Pumped hydro in China exceeds entire Australian coal power capacity.

Pumped hydro in China exceeds entire Australian coal power capacity.

Existing pumped hydro in China as at end of 2016 amounts to 26 Gigawatts compared to entire Australian installed coal capacity of 22 Gigawatts.

According to Qian Ganglian of China Renewable Energy Institute, at the end of 2016, the Hebei Fengning Pumped Storage Power Station (3,600MW) is the largest pumped storage power station under construction. The Guangdong Guangzhou Pumped Storage Power Station (2,400MW) and Guangdong Huizhou 1 Pumped Storage Power Station (2,400MW) respectively boast the largest installed capacity currently in operation. The station with the largest pump-turbine under construction is Guangdong Yangjiang Pumped Storage Power Station (400MW). The Zhejiang Xianju Pumped Storage Power Station (375MW) boasts the largest pump-turbine currently in operation. Zhejiang Changlongshan Pumped Storage Power Station has the highest head under construction with rated head of 710m, while the operational Shanxi Xilongchi Pumped Storage Power Station has a rated head of 624m).

While we vacillate over energy storage in Australia, China is surging ahead with construction of pumped hydro projects. Just counting pumped hydro projects under construction in 2016 their capacity exceeds the entire installed capacity of fossil fuel power stations in Australia.  As at end of 2016 there are 26 pumped hydro installations under construction and amounting to a capacity of 32 GW. In Australia fossil fuel generators account for 32 GW made up of Coal 22 GW, OCGT 6 GW, CCGT 2 GW, and other Gas 2GW

China has embraced the need of storage in the network and clearly recognises the value of pumped hydro in a network with increasing penetration of renewable generation. The value proposition for pumped hydro is partly related to the long transmission lines from the wind and solar energy rich areas of the north west to the high demand areas of central and east china.  In this respect the long transmission lines are reflective of Australia’s long thin network.  Pumped hydro acts to flatten the peaky output of both wind and solar and make better use of, or postpone or eliminate transmission augmentation. In this way it can be considered a transmission asset rather than a generation asset and recognition of the value of this role will need some market adjustment in Australia.

Being a largely state owned electricity grid makes it easier to make decisions beneficial to the grid at large. Pumped hydro can reduce the overall cost of generation/transmission and in the past when our electricity generation and distribution were government owned, pumped hydro projects such as Tumut 3, Wivenhoe and Sholhaven were built. Yet in a market such as the NEM its not clear how it can reward pumped pumped hydro (or any storage) adequately as a commercial enterprise.

We see some progress now with the announcement of the Snowy Hydro 2 pumped hydro project and yet the feasibility study is being done by political decree and it will be interesting to see how the numbers stack up. AEMO proposed changes to the 5 minute rule for bidding and settlement may also help the numbers stack up.

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