Five 1.2-gigawatt pumped-hydro storage stations have received approval or commenced construction within less than 18 months. Individual project investments exceed 7.7 billion yuan, with total investments approaching 40 billion yuan.

The five projects correspond to five investment entities: the Ganzhou project is held jointly by Jiangxi Ganneng Co., Ltd. and China Electric Power Construction East China Academy; Three Gorges Group solely constructs the Xunwu project; China Huaneng International Power partners with three infrastructure state-owned enterprises to operate the Yongxin project; China General Nuclear Wind Power assumes the Leshan project; Jiangxi Provincial Investment Group manages the Suichuan project.

Energy Foresight has noted that the entities driving this capital are no longer the State Grid, which historically dominated the pumped-hydro sector. A cohort of power-generation state-owned enterprises, local state-owned enterprises, and infrastructure giants are now leading this round of investment.

This is not the vision statement of a policy document, but an investment roster being deployed on the ground in Jiangxi's mountainous regions. Why is Jiangxi rapidly launching these projects? Who is funding them? And what returns must they achieve?

According to data held by Energy Foresight, as of June 2025, Jiangxi Province's new energy installed capacity reached 35.83 gigawatts, with an average annual growth rate of 25% over the past five years, now accounting for over 50% of total provincial installed capacity.

In other words, wind and solar have become the province's primary power source. Yet simultaneously, installed capacity for pumped-hydro and battery storage accounts for only 1.62% and 1.59% of total capacity, respectively.

When wind and solar output surges, the grid lacks sufficient "buffer capacity" to absorb excess power; when output drops sharply, it lacks rapid-response adjustment measures. The chairman of State Grid Jiangxi Power Company, Yao Geping, stated bluntly in a public forum that "the power source's flexibility adjustment capacity lags behind the pace of green energy transition, undermining new energy absorption and utilization."

Adjustments to time-of-use tariff policies exposed the same problem. In June 2025, Jiangxi's Development and Reform Commission revised the time-of-use tariff mechanism, adding midday and ultra-low-valley periods from March through November to encourage commercial and industrial users to increase consumption during peak solar generation hours at midday. The policy interpretation explicitly noted that "rapid growth in new energy, particularly solar generation, easily creates the phenomenon of 'midday power glut and evening power shortage.'"

A 1.2-gigawatt pumped-hydro station can use low-cost electricity to pump water to the upper reservoir during off-peak hours and release water to generate power during peak demand. After the Ganzhou project comes online, it is projected to absorb 1.728 billion kilowatt-hours of off-peak electricity annually while providing 1.296 billion kilowatt-hours of peak power.

For Jiangxi's grid, these five projects function as five large-scale "power buffers," capable of providing minute-level adjustment response when wind and solar output fluctuates.

The Xunwu project is solely constructed by China Three Gorges Corporation. Three Gorges Group controls a giant cluster of hydropower stations on the Jinsha River and is the most seasoned player in China's pumped-hydro sector.

The Yongxin project has the most complex shareholder structure: China Huaneng International holds 53%, China Railway 10th Group holds 22%, China AnNeng holds 15%, and China Construction Third Bureau holds 10%.

This is China Huaneng Group's first pumped-hydro project. The pairing of "power generation group plus infrastructure state-owned enterprise" signals that the scale of civil engineering work now requires equity-level locking—the three infrastructure state-owned enterprises combined hold 47%, undertaking the main station construction, with construction payments and investment returns forming a closed loop.

The Suichuan and Leshan projects share a common feature: their original investment entities were both Jiangxi subsidiaries of China State Power Investment Corporation, but both withdrew for operational reasons and publicly selected new investment entities in November 2025. The provincial Development and Reform Commission's announcement explicitly stated that "the original investment entities have formally submitted letters confirming their withdrawal from investment and construction of the Leshan and Suichuan pumped-hydro projects."

Mid-project transfer of investment entities is uncommon in centibillion-yuan infrastructure projects. The Suichuan project ultimately passed to Jiangxi Provincial Investment Group, while the Leshan project went to China General Nuclear Wind Power.

The Ganzhou project is a 50-50 joint venture between Jiangxi Ganneng and China Electric Power Construction East China Academy, binding the design entity to the project's full lifecycle returns rather than simply collecting a design fee.

Jiangxi Ganneng is the provincial energy asset management and listed platform, while East China Academy is a leading force in hydropower surveying and design. This combination aims to align technical expertise and capital within a single economic structure.

Five combinations, five business logics. State-owned enterprises see strategic positioning and asset allocation; local state-owned enterprises seek stable cash flow; infrastructure corporations lock in engineering orders; design institutes pursue a share of operating revenue. None are merely "answering the call."

In March 2026, the National Development and Reform Commission and National Energy Administration issued the "Notice on Perfecting the Capacity Price Mechanism for Generation-Side Sources" (NDRC Price Document No. 2026-114), clarifying the direction of pumped-hydro tariff reform: existing stations maintain original policies, while new stations execute a "benchmark capacity price plus market revenue sharing" mechanism.

New projects no longer enjoy fixed tariffs; capacity prices cover only average costs, with profitability increasingly dependent on earnings from electricity spot market trading and ancillary service market transactions.

This means investors must not only build power stations—they must also know how to sell electricity. Market revenue is influenced by multiple factors including electricity supply-demand balance, peak-valley price spreads, and trading strategy, with substantially heightened uncertainty.

Jiangxi's electricity spot market is currently in pilot operation. By the time this cohort of projects comes online around 2030, market rules may be entirely different.

Two critical challenges loom ahead. First is transmission infrastructure. All five projects connect to the system at 500 kilovolts; transmission construction is invested and built by State Grid Jiangxi Power Company Limited.

The grid's connection willingness and construction schedule directly determine whether stations can synchronize with the network on schedule. A project may be approved and the station completed, yet power cannot be transmitted—a scenario hardly unfamiliar in the renewable energy sector.

Second is ecology and population resettlement. Pumped-hydro stations require construction of upper and lower reservoirs with large footprints and marked topographical impact.

All five projects are located in mountainous regions, involving ecological protection and population resettlement. The Ganzhou project is also incorporated into the Fengshan National Forest Park cultural tourism plan. Whether this "energy plus tourism" model can succeed has no mature precedent domestically.

Is pumped-hydro storage transitioning from "power grid's support infrastructure" to "market-tradeable asset"?

Historically, pumped-hydro stations were components of the grid system, calculated on system economics. Going forward, they must earn their returns in the electricity market, calculated on operational economics.

This requires investors to possess two competencies: first, engineering and construction capacity—delivering centibillion-yuan investments on schedule; second, market operations capacity—capturing the revenue they deserve in electricity trading, ancillary services, and capacity auctions.