 GW to 858 GW. This positions battery storage as a cheaper method to managing the variability of renewable-energy sources and assembly rising vitality calls for in the long run.
The trail ahead for pumped hydro in China
China has set formidable targets to broaden pumped hydro as a part of its technique to transition to a clear energy system, introducing numerous supportive insurance policies. For instance, a number of provinces, corresponding to Inside Mongolia, Beijing, and Shandong, have exempted pumped hydro storage from the water useful resource tax.
On the central authorities stage, the Nationwide Growth and Reform Fee final yr launched a hard and fast cost for pumped hydro operators primarily based on the capability of their installations. These “capability funds” are designed to assist operators obtain cheap returns.
Below the present insurance policies and objectives in China, optimising pumped hydro tasks has grow to be more and more essential. Our evaluation produced the next key findings and proposals that may present perception as China refines its pumped hydro technique.
Firstly, pumped hydro growth insurance policies and targets must be built-in within the general planning of China’s electrical energy system.
At present, vitality storage applied sciences together with pumped hydro aren’t adequately examined in energy system planning. Pumped hydro must be in contrast systematically with different storage choices, technology applied sciences, and transmission options to seek out the suitable scale and areas. If not, over-built or mismatched pumped hydro tasks may enhance energy system prices and client electrical energy payments.
Re-evaluating pricing can also be essential. The present pricing mechanism for pumped hydro, set by authorities primarily based on funding prices, wants refinement because it may probably result in price over-run and over-investment in tasks, which may then increase electrical energy costs unnecessarily. Introducing competitors via open bidding for pumped hydro tasks may help management mission prices and preserve electrical energy tariffs decrease.
Moreover, the wholesale electrical energy market mechanism wants additional enchancment. Though vitality storage is supposedly allowed to take part within the wholesale electrical energy market, securing income stays difficult, as the principles aren’t clear. Reforms may permit the value to be decided by provide and demand, and supply technology-neutral capability funds, in order that vitality storage can compete on a stage enjoying discipline with different applied sciences.
Lastly, encouraging interprovincial collaborations for pumped hydro tasks can improve the sharing of electrical energy or storage and enhance regional grid stability.
Policymakers ought to work with their counterparts in neighbouring provinces to create a cooperative framework and align rules. This can help the optimum deployment of pumped hydro and different system sources, leading to price financial savings for customers.
This text was initially printed on Dialogue Earth below a Artistic Commons licence.
