POWERCHINA Ltd(SH:601669) Xin Lang Cai Jing·2025-12-02 09:49Core Viewpoint - China Power Construction Group (China Power) is facing allegations of "cutting corners" in the construction of the Yongan pumped storage power station, raising significant safety concerns [1] Group 1: Incident Overview - The Yongan pumped storage power station's lower reservoir construction has been reported to have serious issues related to quality and safety [1] - China Power has established an investigation team to thoroughly investigate and address the allegations [1] Group 2: Industry Context - The rapid growth of pumped storage power stations since 2022 is attributed to their proven effectiveness as large-scale, long-duration energy storage solutions, especially as renewable energy penetration increases [2] - The static investment level for a 1 GW pumped storage power station is estimated at 5.77 billion yuan [4] - The development of pumped storage stations is expected to enhance local infrastructure and support rural revitalization [4] Group 3: Market Dominance - China Power dominates the pumped storage market, handling 90% of the design and 78% of the construction tasks for these projects [6] - The company has a historical advantage in this sector, being formed from the merger of several key state-owned enterprises involved in hydropower construction [7] - In 2022, China Power's revenue from pumped storage operations reached 21.44 billion yuan, a nearly 35% increase year-on-year [8] Group 4: Regulatory Concerns - The incident highlights potential regulatory gaps in construction quality supervision, particularly regarding the relationships between design, construction, and supervision entities [14] - It is common for design, construction, and supervision units to be affiliated within China Power, raising concerns about conflicts of interest [15][16]