China has established itself as the leading country for the deployment of wind and solar power capacity, with almost half of the world's total for both technologies installed in the country. As part of its central planning process, China has determined that more PSH is required and there has been significant recent growth: at time of writing, capacity is already at 53 GW, and the pipeline of projects in construction appears sufficient to meet the targets of 63 GW by 2025 and 120 GW by 2030. This bodes well for the longer-term target of 305 GW by 2035.

These targets are set out in “The Mid- and Long-Term Development Planning for PSH (2021-2035)” document published by China's National Energy Administration in 2021. There is an accompanying list of 110 projects totalling 136 GW and if a project is not listed, it will not be taken forward, which helps with efficient development management.

China's “PSH-plus” model approach sees planning for large renewable energy zones or corridors being matched with the development of PSH capacity. By bringing these resources together in tandem, where they are sometimes placed in geographical proximity, renewable generation can used more effectively and the common grid infrastructure maintained more efficiently.

In using this supportive policy, many in the sector have been attracted to invest in PSH. While the assets are dispatched by the grid companies, ownership remains with various entities in the power sector, primarily state-owned enterprises but with an increasing diversity of organisations.

In order to secure the finance and make a return on their investments, owners are remunerated by the grid companies under a “two-part tariff”. A price is fixed by government authorities and is paid to reflect the PSH's contribution to peak demand and provision of any ancillary services. A floating element reflects the value of charging the PSH when power is cheap and generating when it is expensive. In areas where there is a spot market, the prices of such buying and selling are set on that market. In other areas, pumping is charged at 75% of the bench mark price of coal-fired generation, while discharging is paid 100% of that benchmark. Operators can additionally participate in ancillary service mechanisms or markets.  

Through a clear planning process and suitable reward for investment, China has put in place a complete system for bringing forward the PSH capacity it has determined is necessary. As such it has established itself as the leader in deploying PSH and is set to stay ahead of the rest for the foreseeable future.

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