In the mountainous region of Daixian County, north China's Shanxi Province, a pumped-storage power station with a total installed capacity of 1.4 million kilowatts is set to begin construction in June.

Li Zhitao, deputy general manager of Shanxi Daixian Zhenghuaneng Energy Development Co., Ltd., was busy working with his colleagues to finalize preparations for the commencement of the project, which involves an investment of 10.99 billion yuan (about 1.53 billion U.S. dollars).

"This project primarily serves new energy generation in northern Shanxi. The construction will take 72 months. Once completed, it will have an annual full-capacity power generation of 2.98 billion kilowatt-hours," said Li.

As of the end of last year, the total installed capacity of new and clean energy in the three cities in northern Shanxi had reached nearly 31 million kilowatts.

To cope with the instability of wind and solar power output, a pumped-storage power station is needed to regulate and ensure the safe operation of the power grid, as well as reducing the waste of unused renewable energy.

Cai Pin, a renowned Chinese expert in hydropower industry, said that pumped-storage projects enjoy numerous advantages, including a long service life, mature technology, large-scale capacity, and low costs, making them the most economical energy storage option available.

China is actively striving to achieve "carbon peak" and build a new power system centered around renewable energy. According to the latest data released by the National Energy Administration, by the end of 2024, the country's installed solar power capacity is approximately 890 million kilowatts, a year-on-year increase of 45.2 percent. Meanwhile, wind power capacity reached about 520 million kilowatts during the same period, marking an 18-percent increase.

Due to the demand for new energy installations, pumped-storage power stations have become a new investment hotspot in China's power industry.

According to official data, by the end of 2024, China's installed pumped-storage capacity had exceeded 58 million kilowatts, with the industry showing an overall positive development trend.

"Since 2021, the annual power generation growth rate of the State Grid's pumped-storage power stations has remained above 18 percent, with an average of over 28 billion kilowatt-hours of new energy accommodated each year," said Le Zhenchun with the State Grid.

China's pumped-storage installed capacity remains the largest in the world, but industry experts said relying solely on the State Grid for construction will no longer be sufficient to meet the rapidly growing market demand. In response, the Chinese government has introduced policies to accelerate the development of pumped-storage power stations.

In addition to Shanxi's plans to construct 10 such stations, other provinces across China have also introduced plans to accelerate the layout of pumped-storage power stations.

A national medium- and long-term plan for the industry has indicated that 340 key projects with a total planned installed capacity of approximately 420 million kilowatts will be constructed by 2035, while the total operational capacity is expected to reach around 120 million kilowatts by 2030.

As China's new energy installations expand into deserts and seas, pumped-storage projects will also extend into these areas.

"With the support of innovations such as distributed pumped storage and seawater-based pumped storage, these projects will play a crucial role in helping China achieve its 'dual carbon' goals," Cai said.