The evolving policy regime for pumped storage hydroelectricity in China: A key support for low-carbon energy

• Highlights the role of pumped storage hydroelectricity in renewable energy integration.
• Examines the development of pumped storage hydroelectricity in China.
• Reviews the regulatory policies on pumped storage hydroelectricity in China.
• Analyzes the operation and pricing regime for pumped storage hydroelectricity in China.
• Makes policy recommendations for promoting pumped storage hydroelectricity in China.

As part of its energy transition strategy, China has set ambitious targets for increasing the contribution of renewable energy and, in particular, of wind power. However, the Chinese power sector has not undergone the necessary reforms to facilitate the integration and absorption of a larger share of variable renewable energy. This is evident from the difficulties in absorbing wind power from already commissioned wind farms and the resultant curtailment of wind power. Pumped storage hydroelectricity (PSH) is a flexible power source that can facilitate higher penetration levels of wind power as well as complement China’s growing nuclear power capacity. However, regulatory policy constraints have restricted the effective utilization of existing PSH capacity and discouraged investment in new PSH capacity. This paper examines these constraints and assesses the likely impact of new policies designed to address them. Finally, policy recommendations and concluding remarks are provided. This paper contributes to the literature on renewable energy integration from a new perspective. The lessons from China are relevant to other countries going through the energy transition.