CNESA’s 2018 Year in Energy Storage

Since 2010, the China Energy Storage Alliance has maintained a global energy storage project database, tracked global energy storage market changes, and continuously supported energy storage industry development in China.  During these nine years, CNESA has traced the rise of energy storage markets in the United States, Germany, the United Kingdom, Australia, South Korea, and China. While mature energy markets in other countries have seen energy storage projects enjoying installation subsidies, tax reduction and exemption policies, and other renewable energy related policy benefits, China’s energy storage market has had a rocky road to development, and struggled to define itself.

In 2018, China’s energy storage market took a new turn, with grid-side energy storage capacity experiencing a tremendous increase.  CNESA believes that this development marks a critical transition period for energy storage in China, particularly in light of the increasing presence of renewables and burgeoning electricity market reforms.  In the next 1-2 years, energy storage will play an important role in the restructuring of the energy market.  Energy storage currently stands at a crossroads, and determining the direction in which it moves in will require careful consideration and decisionmaking from all industry members.

Global Energy Storage Development Speeds Up, China Enters the “GW/GWh” Era

In 2018, grid-side energy storage saw a sudden and unexpected massive expansion in capacity which thrust China’s energy storage market into the “GW/GWh” era.  According to statistics from the China Energy Storage Alliance Project Database, China’s accumulated operational energy storage capacity for the year 2018 totaled 1018.5MW/2912.3MWh, an increase 2.6 times that of the total accumulated capacity of 2017.  As of the 2018 year’s end, the global accumulated electrochemical energy storage capacity totaled 4868.3MW/10739.2MWh, an increase of 65% in MWh capacity from the previous year, a marked increase in development speed.  Of note is the rise of new energy storage markets in 2018 that have helped promote rapid global growth of storage around the world. Aside from China, South Korea has seen tremendous growth and become an energy storage leader in part due to government policy support.  In light of decreasing energy storage costs and increasing customer energy prices, the behind-the-meter market in Canada’s Ontario province also attracted business from energy storage developers from the United States, China, and other foreign countries.

Diagram 1: China’s total accumulated operational electrochemical energy storage project capacity through 2018 (MW)

Diagram 1: China’s total accumulated operational electrochemical energy storage project capacity through 2018 (MW)

Grid-side Energy Storage Projects Take Off, Carrying Energy Storage into Large-Scale Applications

“Grid-side energy storage” was the industry hot topic in China for 2018.  According to statistics from the CNESA Energy Storage Project Tracking Database, China’s newly operational grid-side energy storage capacity (not including planned, under construction, or undergoing initial debugging) totaled 206.8MW, or 36% of all newly deployed energy storage in 2018, making grid-side storage the year’s leading application category in terms of new capacity.

The sudden leap in grid-side energy storage capacity was in many ways both expected and unexpected.  Though Jiangsu province’s call for bids for 100MW of storage projects was caused by the unexpected retirement of a group of generators and the subsequent grid pressure caused by summertime peaks, grid company enthusiasm for energy storage was not a surprise.  Since the start of the Zhangbei Wind, Solar, Energy Storage, and Transmission Project in 2011, grid companies have never ceased interest in exploring energy storage technologies, applications, and models.  A few years ago, one expert predicted, “when energy storage prices dip below 1500 RMB/kWh, we will see large-scale applications in the grid.”  With the proliferation of electric vehicles having caused the price of battery cells to drop significantly, grid-side energy storage has now reached this turning point.

In 2018, the grid companies of Jiangsu, Henan, Hunan, Gansu, and Zhejiang provinces each released their own large-scale energy storage procurement targets. At CNESA’s Grid-Side Energy Storage Project Forum held in Nanjing this past November, many provincial grid companies expressed desires to construct grid-side energy storage projects.  CNESA’s preliminary statistics show that the total capacity of grid-side energy storage projects currently planned/under construction surpasses 1407.3MWh.  Support from China State Grid leadership has given direction to grid-side storage development, and it is likely that in the next 1-2 years grid-side energy storage will see breakthrough development.

Rapid Development of Grid-Side Applications Will Influence the Entire Energy Storage Industry

Because there are currently no defined parameters for what type of energy storage system is needed for the grid, nor specialized energy storage products for the grid, traditional (i.e. electric vehicle) testing and evaluation methods cannot objectively reflect what battery performance parameters the electricity system requires.  Following the launch of the first grid-side storage system and the completion of necessary testing and evaluation methods, future project tenders will be able to include more accurate technological thresholds and requirements, thereby helping to continually improve the performance of energy storage systems with each new project.

China’s grid-side project investors are largely third-party entities (companies within the grid system) who manage the project’s entire construction and operations. Systems integrators and battery manufacturers provide the battery system.  Grid companies supply the land and sign the agreement with the third party.  The agreement will specify what type of payment method will be used, whether a fixed payment plan or profit-sharing model.  As the operator, the grid has already begun to take notice of energy storage’s multiple values. Such attention will help push the improvement of system management and price mechanisms for energy storage.

Because each country’s power market is structured differently and the amount of freedom in each market varies, there is an array of opinions over how much capital in energy storage a grid company should own.  China is currently undertaking the first steps in power market reforms.  Growth in grid-side energy storage projects will create experiences that will help define storage project ownership, define the limits of each players’ role in the market, ensure healthy competition during the market transition period, and help energy storage to thrive within an open power market.

Competition Increases in Thermal Power Frequency Regulation, though Many Challenges Remain

As one of the earliest storage applications to develop a clear business model, worldwide, frequency regulation has not seen significant growth in new applications. In many ways, the current market has already neared its limit.  The experience of the Tesla 100MW energy storage project in South Australia shows that only players who enter the market early can make a profit, while later entrants can only search for new markets to replicate the model.

In comparison to the international market, frequency regulation in China offers both opportunities and challenges.

In the context of ongoing electricity reforms, opportunities arise in regions such as northeast china (Dongbei), Fujian, Gansu, Xinjiang, Shanxi, Ningxia, Beijing-Tianjin-Tangshan, Guangdong, Anhui, Henan, north China (Huabei), east China (Huadong), and northwest china (Xibei), where decisionmakers have shown support for ancillary service markets by encouraging power generation companies, power sellers, power customers, and independent ancillary services providers to invest in the construction of energy storage infrastructure to participate in frequency regulation ancillary services.  In practice, aside from the Shanxi mechanism—which compensates based on the “mileage” and effectiveness of frequency regulation, a model that provides major support for storage—Guangdong is also experimenting with new market regulation designs for frequency regulation, borrowing from compensation mechanisms used in north China (Huabei) and PJM market regulations in the United States, retiring the earlier model of settlement based on quantity of electricity, and adopting a new model based on the duration and quality of frequency adjustment. Such a model will provide major opportunities for energy storage to participate in Guangdong’s frequency regulation market.  Following trial runs of the new rules which began at the end of 2017, power generation companies in Guangdong have signed six contracts for energy storage frequency regulation projects at thermal power plants.

Challenges arise in two major areas.  First, policy support has encouraged many domestic companies to enter the frequency regulation market. Aside from companies such as Ray Power and CLOU, numerous other systems integrators and project developers have been entering the frequency regulation market, including Sunwoda, Hyperstrong, Zhizhong, Beijing Clean Energy Group, and others.  With so many players in a market that has already neared its limit, it is not surprising that competition has been extraordinarily fierce.  In 2018, the proportion of energy storage operators to owners saw continual decrease. In a space where profits are limited, price battles have become increasingly intense. A second challenge is that although numerous thermal power plant storage projects have been announced, truly operational projects are few, in part due to insufficient fire safety standards, a concern which looms over every frequency regulation project.

In 2018, research and testing in battery heat management, fire extinguishment materials and equipment, fire safety standards, and other safety management measures all became areas of increased focus.  CNESA member standardization groups have contributed to standards such as the “Electrochemical Energy Storage System Evaluation Regulations” and “Energy Storage System Fire Alarm and Fire Prevention Systems,” both of which are currently in the working phase and seeking comments.  We hope that the release of these standards will contribute to increased deployment of new systems.

Finally, as the “ancillary services market” works through its current transition period, early stage competitive price models attract fierce price competition, frequency regulation compensation prices continue to drop, and investment risks for frequency regulation energy storage projects continue to rise.  In contrast, mechanisms for energy storage in peak shaving and for backup power applications have yet to be clearly defined.  While northeast China (Dongbei), Xinjiang, Fujian, Gansu, and Anhui have announced needs for peak shaving capacity supplied by independent energy storage market entities, Jiangsu has also announced that energy storage may contribute to high levels of peak shaving and has drafted regulations for compensation. However, dispatch strategies and technological requirements for grid-connected independent energy storage stations, standards for connecting to the grid, pricing for battery charging and discharging, and settlement strategies are all still lacking proper rules and regulations.  In the short term, such issues are an obstacle to energy storage value stacking.

If Penalties and Rewards are Clearly Defined, What Additional Assistance Does Renewable Energy and Storage Need?

Although the development of renewable energy is an important factor contributing to the use of energy storage in the electricity system, in China the two still do not have a close enough relationship.  Examples of renewable energy stations coupled with energy storage are few in China.  Aside from a few individual wind-plus-storage demonstration projects, the majority are projects installed at large-scale solar PV stations with high FIT rates using storage to manage curtailment. In 2018, with the release of the “Renewable Energy Fair Price Policy,” the installation of energy storage for curtailment has lost its advantage.  Future efforts must explore other ways in which energy storage can add value to renewable energy stations.

Internationally, as renewables continue to penetrate grids at increasingly higher levels, grid operators have looked to differentiate the way that renewable generators of varying performance are penalized and compensated.  Generators that are more stable or “trustworthy” earn higher grid purchase prices, or can have their “penalties” minimized.

The recently updated “Two Regulations” for the Northwest (Xibei) region follows this same line of thinking.  Though simply lowering the risk of penalties does not increase motivation for renewable energy stations to install storage, in the future, as the ancillary services market matures, policymakers are certain to consider the advantage of renewable energy stations combined with storage and encourage such installations to participate in market transactions and ancillary services.  Such measures would help highlight the many benefits of storage combined with renewable energy.

Foreign Behind-the-Meter Storage Market Thrives While the Domestic Market Slows

The behind-the-meter market outside of China continued to thrive throughout 2018.  Aside from the United States, Germany, and Australia, emerging behind-the-meter markets in Canada’s Ontario province, South Korea, and Italy all became battlegrounds for new competition between global storage vendors. The behind-the-meter market in the United Kingdom also attracted attention, and is predicted to experience an explosion in growth in 2019.

In contrast to the growth in behind-the-meter storage internationally, China’s behind-the-meter market, which once led the industry’s development, slowed in 2018.

One reason for this is the implementation of new policies which have narrowed the gap in price differences between peak and off-peak periods in many regions.  In Beijing for example, general industrial-commercial customers are permitted to utilize the two-part tariff system, which allows electricity bills to be paid either (a), according to transformer capacity or maximum demand, or (b), according to their actual power usage.  As a result of this plan, price differences between peak and off-peak power periods shrank significantly, making it difficult to sustain a profit using energy storage for energy arbitrage.

Another issue has been the concern of business owners and fire departments towards the use of energy storage systems in commercial buildings, particularly safety issues caused by the installation of energy storage systems in underground parking garages and the lack of proper fire safety standards.  Such issues have caused many commercial storage projects to be delayed indefinitely.

Policy updates and market adjustments have touched a nerve with energy storage stakeholders, and investment in large-scale applications at current technology prices carries a certain amount of risk.  Yet from the viewpoint of project developers, energy storage is just one technology in an entire range of energy services.  An open power market still promises many potential benefits, and customers are the key to increasing the value of energy services. In the future, the ability to provide a full range of energy services will be critical to maintaining customer confidence. Though policies tend to focus on the big picture, planning and design must begin by considering the way in which energy is changing and the market is opening. Doing so will avoid taking actions that support one area while inhibiting another.  In the future, regional government agencies must put additional effort into the creation of environmentally minded power price mechanisms that push for reasonable peak and off-peak prices which reflect actual power supply-and-demand, and encourage customers to use power in a rational and realistic way.

Looking Ahead

2018 was a year of both excitement and disappointment for energy storage.  The sudden leap in grid-side storage capacity infused new vigor into the industry, providing not only market growth but also driving the costs of energy storage technology down and pushing technologies towards applications that are more closely integrated with the grid.  The advancements also helped bring China’s energy storage applications into the global spotlight.  At the same time, the slow development of a mature market mechanism and policy support continues to lag behind the pace in which new storage applications are appearing. Ancillary services market regulations and long-term mechanisms are unclear, a lack of a proper behind-the-meter price mechanism has created increased investment risk, and many other issues have appeared or persist.  The industry’s short-term benefits and long-term existence are still in urgent need of adjustment and resolution.

Despite just ten years of development, the rapid growth of energy storage is visible to all.  Yet a mature storage industry cannot occur overnight.  The support of renewable energy and the new generation of power systems is the natural purpose of energy storage, and the basis of its rapid development.  With the encouragement of proper policies and the hard work of a variety of government bodies, we believe that energy storage can break through from its current challenges to become a driving force in the advancement of China’s energy system.

Author: Liu Wei, CNESA Secretary General

Translation: George Dudley

CNESA Global Energy Storage Market Analysis – 2018.Q4 (Summary)

1.       The Global Market

According to China Energy Storage Alliance Project Tracking Database statistics, as of the end of December 2018, global operational energy storage projects totaled 180.9GW, an increase of 3% compared to the same period the previous year.  Pumped hydro made up the largest portion of this capacity at 170.7GW, an increase of 1.0% from the same period the previous year. Electrochemical energy storage and molten salt energy storage followed at 6.5GW and 2.8GW, an increase of 121% and 8% compared to the same period the previous year, respectively.

Global Operational Electrochemical Energy Storage Project Distribution

Data source: CNESA Project Database, 2019

Data source: CNESA Project Database, 2019

In 2018, global newly operational electrochemical energy storage projects totaled 5.5GW, of which electrochemical energy storage comprised the largest portion, at 3.5GW, an increase of 288% compared to the previous year.

In the 4th quarter of 2018 (October to December), global newly added electrochemical energy storage projects totaled 1.55GW, an increase of 226% in comparison to the same time the previous year, and 276% since the third quarter of 2018.

 

2.       The Chinese Market

 According to China Energy Storage Alliance Project Tracking Database statistics, as of the end of December 2018, China’s operational energy storage project capacity totaled 31.2GW, an increase of 8% compared to the same period the previous year.  Pumped hydro made up the largest portion of this capacity at 30.0GW, an increase of 5% in comparison to the same period the previous year.  Electrochemical energy storage and molten salt storage followed at 1.01GW and 0.22GW, an increase of 159% and 1000% in comparison to the same time the previous year, respectively.

China’s Operational Electrochemical Energy Storage Project Distribution

Data source: CNESA Project Database, 2019

Data source: CNESA Project Database, 2019

In 2018, China’s newly operational energy storage projects totaled 2.3GW.  Of this, electrochemical energy storage made up 0.6GW, an increase of 414% in comparison to the previous year.

In the 4th quarter of 2018 (October – December), China’s newly added electrochemical energy storage project capacity totaled 286.5MW, an increase of 399% compared to the 4th quarter of the previous year, and 80% since the 3rd quarter of 2018.

3.       About this Report

The Global Energy Storage Market Tracking Report, authored by the China Energy Storage Alliance Research Department, provides market data and status updates for each quarter of the year.

The complete version of our Global Energy Storage Market Tracking Report (2018.Q4) can be downloaded from the CNESA ES Research website at www.esresearch.com.cn.

The ES Research website was launched January 18, 2018.  The site provides accurate, authoritative, and up-to-date market data analysis and information on the energy storage industry.  Please visit our website at www.esresearch.com.cn to learn more about the research services we offer.

For questions or comments, please contact the CNESA Research Department:

Phone: 010-65667068-805

Email: na.ning@cnesa.org

This report copyright China Energy Storage Alliance (CNESA). No part of this report may be reproduced or redistributed without the prior permission of the China Energy Storage Alliance. Citations and/or publications of this report with prior permission must give credit to the China Energy Storage Alliance, and no alteration or deletion of information is permitted.


2018 Market Summary: How China Can Learn from South Korea on Energy Storage Safety

architecture-blur-bright-1329061.jpg

There is no doubt that in 2018, safety was one of the top talking points in the energy storage industry.  With the recent energy storage station fire in South Korea, the country’s 16th such incident, safety has once again struck a nerve within the industry.  In the following article, the China Energy Storage Alliance takes a look at this accident as well as the Korean government’s response to see what lessons China can learn for the safety and development of its own energy storage industry.

1.       South Korea’s 16th Energy Storage System Fire

In early December 2018, an energy storage project at a cement factory in South Korea’s North Chungcheong Province caught fire, resulting in 4.1 billion won (3.63 million USD) dollars in damage.  This was the 15th of such fires in South Korea in 2018, and 16th total fire as of December 2018.  Worldwide, the fire caused fresh anxiety within the energy sector regarding the safety of energy storage systems.

2.       Why Have Fires Been So Frequent Among Korea’s Energy Storage Systems?

In regards to the frequency of energy storage system fires in South Korea, experts have cited the government’s hurried push for energy storage applications as the cause.  Prof Jeong Yong-hoon of the Korea Advanced Institute of Science and Technology notes that one of the chief causes is government subsidies aimed at energy conservation and the increase of spending on renewables, which has caused numerous companies and institutes to implement energy storage as quickly as possible, without proper consideration for safety and stability.

 

3.       How Can Korea Manage the Issue?

Korea’s Trade, Industry, and Energy Bureau had already begun safety inspections on the country’s 1253 energy storage projects.  At the time of the Chungcheong cement factory project fire, the bureau had already completed inspections on 669 energy storage stations, and recommended individual users, companies, and other organizations stop use of the 584 remaining energy storage installations across the country that had not yet undergone inspection.

Of the 16 energy storage project fires, half of the energy storage stations were linked with solar PV generators. Due to safety already becoming an issue of concern, the South Korean government has required energy storage installers to take stronger safety measures, such as increased use of monitoring systems and other measures.  However, since the implementation of greater safety measures increases system costs and adds to the burden on already high renewable energy prices, it is quite possible that South Korea is likely to lose motivation to expand the use of renewable energy for a period in the future.

 

4.       Lessons for China

Don’t panic.  The safety of energy storage installations can be ensured with proper engineering methods, and there is no reason to fear the safety of these systems.  Past accidents have occurred mainly as a result of a lack of strictness in regard to technological thresholds and safety measures.

 

Don’t blame accidents simply on the choice of batteries. It often appears that the primary cause of accidents has been the flammability of Li-ion batteries combined with thermal runaway.  However, most issues have occurred not because of the battery, but due to an electrical accident.  Safety is a complicated issue, and placing blame on the choice of battery is to simple of an answer, as the supporting system is equally as important.

 

Don’t sacrifice safety measures to save on costs. Current domestic energy storage project bids have prices near to the cost price and require projects to begin in a relatively short time period.  While low initial costs limit the amount of money that can be invested in safety measures, rushed submission of payment also shortens testing and verification periods, factors which both make it difficult to determine if safety issues are present.  Therefore, one of the major challenges for the energy storage industry is to ensure safety while keeping technology costs at an acceptable level.

 

Safety standards and related regulations must be established as soon as possible. After an accident happens, the root cause of its occurrence must be determined, and accident management and prevention solutions must be put in place.  Missing or incomplete standards and regulations should be researched thoroughly and put into action by their respective regulatory bureaus. Industry organizations such as CNESA have begun work research and planning standards, inspection, and certification methods for energy storage systems. At present, CNESA has been drafting standards for the evaluation of storage systems and begun trials of such evaluation methods, with the goal of encouraging safe and healthy development of energy storage systems.

 

Thorough verification and safety assessments must be completed before a project is put into operation. In recent years, Li-ion battery projects in China, South Korea, and Belgium have seen fires, though mainstream Li-ion battery producers in Europe and the United States maintain relatively low accident rates.  Some projects have seen safe operations for more than 8 years.  Internationally, much experience in energy storage has already transitioned into regulations and standards.  What this means in that although Li-ion batteries carry the risk of flammability and thermal runaway, with the proper management methods and an increase in safety thresholds, testing, and verification methods, the safe use of Li-ion batteries can be ensured.

 

5.       Hopes for 2019

 In 2018, we saw China’s energy storage market see tremendous growth in many areas.  In 2019, we hope to see more industry members and related agencies using the lessons and experiences from 2018 to increase energy storage safety management, continue the push for standards and regulations, and help to move energy storage to a healthier and more ideal development.

Author: Yue Fen
Translation: George Dudley

How International Energy Players Enter the Energy Storage Industry

Untitled.png

CNESA’s tracking of the global energy storage market reveals that over the past two years, many large energy industry players have purchased energy storage companies.  Examples include Enel’s purchase of Demand Energy, Total’s purchase of Saft, and Aggreko’s purchase of Younicos.  Such purchases have continued through 2018.  According to CNESA tracking, at least ten battery energy storage companies were acquired by large energy enterprises in the first nine months of 2018.  Two notable examples include ENGIE’s purchase of French microgrid and energy storage company Electro Power Systems (EPS), and international inverter leader SolarEdge’s purchase of Korean energy storage solutions provider Kokam.  Below, we take a look at these two case studies to discuss how these two major energy companies have taken different strategies to enter the energy storage industry.

1.       ENGIE purchases EPS

ENGIE, formerly known as GDF Suez, originates from the July 22, 2008 merger of Gaz de France and Suez.  On April 24, 2015, GDF Suez changed its name to ENGIE, focusing on natural gas, electricity, and energy services as its three main business areas.  The company is currently devoted to becoming a leader in the global energy transition. In recent years, the company has been continuously exploring the use of energy storage as part of its efforts to transition to become a low-carbon energy and solutions provider.

In May of 2016, ENGIE purchased 80% stock equity in American industrial-commercial energy storage systems provider Green Charge Networks (GCN), marking a big leap into the energy storage sector.  After the purchase, GCN changed its name to “ENGIE Storage,” continuing to provide its industrial-commercial behind-the-meter solutions in the United States while also using ENGIE’s foundation in the traditional energy sector to expand its products to grid-scale storage.  One example of such is ENGIE North America’s 3MW/6MWh grid-scale energy storage project developed in conjunction with Massachusetts utility Holyoke Gas & Electric (HG&E) in September 2017.  The project’s equipment, construction, and maintenance was provided by GCN. At the time of its launch, it was also the largest grid-scale energy storage project in Massachusetts.

If ENGIE’s purchase of GCN was made in order to capitalize on a strong industrial-commercial energy storage market in the United States, then ENGIE’s January 2018 purchase of 51% stock in French microgrid manufacturer Electro Power Systems (EPS) can be seen as a move to expand its energy storage business more comprehensively and at a larger geographic scale.  EPS focuses on microgrid projects and energy storage project development, construction, and operations.  Its energy storage projects are concentrated in European countries such as Italy and Spain as well as Africa.  ENGIE’s purchase of EPS strengthens its abilities to provide distributed energy and microgrid solutions while helping the company further its goal of becoming a low-carbon solutions provider.  For EPS, the purchase has also provided a channel and support to expand globally.  According to CNESA’s Global Energy Storage Project Database, following ENGIE’s purchase of EPS, ENGIE quickly helped EPS acquire a bid for a 35MW solar PV plus 45MWh energy storage microgrid project and 30 year PPA in the Pacific island of Palau.

2.       SolarEdge Purchases Kokam

SolarEdge was founded in 2006 and is headquartered in Israel. The company is a leading global provider of an intelligent solar PV power optimization and inverter system solution.  The company’s main business is the R&D, production, and sales of optimized DC PV inverter systems.  Such a system includes a power optimizer, inverter, and cloud monitoring system.  SolarEdge’s products are utilized mainly in distributed PV systems, including residential rooftop power stations and industrial-commercial distributed power stations.  SolarEdge began bringing its products to energy storage applications in 2015.

According to CNESA’s Global Energy Storage Vendor Database, prior to 2018, SolarEdge’s primary advantage was in its inverter business line.  The company collaborated on energy storage projects with major international battery manufacturers such as LG Chem and Tesla.  LG Chem’s 400V RESU10H high voltage residential storage series, featuring 7kWh and 9.8kWh capacities, utilizes SolarEdge’s Storedge single-phase DC inverter.  The product has been sold throughout the North American market.

Since 2018, SolarEdge has begun horizontal expansion into energy storage.  In May, SolarEdge launched a VPP software platform in preparation for the move toward smart management systems.  In October, SolarEdge purchased 75% of shares in South Korean battery manufacturer Kokam for the price of 88 million USD, with plans to purchase the remaining shares in the future. The move allows SolarEdge to now provide batteries as part of its business line.  Aside from providing some energy storage projects with systems integration and turnkey systems, Kokam also provides a full line of batteries, including high-power nickel-magnesium-cobalt (NMC) Li-ion batteries.  According to CNESA tracking, Kokam already possesses over 700MWh of Li-ion deployed in the aerospace, electric vehicle, and energy storage sectors.  The purchase of Kokam has increased SolarEdge’s product line, while also ensuring that SolarEdge inverter solutions and Kokam battery products will be able to integrate seamlessly.

3.       CNESA Summary

ENGIE and SolarEdge’s experiences demonstrate how companies often take different strategies to enter the energy storage sector.  ENGIE’s choice of purchasing GCM was in part due to recognizing the company’s existing accumulation of technology and projects, though more importantly was a recognition of the industrial-commercial behind-the-meter storage market in the United States.  ENGIE’s purchase of EPS also shows that the company also has an optimistic view of future distributed energy storage and microgrid markets in Africa and the Pacific.  In contrast, SolarEdge has looked more towards technology integration, starting with early collaboration with major battery manufacturers on energy storage projects and accumulating experience, to the recent purchase of battery product supplier Kokam, allowing SolarEdge to “fill in the gaps” in its own systems solutions services. SolarEdge has taken steps toward becoming a provider of a complete set of energy storage solutions.

Author: Yue Fen
Translation: George Dudley

Thoughts on the Present and Future of Energy Storage Development

Power Lines.jpeg

Energy storage applications have the ability to alter China’s traditional models for the supply and use of energy, providing major support to China’s energy transition, the user-side energy revolution, ensuring energy safety, energy conservation, and emissions reduction goals.  The development of energy storage has already attracted the attention and support of government regulatory agencies, the power system, and numerous related industries such as renewable energy and transportation.  Energy storage is no longer being left on its own to mature.  Instead, we have seen energy storage being included within the definition of “energy” in the policies of many countries, particularly as a form of renewable energy or listed as a key technology and/or component for support of the energy system.

Energy storage applications can help encourage the use of large-scale renewable energy, increase the proportion of generation sourced from wind and solar power, increase the efficiency of electricity use, decrease reliance on fossil fuels, conserve resources, and lower environmental pollution. Recently, with the push for large-scale reforms of the power system and development of Internet of Energy technologies, we have seen better and brighter prospects for the widespread use of electricity, thermal, and other storage technologies.  Energy storage can connect flexibly at the power supply, transmission, or end-user side, allowing multiple energy sources to complement and optimize with one another.  The development of energy storage supports the simultaneous development of China’s energy structure and power reforms, bringing a new source of innovative strength to the energy sector.

We can trace the beginning of energy storage in China back to the year 2000.  Over the following ten years, energy storage went from early R&D, to demonstration projects, to the early stages of commercialization.  Although development during this period was fraught with challenges and setbacks, it was also a period full of innovation and success. In 2011, energy storage left the laboratory, and the “Zhangbei Wind, Solar, and Storage” project, China’s first large scale energy storage demonstration, was launched, signifying the first big step in the creation of a true storage industry.

Energy storage developed rapidly in the years following.  According to China Energy Storage Alliance statistics, by 2017, China’s accumulated electrical energy storage capacity (including pumped hydro) totaled 28.88GW. Among this total accumulated storage capacity, electrochemical energy storage growth was most striking, at nearly 390MW by the end of 2017, reflecting an annual growth rate of 45%.  From 2016-2017, the total capacity of China’s energy storage projects either planned or under construction neared 1.6GW, 10 times the total accumulated capacity of 2000-2015.  China’s energy storage industry is now rapidly transitioning from demonstration applications to the early stages of commercialization.

Many have been delighted to see how quickly the industry has developed, yet this period has not been without problems, some of which have been roadblocks in the path to commercialization.  As an emerging technology, energy storage faces challenges including how to define its identity within the power and energy markets, how to create a suitable pricing mechanism for storage to participate in the market, how to manage the dropping of technology costs, how to increase safety and efficiency, and how to create industry standardization and verification systems.  Resolving such questions are keys not only to ensuring energy storage can be profitable, but also to ensuring the sustainability of the industry.

In order to promote the healthy development of the energy storage industry, five agencies including the National Development and Reform Commission and National Energy Administration jointly released the Guiding Opinions on Promoting Energy Storage Technology and Industry Development on October 11, 2017.  The Guiding Opinions is China’s first guiding policy for large-scale energy storage technology and applications development.  The policy outlines the direction in which energy storage should develop from now through the mid- to long-term, including goals for the next ten years.  The policy also establishes the five main areas and 17 important tasks for energy storage development, as well as defines safeguard measures based on considerations such as government policy, project demonstrations, compensation mechanisms, and social investment.

In regards to the main issues facing energy storage, the Guiding Opinions stresses energy storage marketization, including the creation of an energy storage market mechanism and price mechanism. The policy also stresses that energy storage should develop in conjunction with power system reforms and the Internet of Energy.  At present, one of the greatest barriers to energy storage marketization is that the current market is not able to quantify the value that energy storage applications provide, and storage is therefore unable to act as a true market product.  Therefore, for most energy storage applications, the first step is determining what identity storage will have in the market, followed by the second and more important step of defining a reasonable price (compensation) mechanism.

Energy storage in China currently has four major application categories: renewable integration, ancillary services, grid-side, and behind-the-meter.  According to CNESA statistics, as of the 2017 year’s end, the proportion of China’s total electrochemical energy storage capacity in renewable integration, ancillary services, grid-side, and behind-the-meter applications totaled 29%, 9%, 3%, and 59%, respectively.  Compared to the installation capacities for 2015, ancillary services increased 7 percentage points, and behind-the-meter increased 3 percentage points. These two application areas are ones that hold the greatest earnings potential and the greatest likelihood of seeing initial commercialization.

Recently released power reform policies and supporting documents have provided a foundation and support for the use of energy storage in ancillary services and demand response.  These policies have had a great effect on increasing the economic effectiveness of ancillary services and behind-the-meter energy storage, and have been designed to coordinate with market development and the creation of market and pricing mechanisms.

In over ten years of development, the energy storage industry chain has seen a marked improvement.  In the early period of application demonstrations, the main market participants included Li-ion battery, lead-acid battery, and flow battery suppliers.  Chinese companies in this category include BYD, CATL, eTrust, Narada, Shoto, Rongke, and Puneng.  Once China entered the Thirteenth Five-Year Plan period, energy storage applications became more diverse and began expanding into new areas.  Some solar PV companies also began expanding into energy storage, such as GCL Power, Trinasolar, and others, who founded energy storage subsidiaries or special departments to expand into combined energy storage and solar applications.  At the same time, PCS and other traditional power equipment vendors began expanding into energy storage systems integration.  Recent systems integrators of note include Sungrow-Samsung, CLOU, Narada, Shoto Group, Sunwoda, and ZTT.

With the expansion of energy storage applications and the participation of a wide variety of companies, the roles of equipment vendors, systems integrators, and EPCs have largely become clearly defined.  The next steps in energy storage development are closely aligned with energy transition and power system reforms.  Energy storage has already begun participating in multi-energy systems, Internet of Energy projects, and “energy storage cloud+” virtual power plant demonstration projects.  In the future, commercial park developers, energy service companies, and power companies all area likely to become purchasers of energy storage systems and systems integrators.  Energy storage systems will thereby become a closer part of the energy and power markets.

The next ten years will be a period of rapid development for energy storage.  The Guiding Opinions provides clear goals for the Fourteenth Five-Year plan period: energy storage projects should become widespread, a complete industry system must form, energy storage should become a tool for creating a more economical energy sector, the industry should see large-scale development, and energy storage should become a motivator in the energy transition and development of the Internet of Energy.  These goals are objective, and provide a set of guidelines for the direction in which the industry should develop.  CNESA has modeled predictions for the future of the energy storage market based on its Global Energy Storage Database.  It is expected that the total installed capacity in China will reach 1.794GW by 2020, and 10.794GW by 2025.  Based on current development trends, the prospects for meeting such predictions are very good.

At the same time, we do see that energy storage still has a long way to go before it reaches large-scale development. To reach such a goal will require a combined effort from all industry stakeholders.  With power market reforms ever increasing, energy storage applications continue to spread throughout the energy sector, and new business models appear.  During this period, it is the China Energy Storage Alliance’s goal to support the healthy growth of the energy storage industry, both through tracking and analysis of storage policies, creating a bridge between the government and the storage industry, responding to the needs of the industry, and supplying objective and realistic guidance.  The Alliance is also determined to continue providing comprehensive market research, including expansion of the Global Energy Storage Database and providing stakeholders and the public with objective data that will help contribute to the creation of a solid foundation for the industry.  Finally, CNESA is dedicated to promoting communication within the industry, including international exchange, market meetings, and standardization committees, platforms that bring stakeholders together and move the industry forward as one.

Author: Tina Zhang, China Energy Storage Alliance
Translation: George Dudley

CNESA Global Energy Storage Market Analysis – 2018 Q3 (Summary)

1.       The Global Market

As of the end of September 2018, global operational electrochemical energy storage capacity totaled 4037.6MW, or 2.3% of the total of all energy storage technologies, and an increase of 80% in comparison to the end of September 2017.

Global.png

In the third quarter of 2018 (July through September), global newly operational electrochemical energy storage project capacity totaled 413.9MW, an increase of 173% in comparison to 2017 Q3, and a decrease of 22% in comparison to 2018 Q2.

In a geographic comparison, China showed the greatest increase in newly operational energy storage capacity, at 159.5MW, or 38% of the total, an increase of 667% in comparison to 2017 Q3 and 110% since 2018 Q2.  In applications, the greatest newly operational electrochemical energy storage capacity was concentrated in grid-side projects, at 179.1MW, or 43% of the total, an increase of 1785% from 2017 Q3, and 76% since 2018 Q2.  In technologies, new electrochemical energy storage projects most frequently utilized Li-ion batteries, at 374.7MW, or 91% of the total, an increase of 170% in comparison to 2017 Q3 and a decrease of 29% since 2018 Q2.

2.       The Chinese Market

As of the end of September 2018, China’s operational electrochemical energy storage capacity totaled 649.7MW, 2.1% of the total for all of the country’s energy storage technologies, and an increase of 104% in comparison to the end of September 2017.

China.png

In the third quarter of 2018 (July through September), China’s newly operational electrochemical energy storage project capacity totaled 159.5MW, an increase of 697% in comparison to 2017 Q3, and 110% since 2018 Q2.

In a geographic comparison, Jiangsu province showed the greatest increase in newly operational electrochemical energy storage capacity, at 111.5MW, or 70% of the total.  In applications, the greatest newly operational electrochemical energy storage capacity was concentrated in grid-side projects, at 97.6MW, or 61% of the total, an increase of 100% in comparison to 2017 Q3, and 332% since 2018 Q2.  In technologies, new electrochemical energy storage projects most frequently utilized Li-ion batteries, at 137.5MW, or 86% of the total, an increase of 1499% since 2017 Q3, and 86% since 2018 Q2.

3.       About this Report

The full version of our quarterly Energy Storage Market Analysis report is available for purchase through CNESA’s “ES Research” platform: www.es.research.com.cn.

The ES Research platform was launched in January 2018 and features a diverse range of market statistics and industry data.  Sign up at www.es.research.com.cn to learn more about CNESA’s energy storage research products series.

For questions, please contact our research department by phone or email at:

Phone: 010-65667068-805

Email: esresearch@cnesa.org

The Energy Storage Industry’s Urgent Need for Detailed Policy Action

zhang-kaiyv-1065334-unsplash.jpg

China Energy Storage Alliance Vice Chairman Johnson Yu recently spoke at a National Energy Administration forum on promoting the sustainable development of the energy storage industry.  Vice Chairman Yu provided his thoughts and suggestions on some of the current challenges facing the industry.  Last year marked the release of the Guiding Opinions on Promoting Energy Storage Technology and Development policy, which addresses industry questions regarding government regulations, demonstration projects, compensation mechanisms, social investment, testing and certification, system safety, and other topics. Yet, as the name suggests, the Guiding Opinions only serves as a guideline document.  The industry is still in need of support from specific and practicable policies.  China Electric Power News spoke with China Energy Storage Alliance Vice Chairman Johnson Yu to learn his thoughts on energy storage policy.  The CNESA research department has provided a summary of the interview below:

The Storage Industry’s Most Pressing Issues and Suggestions for How to Resolve Them

Current energy storage applications are mostly centered on renewable integration, ancillary services (such as peak shaving and frequency regulation), grid-side applications, and behind-the-meter applications.  Renewable integration projects have frequently been used to solve curtailment issues at aged solar PV stations where feed-in tariff prices are high.  These projects have a certain economic value, though also hold potential future market risks (should lowering curtailment lead to decreased earnings).  Investors for these applications have mostly been power generation companies themselves, such as Huaneng Group, Huanghe Hydropower Development, and Beijing Enterprises Clean Energy Group, who implement energy storage at solar PV and wind bases.  Such projects help to verify the technology roadmap for storage while also helping to resolve renewable energy consumption issues.

Vendors are more likely to look at the opportunities brought by policies over the next three to five years, and if the policy roadmap will become clearer.  If, in the short term, we can rely on current power policies to provide compensation to energy storage based on market prices, while in the long term taking the proper measures to anticipate the future power markets—including spot markets and ancillary services markets—the industry will be set on a positive development path.

Within the ongoing power market reforms, ancillary services such as frequency regulation and peak shifting have had an early start.  As early as 2008 a quasi-market mechanism was created to pay for services based on their effectiveness, though at present it is generation companies who provide compensation funds.

Therefore, the first suggestion is to consider the sustainability of policies.  Future compensation for storage should come from the end-user who creates the need for the service, benefiting the current “effectiveness-based compensation” model of energy storage in ancillary services. The second suggestion is that if energy storage should enter the ancillary services market as an independent entity, then it should be completely marketized so that it can compete fairly with other market services.  The third suggestion is that regions which are in the early stages of marketization and are awaiting the government to set prices should have their prices set according to contribution value and avoid cost pricing.  Early projects need to display a certain degree of profit margin and iteration.  This includes safety issues, which although can be resolved through technical engineering, are often limited in effectiveness due to cost considerations.  One of the major challenges for energy storage is determining how to ensure safety while at the same time maintaining reasonable technology costs.

According to CNESA research, since the beginning of 2018, Jiangsu, Henan, and Hunan provinces have shown the biggest proportions of new grid-side energy storage.  From the perspective of industry development, grid-side energy storage should be encouraged through the construction of new demonstration projects that can clearly define development models and obligations of all stakeholders.

One possible suggestion for the short term is to review the pricing structures for pumped hydro storage.  However, as CNESA experts have pointed out, from the perspective of the power market, grid-side energy storage investment and power station operations should be relaxed, and requisite measures should be adopted to encourage entities outside of the power grid to join in investment and construction of grid-side energy storage.  When energy storage is operated by the grid itself, it is unable to participate in future power market transactions as doing so may cause distortions in the market.  Future market mechanisms must be designed to ensure that all market players receive fair treatment, a task that will require careful consideration.

Current behind-the-meter storage projects have largely focused on energy arbitrage, relying on energy management contracts to save end users money.  According to CNESA statistics, as of the 2017 year’s end, behind-the-meter electrochemical energy storage accounted for 59% of applications, though the first half of 2018 saw a slowdown in growth, with newly added capacity making up 19% of the total.  Development of behind-the-meter projects faces three main issues.  First, the source of earnings is singular, and the rate of return is low.  In most cases, investment in such a project will have a rate of return of approximately 7-8 years or more.  When considering the total costs of investment versus the rate of return, most projects will not be appealing unless they are among the small number of cases in which peak and off-peak price differences are extremely high.  Second, investors are often focused on the potential risks brought on by future policies.  It is not yet known how the mechanism for energy arbitrage will be restructured in the future.  Such concerns have had a very real effect in causing recent behind-the-meter projects to be put on hold.  Third, more focus must be placed on safety.  Low earnings put a limit on the amounts that stakeholders are willing to invest, in turn meaning that less funding is allocated to safety measures, which can have potentially disastrous consequences.

In the future, related technologies such as electric vehicles, V2G, and demand response will also have room to develop.  The use of demand response abroad has provided a bank of experience that we can learn from, giving priority dispatch to demand side resources like energy storage and renewables.  Priority dispatch of demand-side resources is one of the most effective methods to save money and increase efficiency.  In China, demand response development has seen some experimental use, but without much intensity or significant enthusiasm from customers.

From the perspective of energy storage, if a 100 RMB/kWh~400 RMB/kWh subsidy can be provided to demand-side resources based on response type, and if a sufficient dispatch is called for, then current user-side energy storage projects will increase earnings, providing greater motivation for new projects.  One suggestion is to refer to trial subsidy programs and implement similar programs in areas of the country where power demand is strained.

Needed Market Mechanisms and Industry Regulations for Energy Storage Development

Generally speaking, all energy storage projects—whether they are behind-the-meter, ancillary services, grid-side, or renewable integration applications—are in dire need of a market mechanism that can help bring about sustainable development.

Furthermore, there are two points worthy of caution.  First, policies can easily take the place of the market in determining the technology roadmap.  Policies should be focused on increasing safety, verification methods, and standardization, not simply choosing which the technology roadmap on behalf of the market.  Second, because power marketization is still in its early stages, many models including energy arbitrage and compensation for frequency regulation are currently managed under interim policies.  Only certain regions have developed mechanisms that are capable of supporting such models, while many regions lack the capability to create such models and require subsidies in order to be implemented.

Areas with profitable energy storage projects are also facing uncertain and fluctuating policies.  Detailed regulations for market reforms are urgently needed for long term energy storage investment to become a possibility.  Short-term investment and operations development models rely too heavily on company credit, bringing them major operations risks.

From an economic perspective, our current hopes for policy support include: First, adjusting electricity prices in a way that is flexible according to varying regional conditions.  We recommend the government consider reserving space within power price adjustment for “energy storage subsidy funding” to support energy storage development.  Second, while the Guiding Opinions has laid out a framework for energy storage development, we recommend local governments examine their own capabilities and industry characteristics to create policies that will encourage energy storage development in their own regions.

Article originally published in China Electric Power News
Reporter: Qin Hong
Translation: George Dudley

Energy Storage Safety Standards and Regulations Must Meet the Pace of Industry Development

1539938290(1).png

The news of a fire at an energy storage station in Zhenjiang brought attention once again to the issue of energy storage safety.  How do we guarantee the safety of storage systems? How can the developing storage industry maintain a reasonable balance between cost and safety?  China Electric Power News sat down with China Energy Storage Alliance Vice Chairman Johnson Yu to discuss these questions.  CNESA has provided a summary of the content below:

Current Domestic Energy Storage Safety Situation

Energy storage is still an emerging industry in China.  The industry got its start relatively late in China in comparison to other countries, and domestic projects are still few.  The coexistence of numerous technologies, each with their own unique safety needs, has meant that industry regulations, standards, and verification practices are still lacking. Therefore, performing strict evaluations of energy storage systems remains difficult, and irregularity between systems exists.  Such conditions can lead to a number of hidden dangers.

Causes of Energy Storage System Accidents

At present, the major cause of accidents is the combination of Li-ion battery flammability with thermal runaway.  However, the source of the accident is usually not the battery cell itself, but an electrical accident.  Safety is a complicated issue, and it is not possible to trace the cause of an accident back simply to the choice of battery or battery cell.  The supporting system is equally important.  However, many peripheral system components and measures surrounding battery cells currently lack proper safety standards, such as the designs of battery management systems, energy management systems, and system containers, as well as emergency handling procedures, choice of insulation materials, and fire extinguishment methods.

In addition, safety issues will differ based on technology.  Because Li-ion batteries rely on an organic electrolyte solution, they are susceptible to thermal runaway and combustion.  Lead-acid and flow batteries will not combust, but this does not mean that these technologies are not susceptible to other electrical accidents.  Last year’s newly constructed energy storage capacity totaled 127 MW.  Lead-carbon, Li-ion, and flow battery technologies each made up part of this capacity, and each technology has its own different level of developmental maturity, attributes, and system needs.  Accidents also have their own degree of randomness, and it is impossible to have a complete evaluation method for one individual system.  The problem also cannot be solved by simply eliminating the use of a certain technology or battery cell to prevent accidents from occurring.

It is also difficult to compare the probability of accident occurrence due to the wide variety of settings for energy storage applications.  For example, grid-side storage and behind-the-meter storage, open air deployment and indoor deployment—such variations each have their own standardization needs.  Energy storage for grid frequency regulation requires the use of high frequencies and heavy electric current for charge and discharge, requirements that are much higher than that needed for behind-the-meter systems.  However, that does not mean we can say that grid-side systems are inherently less safe than behind-the-meter systems.  Many other factors are at play, such as the design requirements of each system, control strategies, operating regulations, etc.

The Effects of the Zhenjiang Fire on the Domestic Energy Storage Industry

Energy storage projects in China that have experienced fires are those that are innovative and exploratory, though are the types of projects that would be considered already mature in many other countries.  Safety issues can be resolved through engineering techniques, and it is unlikely that safety issues will cause a panic within the public, though it is imperative that industry players still place system safety as a priority.

Most of the accidents that have occurred have been due to a lack of strictness regarding technological thresholds and safety measures.  Another factor is that cost restrictions can lead to a lowering of requirements for safety.  One of the industry’s major challenges is guaranteeing system safety while still preserving technology costs that are reasonable.

CNESA Vice Chairman Johnson Yu sits down for an interview at ESIE 2017

CNESA Vice Chairman Johnson Yu sits down for an interview at ESIE 2017

Suggestions for Improving the Safety of China’s Energy Storage Systems

China’s energy storage safety standards and related regulations still have a lot of catching up to do.  Whenever an accident happens, it is crucial that we determine its true cause so that proper measures for dealing with the problem can be enacted.  Updating and improving standards will require regulators to put greater effort into research and reform. Proper verification or certification of projects before they are implemented should also not be taken lightly.

Though China has taken greater consideration to safety issues in recent years, more attention has been paid to technological choices.  In the long term, we should encourage more safe technologies to enter the market, such as solid-state batteries.  Yet in the short- and medium-term, improving system safety will require considering the entire system design, analyzing the cause and site of accidents and taking the proper measures to prevent them.  We also must of course ensure that proper measures are in place to maintain the safety of the public and our utilities.

Globally, Li-ion batteries are widespread, particularly in electric vehicles, and their qualities are well-known in the industry.  Most new energy storage projects rely on Li-ion batteries.  In the past year, projects in China, South Korea, and Belgium have all had fires, though mainstream Li-ion battery manufacturers in the European and American markets maintain a low accident rate.  Some projects have seen continued safe use for over eight years.  Much of the valuable experience accumulated in other countries has lent itself to the creation of standards and regulations.  What this means is that though Li-ion batteries still carry the risk of flammability and thermal runaway, with proper and strict management, safety of such systems can be maintained.  Increasing safety measures is not only a necessity, it will also help our industry develop in a healthy direction.

Originally published in China Electric Power News, 2018-9-27
Reporter: Deng Huiping
Translation: George Dudley

CNESA Global Energy Storage Market Analysis – 2018 Q2 (Summary)

1.       The Global Market

As of the end of June 2018, the global capacity of electrochemical energy storage projects in operation totaled 3623.74MW, or 2.1% of the total capacity of all energy storage technologies, and an increase of 0.4 percentage points since the 2017 year’s end.

Global Storage Capacity 2018 H1.png

In the first half of 2018, global newly added electrochemical energy storage projects totaled 697.1MW, an increase of 133% from the same period the previous year, and 24% since the 2017 year’s end.  In a regional comparison, the United Kingdom had the highest amount of newly installed capacity, at 307.2MW, or 44% of the total, an increase of 441% from the same period the previous year.  In applications, ancillary services saw the highest growth in new capacity, at 354.2MW, or 51% of the total, an increase of 344% from the previous year.  In technologies, Li-ion batteries were most widespread, with a total installed capacity of 690.2MW, or 99% of the total, an increase of 142% from the previous year.

2. The Chinese Market

As of the end of June 2018, China’s electrochemical energy storage projects in operation totaled 490.2MW, or 1.6% of the total of all energy storage technologies in the country, and an increase of 0.3 percentage points since the 2017 year’s end.

China's Energy Storage Capacity 2018 H1.png

In the first half of 2018, China’s newly added electrochemical energy storage projects totaled 100.4MW, an increase of 127% from the previous year, and 26% since the 2017 year’s end.  In a regional comparison, Jiangsu province saw the greatest increase in newly operational capacity at 25% of the total, a 996% increase since the end of the 2017 year.  In applications, grid-side energy storage held the largest portion of capacity, at 42.6MW, nearly 45% of the total.  In technologies, the vast majority of capacity was in Li-ion batteries, at 94.1MW, or 94% of the total, and increase of 172% compared to the same time the previous year.

Author: CNESA Research
Translation: George Dudley

SGIP Policy Revisions: How California Provides Incentives for Distributed Energy Storage

Introduction

The Self-Generation Incentive Program (SGIP) initiated in 2001 has been one of the most successful and longest-running distributed energy storage generation policies in the United States.  The plan encourages the use of a variety of behind-the-meter systems, including wind power, fuel cells, internal combustion engines, solar PV, and more.  In 2011, SGIP began support for energy storage systems, providing a subsidy of $2.00/W.  In the eight years that SGIP has been providing funds for energy storage, the policy has gone through a number of revisions and adjustments.  In the following article, CNESA’s research department provides a look at the SGIP policy, including its recent updates and revisions.  We hope this information will help shed light on the SGIP policy for our energy storage colleagues in China and abroad.

 

1.       The SGIP Subsidy Method

In May of 2016, California Public Utilities Commission President Michael Picker released a proposal calling for reforms to the Self-Generation Incentive Program (SGIP).  The largest of these changes was to the SGIP method of distributing yearly subsidies based on the power of systems. Instead, the updated policy would follow the example of California’s PV subsidy policy by setting capacity targets for subsidy distribution, factoring in the declining costs of energy storage, considering the economic feasibility of systems, and other factors, finally distributing subsidies according to the energy (Wh) of storage systems.

On May 1, 2017, SGIP reopened to energy storage applicants.  The new SGIP provides 75% of its incentive funding to energy storage.  15% of this funding is kept as reserve funding for residential storage projects less than or equal to 10kW.

Under the updated policy, residential energy storage projects less than or equal to 10kW can receive a subsidy of $0.5/Wh.  Projects larger than 10kW can also receive a subsidy of $0.5/Wh, but are ineligible to also receive the investment tax credit (ITC).  Should the recipient wish to also receive the ITC, the SGIP subsidy will lower to $0.36/Wh.

The updated SGIP policy distributes subsidy funds in five steps.  The first step begins May 1.  Once all step 1 funds have been applied for, there is a 20-day waiting period before the beginning of step 2.  At step 2, the subsidy will decrease by $0.1/Wh.  At step 3, the subsidies will decrease again by $0.05/Wh, then continue to decrease gradually by $0.05/Wh for each remaining step.

Subsidy payments are not only reduced with the passage of time, but also reduce according to the duration and energy (Wh) of the system.  The chart below details the specifications for such subsidy adjustments.  According to these regulations, if an energy storage system is, for example, of a duration greater than 2 hours and has an energy capacity greater than 2MWh, then the system will receive two overlaid reductions.

SGIP.png

Table: SGIP Subsidy Reduction Standards

The following example demonstrates how the reduction process works:

A 1MW/4MWh energy storage system with a 4-hour duration applies for the energy storage subsidy during step one (at a subsidy rate of 0.5 USD/Wh). According to the capacity and duration regulations, the first 2 hours and 2MWhs will receive 100% of the base subsidy funds, while the second 2 hours and 2MWhs will receive 25% of the base subsidy funds. The subsidy payments are calculated as follows:

The total subsidy amount for the first 2 hours and 2MWhs: 2,000,000Wh × $0.50/Wh=$1,000,000.

The total subsidy amount for the remaining 2 hours and 2MWhs: 2,000,000Wh × $0.50/Wh × 25%=$250,000.

The total subsidy that the system will receive: $1,000,000+$250,000=$1,250,000

This staggered subsidy system based on combined capacity and duration has encouraged the installation of more distributed energy storage systems.  At the same time, the payment reduction standards for large-scale systems helps account for decreasing costs as systems scale up, ensuring that subsidy payments between small- and large-scale systems remain fair.

2.      SGIP Implementation

SGIP statistics reveal that from the period in which energy storage began being included in the subsidy system until August 2018, projects that were either in the process of receiving subsidies or had already received subsidies (not including cancellations) had reached 8890.  Of these, nearly 1300 projects had already received the total SGIP subsidy payment, with only slightly over 100 energy storage projects listed as “PBI (Performance Based Subsidies) in progress,” over 5500 projects had subsidy budgets reserved, and over 1500 projects had subsidy budgets pending reservation. The majority of 2017 and 2018’s distributed energy storage projects were either on reserve or pending reservation.

SGIP 2.jpg

Figure: Subsidy Budget Classifications for Energy Storage Projects

The greatest number of projects to receive funding included those with energy storage equipment manufactured by Tesla, LG Chem, Stem, Green Charge Networks, Sonnen, and Lockheed Martin.  Tesla, in conjunction with partners such as its subsidiary Solarcity, saw nearly 4000 projects totaling 270MWh apply for SGIP subsidy funding.  These 4000 projects include those that have reserved subsidies, are pending payment, or have completed payment, amounting to a total of $215 million.

SGIP 3.jpg

Figure: Equipment Manufacturers Receiving SGIP Funding

Due to the increase in subsidy funding provided to storage systems in 2017, SGIP applications saw a major increase for that year, particularly in household energy storage installations. SGIP applications for household storage projects from January to August 2018 have already surpassed the total applications for the 2017 year. However, because household storage projects are small in scale, the increase in household storage applications has caused the combined overall capacity of all applications to decrease significantly.

SGIP 4.png

Figure: SGIP Subsidies by Project Type and Capacity

 

Summary:

In the 10 years since the implementation of the SGIP, the policy has been a major contributor to the development of distributed energy storage business models in California. Energy storage providers have used the SGIP experience to help attract new customers and investors.  The development of distributed energy storage in California has helped increase the stability and effectiveness of the California grid, while at the same time attracting more investments in solar-plus-storage technology.  Such support has helped assist California in its goal of incorporating more renewable energy and reducing carbon emissions.

In China, some cities and regions have considered implementing incentive policies similar to that of SGIP to encourage installation of distributed energy storage projects.  A Chinese storage incentive policy could borrow from SGIP in a number of ways: (1) setting a technological threshold for energy storage systems; (2) using a performance-based incentive structure; (3) setting an upper limit for individual project awards; (4) utilizing a subsidy reduction mechanism that takes into account multiple dimensions of the system.  Only a well-designed and properly implemented policy framework will be able to impact the energy storage industry in a positive way.  CNESA hopes that its continued tracking of updates to the structure and implementation of SGIP will help provide our followers and policymakers in China with a reference for how a successful incentive policy can be utilized.

Author: Yue Fen
Translation: George Dudley

Development Trends in Combined Solar PV & Energy Storage

roofs-with-solar-panels-1202305.jpg

The combining of energy storage with solar PV applications has become a significant method for lowering electricity bills, increasing reliability of electricity supply, and decreasing of environmental pollution.  In 2017, the use of such solar-plus-storage systems became a prominent application for campus microgrids, islands, and industrial-commercial behind-the-meter systems.  Whether in open electricity markets such as the United States or Australia, or in island regions of Southeast Asia and the Caribbean, distributed solar-plus-storage resources have seen widespread applications.  The National Development and Reform Commission’s May 31st release of the Notice on Matters Relating to Solar PV Electricity in 2018 addresses subsidy standards and tightening of solar PV targets.  Solar PV companies are looking to energy storage as a solution, viewing it not only as the next direction for the market, but also seeing it as a new way of generating revenue for solar PV resources.  In the following article, CNESA seeks to summarize and analyze the most recent development trends and changes involving combined solar PV and storage applications in electricity markets.

The expansion of solar PV applications that has occurred in some countries can be attributed to three factors.  The first is an increase in policy support that has led to the expansion of distributed energy and renewable energy resources, allowing more solar PV applications to emerge.  The second is decreasing costs for solar PV systems that has in turn led to decreasing subsidy support for grid connection of such systems.  The third is increasingly open electricity markets that have shifted renewable energy subsidy costs to customers, causing electricity bills to rise. Other factors include government policy support for solar PV systems and energy storage systems as well as an oversaturation of renewable resources in the grid.  Such factors have stimulated customers, including industrial-commercial customers and residential customers, to make use of energy storage both for its economic advantages as well as to lessen dependence on the grid.

1.       German Investment and Policies Support the Growth of Solar-Plus-Storage

Berlin.jpg

Following Germany’s decision to retire its nuclear power plants, the country has focused on increasing its renewable energy generation.  Germany has set a goal to generate 35% of total power from renewable resources by 2020, and no less than 80% by 2050.  Resolving renewable energy grid integration issues is a key factor to realizing this goal.  In 2013, Germany released a subsidy policy to support the construction of solar PV and storage projects.  The policy provided a 30% subsidy for investment in residential energy storage equipment, with additional requirements for PV operators to contribute 60% of their output to the grid.  In 2016, Germany implemented a new solar-plus-storage subsidy policy.  The policy is set to continue to the end of 2018 and will provide subsidies for energy storage systems combined with grid-connected solar generation.  The policy only permits 50% of the system’s peak power to be returned to the grid, a significant difference from previous requirements for solar-plus-storage returns to the grid.  Such changes signify how the country has begun to encourage self-generation through distributed energy resources as part of its expansion of renewable energy.  In October of 2016, Germany’s KfW was forced to halt distribution of new subsidies due to exhaustion of funds.  At the same time, the government also confirmed that beginning July 1, 2017, subsidy funding would decrease from 19% of the total investment cost to 16%, decreasing again by 3% on October 1, with a total drop to 10% by the end of 2018.

Germany’s guaranteed subsidies have helped stimulate the large-scale development of the renewable energy industry, yet at the same time have increased electricity prices for customers.  Germany’s retail electricity costs have increased from 14 Euros/kWh in 2000 to 29 Euros/kWh in 2013.  Such increases have meant that the public has had to foot the bill for increasing use of renewable resources.  Policy support has pulled back to moderate levels. Decreasing energy storage prices, decreasing feed-in tariffs (FIT) for solar, increasing electricity prices for residential customers, and increased residential energy storage subsidies have all played a role in promoting Germany’s residential solar-plus-storage market development, with the self-generation of electricity becoming a popular choice.

2.       United States Tax Cuts and Accelerated Depreciation Encourage Solar and Storage Combinations

San Francisco.jpg

Apart from its favorable environmental conditions, energy storage financing policies, and pressures from high electric prices, the United States has seen additional factors which have encouraged the use of solar-plus-storage applications.  Support for the construction of energy storage systems in the United States has not relied completely on subsidy programs such as California’s Self-Generation Incentive Program (SGIP).  Early efforts included Investment Tax Credits (ITC), tax credit policies created to stimulate green energy investment.  Such policies provided solar PV projects with a tax credit of 30% on the total cost of the project.  Other support includes accelerated depreciation, a tax deduction method approved by the IRS.  Solar PV projects constructed after December 31, 2005 can make use of the accelerated depreciation rule, allowing stationary assets to gradually depreciate based on the equipment’s age.  In 2016, ESA submitted proposal S3159 to the U.S. senate—The Energy Storage Tax Incentive and Deployment Act. The act specifies that energy storage technology may apply for ITC and that it may operate in support of renewable energy systems either independently or as part of a microgrid system.  To promote the simultaneous development of energy storage and renewables, policies have also required energy storage systems to source at least 75% of their stored electric power from renewable energy as a condition for receiving ITC support.  This support covers 30% of the system investment costs, lowering to 10% support by 2022.  Energy storage systems that store between 75%-99% renewable sourced energy can enjoy a partial ITC tax break.  Only those systems which store 100% renewable energy can enjoy full ITC benefits.  At the same time, energy storage systems that do not include renewable energy components can utilize a seven year accelerated depreciation plan, equivalent to a 25% reduction in initial system costs.  Although systems that source less than 50% of their charging capacity from renewable energy do not meet the requirements to receive ITC, they can still enjoy the same accelerated depreciation plan.  Storage systems charging greater than 50% renewable sourced energy can enjoy a five year accelerated depreciation plan, equivalent to a 27% reduction in initial investment costs.

Many regions, including California, have been promoting the use of solar-plus-storage microgrid applications, shrinking electricity bills.  Hawaii is a strong example of a region harnessing solar-plus-storage applications.  For many years, Hawaii has used investment stimulus plans to support the use of energy storage technologies, in part as a way to harness the region’s plentiful renewable resources.  High electricity prices have also encouraged the islands to construct solar PV systems.  By the end of 2017, 16%-20% of households on each of Hawaii’s islands owned a solar PV system.  The proliferation of distributed solar systems across the state has been a challenge for utilities.  In 2015, the state government canceled net metering regulations for the Hawaiian Electric Company and implementing a policy to restrict the transfer of electricity back to the grid, essentially encouraging the use of combined solar-plus-storage systems.  In January 2017, the region released a stimulus policy directly supporting the installation of solar-plus-storage systems.

3.       Japan Explores Solar-Plus-Storage Applications for Power Markets

Tokyo.jpg

The choice to abandon nuclear power has led to rising electricity prices and supply issues in Japan.  In response, the country has looked to reform its electricity system to provide safe, stable electricity and control rising prices.  In the fall of 2014, Japan’s five big power companies decided to pause purchases of solar generated electricity in response to the rapid spread of solar generation.  To address this problem, the Japanese government began to encourage renewable energy generators to adopt energy storage batteries, providing funding to power companies to develop concentrated renewable projects integrating energy storage that could lower curtailment of wind and solar resources and bring stability to the grid.  In 2015, the Japanese government allocated 74.4 billion Yen to provide subsidies to wind and solar generators integrating energy storage batteries into their systems.

Japan began introducing feed-in tariffs (FIT) for stationary solar PV in 2012, resulting in rapid expansion of the country’s solar PV market.  However, the purchasing system for renewable energy and implementation of FIT brought new problems.  One example is the stability issues brought by the excessive construction and integration of solar PV into the grid.  Such issues forced grid companies to request independent solar PV power generators to add battery storage systems to improve grid stability.  Renewable energy subsidies also resulted in the increase of electricity prices, putting greater burden on ordinary customers.  In response to these problems, Japan’s Ministry of Economy, Trade, and Industry issued reforms to the renewable energy purchasing and FIT systems.  Such measures included allowing renewable energy purchasing prices to be decided by competitive bidding between companies and establishing medium- and long-term pricing goals, measures which help to clarify a timeframe for decreasing FIT prices. The continued lowering of solar PV FIT prices and the recent rise in electricity prices are factors that will contribute to customer use of self-generated solar PV, creating opportunities for greater use of energy storage to increase economic viability of such behind-the-meter solar PV systems.

4.       The Domestic Solar-Plus-Storage Applications Environment

Beijing.jpg

In contrast to the thirty years of open electricity markets in other countries, China’s “Thirty Year Power Market Reform” is still under way.  In theory, China already possesses the solar-plus-storage technologies and market conditions necessary for large scale applications.  China has begun user-to-user energy transactions, providing opportunities for customers to market their excess self-generated energy. Solar generation subsidies have also seen enormous reduction, creating an urgent need to find profit generation methods that do not rely on policy support.  Customers also show interest in reducing their reliance on the grid.  In addition, the Methods for Promoting Construction of Grid-Connected Microgrids policy stipulates that grid-connected microgrids must have a renewable energy capacity of over 50%, and the exchange of energy between microgrids and external grids should not exceed 50% of the year’s total energy use.  Demonstration projects have helped support the penetration of renewable energy into the grid, and as renewables proliferate on a large scale, demonstrations must stress the self-generation model, promoting self-sufficient systems that also make use of energy storage.

Energy storage has already become an important part of China’s energy demonstration projects, bringing attention to electricity pricing reforms and solar PV investment while  increasing the opportunities for solar PV and energy storage to be combined in hybrid applications.  At the current stage, cross-subsidization and residential power use limitations have not been enough to stimulate residential behind-the-meter energy storage applications, yet as solar PV prices continue to fall, the value of behind-the-meter solar-plus-storage applications for industrial-commercial use will become more apparent.  The movement toward an open electricity market provides new market pricing and transaction mechanisms that will help create more opportunities for solar-plus-storage applications and developments in China.  In the future, China’s solar-plus-storage developments and applications will see benefits from the retirement of current policies and the opening of the electricity market.

Author: Wang Si
Translation: George Dudley

Observing Energy Storage’s Power and Energy Applications through the CAISO and PJM Markets

bay-bridge-california-449608.jpg

According to statistics from the China Energy Storage Alliance’s Global Energy Storage Database, at the end of 2017, the United States possessed a total operational electrochemical energy storage capacity of 810.8MW.  Storage added over the past three years represents 2/3 of the current total.  Li-ion batteries account for 80% of total battery capacity.  Regionally, the combined total capacity of PJM, CAISO, ERCOT, MISO, and ISO-NE made up over 90% of the country’s total storage capacity.  The PJM region represented the country’s largest scale of energy storage in terms of power (MW), while the CAISO region represented the largest scale in terms of energy (MWh). Using information from the U.S. Energy Information Administration’s recently released “Battery Storage Market Trends” report, this article examines the characteristics of energy storage used in both the CAISO and PJM power markets.

Energy Storage in the PJM Region

PJM (PJM Interconnection LLC) became an Independent System Operator (ISO) in 1997, following the approval of the Federal Energy Regulatory Commission (FERC). PJM was later designated a Regional Transmission Organization (RTO) in 2001.  As an RTO, PJM operates and manages the power system in 13 states and the District of Columbia. The region is currently the largest centralized dispatch in the United States, and the country’s most complicated region for energy control.

The PJM region controls the United States’ largest energy storage power capacity, with current projects totaling nearly 40% of all power and 31% of all energy capacity in the United States.  Energy storage projects in the PJM region are geared toward power applications, with an average power of 12MW and an average charge/discharge time of 45 minutes.

In 2011 and 2013, the FERC released orders 755 and 784.  Order 755 required that energy storage resources for frequency regulation be compensated according to their effectiveness.  Order 784 defined the settlement and reporting policies for energy storage as a third-party resource.  With the support of these policies, PJM formulated competitive pricing and payment settlement methods for frequency regulation, creating a fast frequency regulation market.  PJM’s battery storage power capacity is largely controlled by Independent Power Producers (IPPs) who provide frequency regulation services.

Nevertheless, the rapid development of the PJM frequency regulation market also brings control system management problems.  To combat such issues, PJM revised market regulations in 2017, requiring frequency regulation services to remain neutral between energy and power, and RegD resources to no longer limit frequency regulation to short-term services.  Energy storage services were also required to lengthen their charge/discharge periods.  These market regulation updates signify that energy storage systems need to deploy at larger capacities and with longer charge/discharge periods, while also slowing the speed in which energy storage systems are installed.

Energy Storage in the California Power Market

CAISO (California Independent System Operator) is the operator of the California power market and the dispatcher for the California power grid.  CAISO provides service for 30 million California residents, controls 25,000 miles of transmission and distribution lines, and possesses a power generation capacity of over 500 million kW.

CAISO possesses the largest capacity of energy storage by energy (MWh) in the United States, with current projects covering 44% of the country’s total capacity by energy, and 18% of the total capacity by power.  California’s energy storage is largely focused on energy services, with a more varied set of applications compared to PJM.  CAISO energy storage projects have an average energy capacity of 5MW and an average charge/discharge duration of four hours.

The Pacific Gas & Electric Company (PG&E), San Diego Gas & Electric Company (SDG&E), Southern California Edison (SCE), and other investor-owned utilities (IOUs) are the principle investors in California’s energy storage.  IOUs actively promote the construction of grid-level energy storage stations and industrial-commercial customer-side storage stations while at the same time promoting shared benefit models with customers, integrating customer-side distributed energy storage resources into the power service.  SCE and SDG&E procure and use 62% of California’s total energy storage capacity.  This capacity has largely been used to counter power losses due to the Aliso Canyon gas leak, as well as to satisfy CPUC power generation demands for backup power supply of at least four hours.  California therefore has begun to trend towards development of energy storage with greater energy capacity.  In addition, California is still the primary region for the use of small-scale energy storage systems (<1MW).  90% of the United States’ energy storage systems are used in California, with commercial applications largely centered in SCE and SDG&E regions, and industrial applications concentrated mostly in PG&E regions.

In analyzing the trends in power markets such as PJM and CAISO, as well as developments in states such as California, Massachusetts, and New York, we find that revision of wholesale electricity markets and state government energy storage policies have been the two major factors in the promotion of energy storage in the United States.  Apart from FERC order 841, the major trends in the wholesale electricity market have been to treat energy storage as an independent power resource, define the model in which energy storage should take part in the power market, decrease the minimum capacity limit for energy storage to participate in the power market, allow energy storage to connect with the grid, and define energy storage duration requirements.  Among state governments, principal methods have been to create procurement plans, create economic incentives, and include energy storage as part of integrated resource plans for electric power services.

PCS Vendors Begin to Diversify Their Energy Storage Activities

In response to the rapid development of energy storage, many PCS vendors have begun expanding their business models to become more deeply involved in energy storage services.  According to the CNESA Global Energy Storage Vendor Database, China’s current PCS manufacturers can be divided into three categories.  The first group includes companies focused predominantly on solar inverters, such as Sungrow.  The second is companies predominantly focused on UPS, such as Kelong.  The final group is those who focus on energy recovery products, such as Soaring.  Data from CNESA’s Global Energy Storage Database reveals that in recent years Sungrow and other companies have become increasingly involved in energy storage projects by taking on the role of energy storage solutions providers.  Examples include:

  • In June 2017, Sungrow provided solutions for a complete solar-plus-storage system in the Maldives. The system included a PV inverter, energy storage inverter, BMS, and Li-ion battery.
  • In March 2018, Kelong provided the Baitu substation second-life battery demonstration project with an SPH series energy storage converter and EMS smart energy management system.
  • In 2013, Soaring won a successful tender to provide a PCS for China Southern Grid’s “Modular Distributed Energy Storage System Critical Technology Research Project.” Soaring will supply the project with a bidirectional energy storage converter, project plan design, and engineering services.

Current trends reveal that these and other vendors will continue to expand their activities beyond the sole supply of PCSs to diversified roles in multiple aspects of the energy storage business.

640.jpg

Sungrow was the earliest company in China to begin research, development, and production of inverter products.  According to the company’s 2017 annual report, by the end of the 2017 year, a total of 60000 MW of Sungrow’s inverter equipment was deployed worldwide.  In 2016, Sungrow and Samsung SDI joined to created Samsung-Sungrow and Sungrow-Samsung companies.  Sungrow-Samsung’s range of business includes the production and sale of energy storage inverters, Li-ion batteries, and energy management systems (EMS), among other products.  Production began in July of 2016 and has reached an annual production capacity of 2000MWh of electric energy storage equipment.  The production of batteries for energy storage is significant in that it allows Sungrow to provide system integration services that not only make use of its own PCS system, but also a battery produced by its joint venture company, ensuring a stable product supply and convenient and accurate assembly during systems integration.  In 2017, Sungrow began promoting its “inverter-plus-storage technology” solution.  The service not only lowers the cost of the system, but also provides more efficient energy generation through the system’s integrated functionality.  Sungrow has also built a reputation in photovoltaics, energy storage, wind power, electric vehicles, and similar areas, which has helped the company’s energy storage solutions achieve better recognition and acceptance among customers.

Kelong has established a name for itself as a PCS provider with over 30 years of industry experience.  The company has three main business sectors.  Kelong’s core is its “Energy Foundation” business, including high-end UPS, customized power sources, military and industrial power sources, and automated power systems.  The second sector is the “Cloud Computing Service,” including data center, data protection, and cloud resource services.  The final category is the “Renewable Energy” business, including solar and wind generation, energy storage, microgrids, and electric vehicle charging systems.  In energy storage, Kelong’s main focus has been PCSs, supplemented by research in energy routers and microgrid technologies in order to increase competitiveness in the storage market.  In residential storage, Kelong provides a 2-5kW residential PV inverter system (SPH).  The system’s functions include self-generation, load shifting, backup power, and others.  Kelong has expressed the advantages of using technologies from the same production source, expanding and diversifying business activities to transition from equipment supplier to systems solutions and service platform provider, from equipment manufacturer to a manufacturer of advanced technologies and services models.

Soaring represents China’s first company to provide energy recovery and energy storage microgrid system solutions.  Soaring’s ES-500K and ES-250k bidirectional converters are specialized for smartgrid construction.  Soaring has also researched and designed its own monitoring software for energy storage stations.  In providing customers with complete storage solutions, Soaring is able to utilize its own core energy storage converter technology, energy management system, and other equipment, as well as its own software system.  Core product technologies and specialized integrated systems and services has helped increase Soaring’s competitive advantage.

PCS providers have begun to make the switch from the supply of a single equipment type to a comprehensive solutions model.  This represents not only the individual development of these companies and the increasing diversity of the industry, but also reflects their technological advantages and accumulation of resources for energy storage applications.  As consumers place greater needs on energy storage equipment providers for more comprehensive and diverse services, companies that are able to provide a diversified services model will have the biggest competitive advantage in the industry.

Energy Storage Market Developments in the Middle East

backlit-dawn-desert-774835.jpg

Middle Eastern regions have been famous for their large oil and gas reserves for as long as anyone can remember.  Though the region’s solar resources are also plentiful, when it comes to renewable energy, developments in the Middle East have been relatively sluggish.  In recent years, as PV prices have dropped and the pressure of relying on a single source of energy has grown, these countries have begun looking beyond their oil and natural gas reserves and have established development goals for renewable energy.  At the same time, opportunities for energy storage combined with renewable energy have begun to appear.  Beginning in 2017, Middle Eastern countries including Jordan and Saudi Arabia have begun deploying energy storage projects.

Saudi Arabia Combines Energy Storage with Renewable Energy to Cast Off Reliance on Oil

In the past, Saudi Arabia was once the world’s top oil producer.  Yet with domestic energy demands increasing, so has the pressure on oil supplies, making development of renewable energy a necessity.  Saudi Arabia has previously announced plans for a 100% transformation from fossil fuels to clean energy within the next few decades.  According to CNESA data tracking, Saudi Arabia’s National Renewable Energy Program managed by the country’s Ministry of Energy, Industry, and Mineral Resources has announced a goal of 3.4GW of renewable energy capacity by 2020, with an additional goal of 9.5GW of renewable energy infrastructure set for 2023.  In 2017, SoftBank Vision Fund and the Public Investment Fund of Saudi Arabia signed a memorandum focused on the development of solar-plus-storage.  The memo declares a goal of 3GW of solar-plus-storage projects by 2018, which will contribute to the long-term development of renewable energy Saudi Arabia.  In March 2018, SoftBank announced plans to construct the world’s largest solar plant in Saudi Arabia.  The plant is intended to contribute to the “Vision2030” plan.  Such measures will help alleviate Saudi Arabia’s domestic dependence on oil.

Jordan Harnesses Renewable Energy and Energy Storage to Realize Energy Independence

In contrast to the abundant oil and gas resources of Saudi Arabia, Jordan possesses no oil reserves.  Energy shortages have led to overreliance on diesel imports.  To avoid reliance on traditional fossil fuels, the demand for development of renewable energy applications has become strong.  In 2017, Jordan’s Ministry of Energy and Mineral Resources selected 23 out of 41 bidders as candidates for the 2018 signing of a memorandum planning for a 30MW energy storage project.  The project’s total investment is set at approximately 4 million USD, with an anticipated completion date of mid-2019.  The project is intended to alleviate fluctuations to the grid caused by large scale wind and solar generation, stabilizing transmission and distribution networks.

Jordan’s solar energy provider Philadelphia Solar has also announced plans to launch a battery storage system at a large-scale solar generation plant in the Mid-East region.  In early August of 2017, Philadelphia Solar subsidy Al Badiya signed a 20-year PPA with Irbid District Electricity Company.  At present, this is the largest energy storage power station project in the Middle East.  Construction is expected to be completed and commercial operations to begin in the 4th quarter of 2018.  The project will consist of 34,350 polycrystalline panels and a 12MWh Li-ion battery energy storage system.

Summary

At present, governments in the Middle East are actively pushing for the development and utilization of renewables, with many establishing renewable energy development goals.  Egypt, the United Arab Emirates, Saudi Arabia, Jordan, and other countries in the region have all deployed energy storage systems.  In the future, as renewable energy continues to grow in scale, demand for energy storage as a method of stabilizing wind and solar generation in the grid will increase.  As the use of clean, natural energy sources in the Middle East becomes more prevalent, the region will increase its energy independence while at the same time decreasing consumption of traditional fossil fuels.

Tracking the Storage Industry: Why Have So Many Energy Giants Entered the Storage Market?

The China Energy Storage Alliance’s Industry Tracking database has traced an ever increasing number of new companies entering the energy storage market since 2016.  At present, the newest entrants into the energy storage business can be divided into two categories: international oil and natural gas companies such as Shell and BP, and large electric power utilities such as E.On.

This article tracks the recent activities of the above-mentioned companies, tracing their involvement in energy storage and reasons for entering the storage market and using such analysis to help understand the current trends in the entire energy storage industry.

 

1.       Oil and Natural Gas Companies Such as Shell Enter the Energy Storage Market

1.1  Oil and natural gas companies begin transformation into comprehensive energy providers, seeking new business methods to combat poor performance caused by declining oil prices

Oil and renewables have often been viewed as incompatible forms of energy, yet in recent years many leading international oil and gas companies have released plans and targets for development in the renewables sector.

Table 1. New Energy Business Development Plans for Major Oil and Gas Companies

Chart 1.png

Such conditions have led Shell, BP, and other companies to began putting major effort and investment into New Energy business not only to offset poor performance due to low oil prices, but also to find new opportunities for business growth.  For example, in September 2017, Shell acquired Texas-based wind, solar, and fuel gas developer MP2 Energy, planning to expand the company’s distributed energy and demand response businesses.  MP2’s New Energy business is expected to grow from 200 million USD to 1 billion USD by 2020.

 

1.2 International oil and gas companies are also engaging in energy storage as a means to build on strengths and more fully develop New Energy business

Table 2: Summary of Major Oil and Gas Company Energy Storage Activities

Chart 2.png

Total has concentrated efforts on developing solar power and has been a leader in Europe in biofuel technology.  The company’s collaboration with Saft provides benefits for nickel and Li-ion battery design and manufacturing businesses.

Shell has focused efforts on developing wind and hydrogen energy, incorporating electric vehicle charging as a part of such business.

BP is looking towards biofuels as its primary direction for New Energy development.  Current collaboration with Tesla on wind farm energy storage allows BP to make more informed decisions when evaluating and developing future battery storage projects.  BP has at the same time begun developing new low-carbon business activities to expand its involvements in New Energy development.

Finally, ExxonMobil has emphasized investments in biofuels and carbon capture and storage technology.  Collaboration with Fuel Cell Energy has focused on research and development of fuel cell technology. Current fuel cell applications have primarily been concentrated on portable power supplies, mobile power supplies, and small-scale custom power supplies.

 

2.       Large Electric Power Utility Providers Such as E.ON Enter the Energy Storage Market

Table 3: Summary of Major Electric Power Utility Energy Storage Activities

Chart 3.png

The above table shows that from March 2016 to April 2018, Enel and other electric power utility companies engaged in a variety of energy storage business activities, including the construction and operation of new storage projects.  There are two main reasons for these activities:

2.1   Energy storage technology has proven itself beneficial to the energy transition and an important component of large-scale renewable generation and grid integration

The Paris Agreement signed at the Paris Climate Change Conference on December 12, 2015 included China, the United States, Russia, and numerous other countries.  The agreement specifies actions for combating global climate change by 2020.  The primary goal of the Paris Agreement is to keep this century’s global average temperature from rising more than 2 degrees Celsius while at the same time limiting the global temperature increase to within 1.5 degrees Celsius above pre-industrial levels.  The most direct method to combat the rise in temperature is to decrease carbon emissions.

In light of this agreement, power utilities such as E.ON must begin turning their primary business models away from carbon-intensive power generation to low-carbon power generation business models.  As a result, Engie, E.ON, and other companies have announced low-carbon power generation plans.

The key to the energy transition is scalable renewable energy.  Current global renewable energy resources are extremely abundant, particularly solar and wind power.  Data suggests that if earth were able to harness 1/6000th of the energy released by the sun’s rays, or 1/500th of the energy created by the earth’s winds, then the entire global economic demand for energy could be met.  Yet despite the enormous potential for renewable energy, its lack of stability hinders large-scale development and applications.  Solar and wind curtailment are also common problems.  However, with energy storage, renewable energy issues such as variations in voltage and frequency can be managed, and wind and solar curtailment can be reduced.

Application example:

E.ON has recently announced that its two 9.9MW Li-ion battery storage projects in Texas have begun operation.  The projects, known as the Texas Waves Energy Storage Projects, are located at E.ON’s Pyron and Inadale wind farms near Roscoe in eastern Texas.  The projects provide ancillary services for ERCOT, provide rapid response to power demand changes, and increase the stability and efficiency of the grid.

2.2 Energy storage can provide a variety of services to power grids, including increased grid efficiency, optimization of current resources, and effective integration of newly added renewable resources

In traditional grid planning, rising peak energy demands are handled through addition of new infrastructure to meet capacity needs, leading to issues of excessive construction and a decrease in system efficiencies.  Maintenance and upgrade of transmission and distribution infrastructure is the largest expenditure for electric utility companies, yet aside from expensive investments, traditional methods for expanding grid capacity provide no alternative solutions.  However, the installation of low-cost, intelligent behind-the-meter distributed resources and energy storage can open new doors for harnessing the full potential of current infrastructure.

Application example:

In order to avoid investing in large-scale grid upgrades, New York state required utilities to research solutions for T&D upgrade deferrals, with energy storage among possible solutions.  The Marcus Garvey apartment project is a classic case study arising from the incentive policies of New York state’s climate change bill.  In Arizona, APS has made plans to utilize AES’s 2MW/8MWh energy storage project to offset the need for 20 miles of line upgrades in remote areas caused by load increases.  The project will cut fixed-asset investment cost by half.  Unlike the New York project’s focus on innovation, the Arizona project is focused entirely on economic benefit.

Conclusion

As the global energy transition continues, major global energy companies will continue to devote business to energy storage.  The advantages and resources of such large companies is certain to provide many new opportunities and a positive development outlook for energy storage.

CNESA Global Energy Storage Market Analysis – 2018 Q1 (Summary)

1.   The Global Market

In the first quarter of 2018, the global electrochemical energy storage market experienced a growth of 94MW, a decrease of 37% from Q1 of last year.

In a regional comparison, the United Kingdom showed the greatest increase in new energy storage capacity, at 54.5MW.  The United States followed closest behind in new growth.  Installations in the United Kingdom and the United States were primarily devoted to ancillary services applications, with such applications making up 99% and 60% of the United Kingdom and the United States’ total installations, respectively.

Graph 1.png

In distribution of applications, ancillary services displayed the highest operational capacity at 73.8MW, or 79% of the total, an increase of 228% from Q1 of 2017. Behind-the-meter and renewable integration applications were second and third at 14% and 7%, respectively.

In a comparison of technologies, Li-ion batteries held the highest capacity at 93.7MW, or 99.7%.  Li-ion batteries were distributed throughout a variety of energy storage applications, with the largest portion concentrated in ancillary services applications, at 79%.

2.   The Chinese Market

China’s newly installed electrochemical capacity was relatively small in the first quarter of 2018, therefore the below analysis focuses only on projects that are newly planned/under construction.

In a regional comparison, projects newly planned/under construction were largely distributed in the areas of Xinjiang, Tibet, Jiangsu, and Inner Mongolia.  Of these regions, Tibet and Xinjiang possessed the largest installations, both at 100MW and utilized in renewable integration applications.

Graph 2.png

In applications newly planned/under construction, the largest capacity was concentrated in renewable integration, at 200MW, or 88% of total applications.  Behind-the-meter and ancillary services applications were second and third, at 8% and 4%, respectively.  Of these applications, renewable integration and ancillary services both relied completely on Li-ion batteries.  Behind-the-meter applications relied primarily on lead-acid batteries, at 89% of the total.

In technologies, projects newly planned/under construction were primarily Li-ion battery and lead-acid battery based, with Li-ion batteries comprising the largest capacity at 211MW, or 93% of the total. Li-ion battery usage was distributed amongst renewable integration, ancillary services, and behind-the-meter applications, with the most prevalent usage seen in renewable integration, at 95%.

3.   About this Report

The complete version of our Global Energy Storage Market Tracking Report (2017) can be downloaded from the CNESA ES Research website.

The ES Research website was launched January 18, 2018.  The site provides accurate, authoritative, and up-to-date market data analysis and information on the energy storage industry.  Please visit the website at www.esresearch.com.cn or scan the QR code below to learn more about the research services we offer.

QR CODE.png

For questions or concerns, please contact the CNESA research department:

Telephone: +86 010-65667068

Email: na.ning@cnesa.org

ESIE 2018 – Who Should Foot the Bill for Energy Storage? An Immature Market Mechanism Remains the Largest Obstacle to Energy Storage Proliferation

Author: Deng Huiping        China Electric Power News

挑选-5.jpg

It has been over a year since the release of the “Guiding Opinions on Promoting Energy Storage Technology and Industry Development,” and within the New Energy industry, the lack of a mature market mechanism remains the major factor inhibiting the spread of energy storage.  The market mechanism described in the “Guiding Opinions” – “payment according to effectiveness, with the beneficiary covering the cost” is one that still requires ongoing support and development.

Who Should Benefit? A Fierce Debate

Energy storage is a critical component to an “intelligent” grid and an energy system dominated by renewables.  Energy storage plays an important role in the stabilization of renewable energy, consumption of clean energy sources, participation in peak shaving and frequency regulation, ensuring grid safety and stability, lowering grid infrastructure costs, and more.  However, due to high equipment costs and debates over who should reap the benefits of energy storage, the development of what should be a very popular component to the energy system has instead been slow moving.

Some countries with developed power markets have seen the competitive use of frequency regulation, leading to its widespread applications.  Amongst China’s thermal power plants, energy storage as a part of peak shaving, frequency regulation, and other ancillary services has already begun to see some acceptance from the market.  The addition of energy storage equipment to thermal power plants allows for more accurate, speedy, and effective peak shaving and frequency regulation response, while also lowering the cost of the services and generating a profit for the plant. The spread of energy storage to thermal power plants has therefore been a relatively smooth process, though applications have still been few and of small scales.  The reason for this slow progress has been the lack of enthusiasm amongst electricity generators, the grid, and others involved in the power system to invest in New Energy storage equipment due to the continuing debate over who should receive the profits from energy storage. 

During a presentation at ESIE 2018, China Energy Storage Alliance Chief Supervisor Zhang Jing noted that New Energy power generators feel that because energy storage can balance electricity generation, lower off-peak generation, ensure grid safety and stability, and lower investment costs for infrastructure, therefore, the power grid should pay the cost for energy storage.  Yet grid operators feel that the price for New Energy electricity is already high enough, and since energy storage helps to promote the production of New Energy electricity, the New Energy electricity generators should naturally foot the bill for energy storage.

Jiang Liping, Vice Dean of the State Grid Energy Research Institute, stated that State Grid has never viewed power generation from New Energy sources as an independent source of power, citing lower stability and higher costs than power generated from thermal plants.  Therefore, the grid does not wish to foot the bill to install energy storage technology in New Energy generation stations, as the number one duty and responsibility should be providing stable electricity.

Although at present the price of New Energy is higher than that of thermal power, due to the large investment cost and long rate of return, many New Energy power generation plants still have a low profit margin.  In such a case, adding energy storage equipment would not be economical, and therefore there is little enthusiasm to do so.

挑选-10.jpg

The Market Mechanism Still Requires Strengthening

On the one hand, most people recognize the potential of energy storage in New Energy generation, ancillary services, microgrids, behind-the-meter applications, the energy internet, and other applications.  On the other hand, enthusiasm remains low and popularization remains difficult.  Zhang Jing stated that conquering this obstacle will require further work in strengthening energy storage market and pricing models, thereby making the value of energy storage more obvious to everyone.

Many experts share this same view.  Currently, much of the value and benefit of energy storage is still unclear. Energy storage’s value must be clarified for all stages, including generation, transmission, distribution, and usage.  An open electricity market and flexible market pricing mechanism will help promote energy storage’s commercial value.  Xie Kai, Vice Director of the Beijing Power Exchange Center, stated that strengthening the energy storage market mechanism is of utmost importance.  As he explained, in countries that have already established a complete energy storage market mechanism, the development of energy storage has been rapid.  One example from abroad is a frequency regulation compensation mechanism that shrinks the investment return for energy storage equipment from 5-8 years to 2-3 years.

In this regard, the effects of the Guiding Opinions will gradually make themselves known.  The Guiding Opinions clarifies several issues regarding energy storage, including the path for policies that encourage the development of energy storage, the identity of energy storage, the investment and management system of energy storage, and the responsibilities of energy storage demonstrations.  This gives a visible outlook for investors, helping to stimulate the market.

A representative from the National Energy Administration described plans to continue to advocate for energy storage development in four ways.  First, through improving relevant policies and mechanisms.  Second, promoting technological advancements and lowering costs. Third, through organization of energy storage demonstrations encouraging companies to innovate in technologies, business models, and large-scale applications. Fourth and finally, through the improvement of relevant standards.

ESIE 2018 Finishes its 7th Year - Highlights from the Event

ESIE 2018 Opening Ceremony

ESIE 2018 Opening Ceremony

The 7th Annual Energy Storage International Conference and Expo (ESIE 2018) opening ceremony on April 3 began with a speech by National Energy Administration Vice Director Liu Yafang emphasizing energy storage industry and technology development as key to the energy revolution. Her speech suggested four ways to advance the industry: promotion of government policies and mechanisms, increased technological innovation, launching of new demonstrations, and strengthening of industry management and services.  Vice Chairman of the China Energy Research Society Shi Yubo presented four main points of focus for the development of the energy storage industry, including the building of a policy mechanism for energy storage, increasing the participation of energy storage in the electricity market, increasing innovations in energy storage technology, and increases in project demonstrations and dissemination of information on energy storage. Tsinghua University Professor and former State Council Member Wu Zongxin, Chinese Academy of Sciences International Cooperation Department Director Cao Jinghua, and CNESA Chairman and China Energy Research Society Committee Chair Chen Haisheng also delivered welcome addresses.  Chinese Academy of Sciences Scholar and China Electric Power Research Institute Honorary President Zhou Xiaoxin delivered a keynote speech entitled “Development Prospects for China’s New Generation of Energy Systems.”  Chinese Academy of Engineering Scholar and Chemical Defense Research Institute Researcher Yang Yusheng followed with a keynote entitled, “System Safety Issues in Large-Scale Electrochemical Energy Storage Systems.”  CCTV-Finance reporter Ping Fan served as host for the first half of the opening ceremony.

National Energy Administration Vice Director Liu Yafang Delivers the Opening Speech

National Energy Administration Vice Director Liu Yafang Delivers the Opening Speech

Tsinghua University Professor and Former State Council Member Wu Zongxin Delivers a Speech

Tsinghua University Professor and Former State Council Member Wu Zongxin Delivers a Speech

Chinese Academy of Sciences International Cooperation Department Director Cao Jinghua Delivers a Speech

Chinese Academy of Sciences International Cooperation Department Director Cao Jinghua Delivers a Speech

CNESA Chairman and China Energy Research Society Committee Chair Chen Haisheng Delivers a Speech

CNESA Chairman and China Energy Research Society Committee Chair Chen Haisheng Delivers a Speech

Vice Chairman of the China Energy Research Society Shi Yubo

Vice Chairman of the China Energy Research Society Shi Yubo

Chinese Academy of Engineering Scholar Yang Yusheng

Chinese Academy of Engineering Scholar Yang Yusheng

Chinese Academy of Sciences Scholar and China Electric Power Research Institute Honorary President Zhou Xiaoxin Delivers His Keynote Speech

Chinese Academy of Sciences Scholar and China Electric Power Research Institute Honorary President Zhou Xiaoxin Delivers His Keynote Speech

Chinese Academy of Engineering Scholar and Chemical Defense Research Institute Researcher Yang Yusheng Delivers His Keynote speech

Chinese Academy of Engineering Scholar and Chemical Defense Research Institute Researcher Yang Yusheng Delivers His Keynote speech

 “Build a Market Mechanism for Energy Storage, Create a Blueprint for Industry Development” served as the theme for this year's conference. Over 120 domestic and international speakers and over 60 exhibitors were in attendance. The conference focused on three main events—the exhibition hall, innovation competition, and conference forums. The variety of events and programs provided a platform for communication between policymakers, planners, grid managers, power companies, energy service providers, and numerous other businesses and organizations involved in energy storage.

The opening ceremony was followed by the International Innovation Competition Awards Ceremony, industry expert dialogues, and the release of CNESA’s 2018 industry white paper.  The April 3 events drew over 3000 industry guests from China, the United States, Germany, Australia, Korea, Japan, and more.

2018 International Energy Storage Innovation Competition Awards Ceremony

Following the opening ceremony speeches came the exciting announcement of the winners of the second International Energy Storage Innovation Competition.  This year’s five categories included the “2018 Top 10 Technology Innovations Prize,” “The 2018 Top 10 Applications Innovation Prize,” the “2018 Energy Storage Distinguished Individuals Award,” the “Jury Grand Prize,” and the “Team Participants Award.”  The awards honored those companies and individuals who made outstanding contributions to energy storage in 2017.  The Jury Grand Prize was awarded to BYD Motor’s 31.5MW/12.06MWh Beech Ridge frequency regulation project in West Virginia.

Winners of the 2018 Top 10 Energy Storage Technology Innovations Award

Winners of the 2018 Top 10 Energy Storage Technology Innovations Award

Winners of the 2018 Top 10 Energy Storage Applications Innovations Award

Winners of the 2018 Top 10 Energy Storage Applications Innovations Award

Winner of the Jury Grand Prize: BYD Motors’ 31.5MW/12.06MWh Beech Ridge Frequency Regulation Project in West Virginia.

Winner of the Jury Grand Prize: BYD Motors’ 31.5MW/12.06MWh Beech Ridge Frequency Regulation Project in West Virginia.

Five industry leaders were awarded the 2018 Energy Storage Distinguished Individual Award, including Birmingham University Professor and Founder and Editor-in-Chief of Energy Storage Science and Technology magazine Ding Yulong, Chinese Academy of Sciences Institute of Thermophysics Researcher Huang Xuejie, BYD Electric Power Institute Chief Engineer Zhang Zifeng, Beijing Puneng Energy President Huang Mianyan, and Beijing Ray Power CEO Mou Liufeng.

Winners of the 2018 Energy Storage Distinguished Individual Award

Winners of the 2018 Energy Storage Distinguished Individual Award

Energy Storage Industry White Paper 2018 Officially Released

The opening ceremony featured the release of CNESA’s Energy Storage Industry White Paper 2018, announced by CNESA chief supervisor Zhang Jing.  Included in the white paper is a list of the companies with the highest operational energy storage capacity for 2017.  Of these companies, Narada Power topped all lists.  According to white paper statistics, the top five technology providers for newly installed electrochemical energy storage capacity included (from highest to lowest capacity) Narada Power, Shuangdeng, Sacred Sun, ZTT, and Samsung SDI.  In terms of MW capacity, the top five energy storage system integrators (from highest to lowest capacity) included Narada Power, Sungrow-Samsung, CLOU, Shuangdeng, and ZTT. In terms of MWh generation, the top five energy storage system integrators (from highest to lowest) included Narada Power, Shuangdeng, ZTT, Sungrow-Samsung and CLOU.

China Energy Storage Alliance Chief Supervisor Zhang Jing Announces the Release of the  2018 Energy Storage Industry White Paper

China Energy Storage Alliance Chief Supervisor Zhang Jing Announces the Release of the 2018 Energy Storage Industry White Paper

Industry Leader Dialogues: New Coordinates for the Development of the Energy Storage Industry

Tsinghua University Professor of Electrical Engineering and Deputy Committee Chair of the China Energy Research Society Expert’s Committee Xia Qing hosted the “New Coordinates for the Development of China’s Energy Storage Industry” dialogue.  Distinguished industry leaders such as State Grid Electric Vehicle Service Co. Vice General Manager Que Shifeng, National Energy Administration Division of Technology Director Qi Zhixin, Beijing Power Exchange Vice Director Xie Kai, State Grid Energy Research Institute Vice Dean Jiang Liping, Sungrow Power General Manager Wu Jiamao, Chinese Academy of Sciences Institute of Physics Researcher Huang Xuejie, Narada Power President Chen Bo, and Beijing Soaring Electric Technology Co. Chairman Wang Shicheng attended the panel discussion, sharing thoughts on technological development, market needs, and policy mechanisms for the energy storage industry.  The discussion provided those in attendance with an insider look at the state of energy storage development, how market mechanisms can be created, and how local markets are expected to develop in the future.

Industry Leaders Take Part in the Expert Dialogue

Industry Leaders Take Part in the Expert Dialogue

ESIE 2018 Expo: An Exhibition of the Top Names in Energy Storage

ESIE’s three-day energy storage expo officially opened on April 2.  This year’s exhibitors included displays from upstream energy storage equipment manufacturers, systems integrators from a variety of applications, power grid representatives, testing organizations, and energy storage research institutions. Leading energy storage enterprises domestic and international set up booths, including domestic enterprises such as State Grid Electric Vehicle Co., Sungrow, Shuangdeng Group, Dynapower, Narada, Tianjin Lishen, Soaring, CLOU, BYD, ZTT, Hyperstrong, Today Energy, and more.  International enterprises and organizations such as NEC, ABB, TÜV SÜD, NGK, the India Energy Storage Alliance, and Primus Power also brought their technologies, products, and services to the expo hall.

16.jpg
17.jpg
Industry Experts and Leaders Tour the Expo Hall

Industry Experts and Leaders Tour the Expo Hall

Thank you to all the exhibitors, sponsors, and attendees who helped make ESIE 2018 a success! We will see you again next year at ESIE 2019!

ESIE2018: CNESA Releases the 2017 Chinese Energy Storage Company Capacity Rankings, Narada Power Tops the List

On April 3, the China Energy Storage Alliance kicked off the 2018 Energy Storage International Conference and Expo at the National Convention Center in Beijing.  The opening ceremony featured a presentation by China Energy Storage Alliance Chief Supervisor Zhang Jing announcing the release of CNESA’s Energy Storage Industry White Paper 2018.  This year's white paper features a list of the top five technology providers and systems integrators both domestic and international.

China Energy Storage Alliance Chief Supervisor Zhang Jing Announces the Release of the  Energy Storage Industry White Paper 2018

China Energy Storage Alliance Chief Supervisor Zhang Jing Announces the Release of the Energy Storage Industry White Paper 2018

The lists rely on data provided primarily by the CNESA Global Energy Storage Project Database, as well as publicly available project information and information provided voluntarily by companies.  The lists are focused on the newly installed capacity of energy storage technology providers and systems integrators in the year 2017.

The “technology providers” category, as defined by CNESA, includes companies that provide energy storage technologies, battery modules, and battery systems.  The “systems integrators” category includes companies that are involved in the energy storage systems integration business, providing customers with a complete energy storage system.  Such products include BMS, PCS, EMS and all other components that are needed for a complete set of equipment.

China’s Energy Storage Market List

In 2017, among China’s newly added electrochemical energy storage projects, the top five technology providers with the largest new capacity included Narada Power, Shuangdeng, Sacred Sun, ZTT, and Samsung SDI.

China’s Top Technology Providers for 2017 (MWh)

China’s Top Technology Providers for 2017 (MWh)

In 2017, among China’s newly added electrochemical energy storage projects, the top five systems integrators in terms of MW capacity included (in order from greatest to least) Narada Power, Sungrow-Samsung, CLOU, Shuangdeng, and ZTT.  In terms of MWh capacity, the top five systems integrators included (in order from greatest to least) Narada Power, Shuangdeng, ZTT, Sungrow-Samsung, and CLOU.

China’s Top Systems Providers for 2017 (MW)

China’s Top Systems Providers for 2017 (MW)

China’s Top Systems Providers for 2017 (MWh)

China’s Top Systems Providers for 2017 (MWh)

From the rankings, it is clear to see that the 2017 Chinese energy storage market’s most active areas continued to be Li-ion battery and lead-acid battery manufacturers and systems integrators.  Also of note is that the companies making the lists are predominantly those that serve the role of both technology provider and systems integrator.  Of these, Narada Power stands out as the clear leader in installed capacity, sitting at the top of all three lists.  ZTT occupied the top spot in energy generation (MWh) as both technology provider and systems integrator, while Sungrow-Samsung occupied the top of the list of Li-ion battery systems integratiors in terms of power (MW) capacity.