Customer-sited Grid Integrated Energy Storage Systems Break the Ice, Bringing a Boost to China's Energy Storage Industry



In recent years, Jiangsu Grid has experienced an increasing expansion in the gap between peak and off-peak loads, creating an urgent need for new methods to balance generation and demand.  There are two reasons for the problem. First, through the support of national and local subsidy policies, Jiangsu province’s distributed PV has seen rapid development. The intermittency and instability inherent with distributed PV power stations has caused Jiangsu Grid significant difficulty balancing demand and generation. Second, due to the increased need for electricity caused by rapid economic development, power load cycles inevitably face growing in the gaps between peak and off-peak grid loads. Although TOU policies have played an important role in load shifting, they cannot restrain the ever-widening peak and off-peak load gap.

With customer-sited energy storage beginning to take shape and its potential increasing, it has become a reliable source of generation and demand balance for the grid. According to State Grid of Jiangsu statistics, as of October 2016, Jiangsu province possessed operational and potential energy storage projects at a total capacity of 886,000 MWh.  Of this total, 16,580 MWh of storage had already been constructed, 154,250 MWh was under construction, and 715,170 MWh of storage was in negotiation. As energy storage battery costs continue to drop, the potential for future energy storage markets continues to grow.  How customer-sited storage will be used, how control of systems will be coordinated, and how the technology can be used in balancing generation and demand are all unavoidable questions that grid companies must face.

Energy storage systems possess advantages such as a quick response speed, precise load control, a short construction period, non-consumption of fossil fuels, no emissions, and other features.  At the same time, they encourage the use of renewable resources and regional T&D deferral for grid construction.  Therefore, the use of customer-sited grid integrated energy storage controlled by a unified dispatch center is a worthy method of balancing the grid.

Key Points

Recently, State Grid Jiangsu released the Customer-sited Energy Storage System Grid Integration Management Regulations (hereafter known as Regulations).  The Regulations are focused directly on the development of Jiangsu province’s customer-sited energy storage, with support for such systems as the central goal.  The Regulations focus on ensuring safety, increasing efficiency, and standardizing the division of responsibility for workers as well as the work procedure.  Below are some of the notable characteristics of the Regulations:

1.       Categorical management based on capacity

The Regulations divides customer-side energy storage in two categories.  The first category includes customer-side storage systems rated at 6MW or less connecting to the grid at 10 KV or less. The second category includes customer-side storage systems rated above 6MW connecting at 10KV, or any system connecting at 35 KV.  Equipment of both categories is required to undergo inspection by the power company before installation, and metering equipment and information collection systems must also be installed. Finally, a dispatch agreement must be created with the grid company. The difference between the two categories is that for the first category, in which capacity is rather small, a “stand back and observe” model is used, in which city/district companies will facilitate supervision of the system. Items to be monitored include the voltage, current, active power, inactive power, charge capacity, and discharge capacity of the customer-sited energy storage system.  For the second category, in which capacity is rather large, a different model of combined monitoring and control is used. City/county dispatch centers are responsible for operation and management of the energy storage equipment.

2.       Safety standards as the first step for grid integration

Customer-side energy storage systems are largely battery systems, with DC input and output, and transforming to DC/AC through the use of a converter.  Such a system is certain to cause harmonics that will affect power quality, while misuse of battery systems carries the risk of fires or explosions. To ensure the safety of the grid, the Regulations stipulate: “Connections to the grid must meet national power quality standards, and engineering design and construction must satisfy such standards as the Technology Regulation for Energy Storage Systems Connecting to the Power Grid (Q/GDW564-2010) and Battery Energy Storage Power Station Design Standards (Q/GDW11265-2014). In other words, customer-side energy storage has a fair chance to participate in the grid as long as systems meet the standards already in place for grid technology

3.       Processes, work distribution, and time limits are clearly specified

The Regulations divide grid integration of customer-sited energy storage into 5 processes: application and site surveying, engineering and construction, grid integration inspection and debugging, meter installation, and contract signing. Tasks in each stage are designated to specific units or persons. City/district company business applications managers are responsible for the acceptance of new applications, and a development and planning department are responsible for approval of grid integration plans.  Accounts managers are tasked with inspection of engineering designs for energy storage systems, with customers choosing appropriate construction companies. Accounts managers and dispatch centers of prefectural and municipal companies are responsible for acceptance and debugging of projects of varying capacity, and can provide one-time suggestions on the acceptance and verification of new grid integration proposals. City/district companies also designate a specific department to the installation of metering and data collection systems.  The Regulations defines a detailed timeframe for the completion of each stage to combat delays or procrastination.


State Grid Jiangsu’s Customer-sited Energy Storage System Grid Integration Management Regulations stands as China’s first regulation for customer-sited grid integration.  The policy is certain to facilitate new large-scale grid integration of customer-sited energy storage equipment, alleviating some of the demand pressure on the grid, and guaranteeing that energy storage customers will receive reasonable benefits—a win-win situation for both sides.