The Shift from “Planned Power” to “Market Power”
Pump Storage Hydropower Station Makes Its Market Transaction Debut
On October 13, the Guangdong Meizhou Pump Storage Hydropower Station (hereafter referred to as “Meizhou Station”) officially entered the electricity spot market, trading its entire generation capacity for the first time. This move marks a significant change in how China’s pump storage hydropower stations operate, as they transition from traditional revenue models to actively participating in market transactions, paving the way for a new approach to market-driven operations in the evolving power system.
After entering the market, Meizhou Station now autonomously submits its planned water pumping and power generation capabilities, along with the corresponding pricing, to the transaction market each day. The electricity market experiences peak pricing during high demand and lower pricing during off-peak times. When the price spread meets Meizhou Station’s expectations, it can purchase electricity at lower prices to pump water and sell electricity at higher prices, thereby contributing to load balancing in the power system while reaping financial benefits. “To facilitate our entry into the power market, we’ve optimized our existing technical systems to ensure that Meizhou Station can participate in trades quickly and reliably. This new ‘quantity reporting and quoting’ model allows pump storage stations to compete alongside other market entities and illustrates their regulatory value within the power system,” explained Cai Qiuna, a senior manager at the Guangdong Power Grid’s Spot Market Management Department.
Currently, the growth of renewable energy sources in China demands more flexible and precise regulatory measures from pump storage facilities. In the first half of 2024, seven pump storage stations in southern China recorded historical highs in power generation and operation frequencies, rising nearly 20% compared to the previous year.
Functioning as the “super battery” of the power grid, pump storage stations are positioning themselves as “green energy banks” in the market, actively absorbing renewable energy while ensuring stable electricity supply. Under this new model, all revenue from the electricity generated by pump storage facilities comes from market transactions, transforming the previously passive “planned power” into actively competing “market power.”
“Since joining the market, Meizhou Station has increased its operational frequency to an average of 5 to 6 starts per unit each day—up to twice as much as before entering the market. During pumping operations, the station’s installed capacity of 1.2 million kilowatts can reliably support 40 large-scale photovoltaic systems. When generating power, the daily output of 4.5 million kilowatt-hours can meet the electricity needs of 750,000 residential users, promoting the consumption of green energy more effectively,” said Huang Xiaojia, manager of the Central Control Center at Southern Power Storage Corporation.
Looking ahead, it is estimated that by 2030, China’s total installed capacity for pump storage will reach 120 million kilowatts—more than double the current capacity. Encouraging pump storage participation in electricity market transactions will continuously enhance the adjustment capabilities of the new power system, providing valuable experience for the market-oriented management of energy storage in a unified national power market.
