Distributed PV+Storage Session
Microgrids have grown at 24% CAGR over 2 years, and China's energy storage distributed generation and microgrid markets have grown at 64% CAGR over that same period.
WANG Sicheng of China NDRC (National Development and Reform Commission) Research Institute said that ES supporting policy is coming; and that the industry can expect subsidies.
Hubei Zhuiri Electric Co. VP LI Hengjie discussed the opening of new energy bus demo programs in Lasa (Tibet) and Nanjing Jinlong. There, a full 8 hours of PV can provide about 20% of the busses’ energy.
LI Daixin of CNESA: By 2020: 5M EVs, with 5-8 years of battery live; by 2025, these cars will reach 215GWh, with recoverable materials reaching 2.9M tons – which is huge and a huge market capacity for second life batteries and recycling/recovery.
Pre-Conference News - China's Retail Electricity Market Reforms
In March 2015, Policy No. 9 (Opinions on deepening electric system reforms) was released, beginning a new round of electric system reforms. One important direction is “the orderly opening of a competitive electricity pricing environment (excluding T&D pricing); and the orderly shift towards non-government capital (social/private capital) in developing distribution and retail services”, is a major topic. One year after Policy No. 9’s release, as of February 2016, 274 retail electric companies had been established nationwide (North Star Electric Grid Statistics Database). Of these, Guangzhou Huikai Electric Services Co., and Chongqing Liangjiang Changxing Electric Company, in February 2016 for the first time began retail services.
Retail reforms are continuing to be advanced, but at present effective retail side reforms, policy directions, etc., are problems of general concern. How to increase flexibility in the market environment, opening it to new power products, service models, and business models? Can the ES industry find opportunities in the retail side, and in what potential markets? Energy Storage China 2016 speakers Professor WANG Peng, Director CHEN Zheng, and Mr. JIANG Diandong addressed these issues.
Professor WANG, North China Electric Power University, recognized that under present conditions, the electric reforms are facing complexities, such as: weak electric demand with slow medium growth; relying on investment stimulation, with excess electric supply; curtailed wind, curtailed hydro, curtailed solar inflexibility, and insufficient renewables integration/market participation; coal prices low providing larger profit space, but local economies lag in reducing commercial and industrial prices; grid profit models are changing, causing conflicts in losses between upstream and downstream operation, etc. China’s reforms are a ‘war of attrition’ (prolonged effort), requiring 5-10 years, with building on experiences, struggling, stalemate stages, and only then will completion be reached.
Prof. Wang identified 7 types of actions/entries into retail markets: 1) independent retail electric companies using internet of energy + light installations; 2) asset-linked user-anchors; 3) integration of public utility resources; 4) energy efficiency service company (ESCO) contracted energy management; 5) increased supply and expanded consumption by grid companies; 6) generation company activities; 7) aggressive marketing by large-cap actors.
For ES, profitable business models for frequency regulation have already been realized, with one example being Huabei Electric Grid Ray Power Co.’s energy storage frequency regulation project’s favorable results and effectiveness. Dongbei Electric Grid hopes to begin operation of an Ancillary Service Market next year (2017), which could provide more development opportunities for ES.
Director CHEN Zheng of Southern Power Grid Clean Energy Institute spoke on The Transmission and Distribution Reform, which began in Shenzhen in November 2014. Inner Mongolia, Anhui, Hubei, Ningxia, Yunnan, Guizhou, Beijing, Tianjin, and 19 provinces and cities have begun similar efforts, and it is likely that all of China will be under this system by 2017. The T&D reforms will greatly lower electricity prices. In Shenzhen’s case, in the first management period (2015-17), average T&D prices have reduced over 1c CNY from 0.1558CNY/kWh in 2014 to 0.1435, 0.1433, 0.1428 CNY/kWh.
In the retail electric reforms, as of February 2016, Shenzhen had already established 18 retail electric companies, including Shenzhen Qianhai Shekou Free Trade Area Power Company, which has become China’s first distribution incremental joint venture power supplier. Guangdong has established 37 retail electric companies, which aim to provide the province’s 2016 direct trading capacity target of 42.0B kWh. Industry actors recognize that retailer licences are not being issued, and retail electricity has not actually begun [butong]; retail electric companies that have already filed with Guangdong Province Economy and Informatization Commission can already participate in direct trading. In March 2016, the first retail company executed a direct trade; 8 retailers have already completed direct trades, totaling 680M kWh, accounting for 64.9% of Guangdong’s direct purchases (these 8 retailers account for 64.9% of direct purchases, which they then sell directly to users; the other 35.1% of procurements are made by other users (not retailers)).
For ES in distributed generation or microgrid applications, there is the possibility of participating in retail side reforms. <Replies in support of the Chongqing Municipality and Guangdong Province retail side reform pilot> recommends that Guangdong should include the following in the <Pilot Plan>: Users with distributed energy or microgrids can commission/entrust retailers as representative agents for purchasing and selling electric services.
Regarding ES opportunities in the electricity markets, Mr. JIANG Diandong of OneCloud said that the retail electricity market will become a market space of trillions. Over 2014, China’s average retail electricity price was 0.492 CNY/kWh, totaling 5.52 trillion kWh, with the nationwide retail market totaling 2.72 trillion CNY. Excluding first tier industries and urban+rural home usage, the market capacity was about 2.3 trillion CNY. This ENORMOUS market brings great opportunities to retail electricity and great development space to retail electric companies and the supporting industrial chains.
However, at the same time, retail electric companies also face fierce challenges and competition, with specialized and diverse complicating issues that they must resolve. Retailers must gradually address the positioning the company, profit model, service model development, and customer retention in seeking development space.
Emerging Technology Session
Ambri: liquid metal batteries - long life, high capacity, high power, low cost battery. With the exception of the already commercialized Mb-Sb system, Li-Sb-Pb systems also have good functionality. The company is currently working on industrial processes and developments for sealing and corrosion due to the battery’s high operating temperatures.
Researcher CHEN Haisheng - CAES technology - At present, SustainX, Highview, General Compression, and China Academy of Sciences Institute of Engineering Thermophysics (CAS IET) have installed MW-level projects, and are working towards 10-MW level and 100 MW level.
Tsinghua University Professor DAI Xingjian introduced the 1MW 60MJ flywheel ESS projectin the Zhongyuan Oilfield drill-rig peak-shaving system, where it provides energy recycling. Currently 1MW modules are used, and can already be expanded to the 10 MW and 100 MW levels. However, a critical problem is finding suitable sub-second high power and small capacity.
Heindl Energy’s Dr. Eduard Heindl introduced their gravitational ES technology, in which a 100m diameter stone cylinder with hydraulics would store GWh capacities with 8-14 hour storage durations.
Scholar WANG Zhonglin spoke on the self-powering concept, where micro/nanometer piezoelectric effects and friction generate electricity aggregated to create large amounts of energy via collecting the power of huge amounts of nanometer friction generators. This could be used in clothing, vehicle tailpipes, wind generation, heart monitors, and other fields, in a principle he called ‘Blue Energy’.
Global Energy Storage Market Session
Australia market – Craig Chambers: Australia’s ES market relies on policy, subsidies and financing. In the last 5 years, Australia has 4GW of rooftop solar generation; by 2035 Australia will reach 400,000 customer sited ESS units. With the economics of ES rapidly improving given the pricing conditions of Australia, the ES market will grow extremely rapidly – primarily at end user consumption. Modes of distributed PV+ES will expand greatly.
Germany – Ms. YE Lijuan: Germany has installed over 30,000 ES units, with 16,000 sold in 2015 – more and more users and businesses are using customer-sited ES and tapping Germany’s ES subsidy. Large-scale smart grid ES will exceed 140MW in 2017. With ES adding functionality to PV, Germany’s total market capacity will exceed 400 GW.
Japan – Mr. LIANG Xiao: By 2020, the Japanese government wants renewables to have a 20% market share, at present it is only about 3.2%. Thus, ES will have a lot of development in Japan in the next few years, and will create a HUGE market for ES. Government and enterprise are working vigorously to reform the electric structure and improve ES technology capabilities. Japan’s retail electricity market, as of April 1, 2016, has implemented liberalization.
India – Dr. Yashodhan Gokhale: India has huge solar and wind industries, and the grid has lots of shortages and interruptions, leading to opportunities for the ES market. In India’s grid, ES is used in generation, transmission, distribution, customer-sited, EVs, and other sectors. India’s DR market also has huge potential. The government set a target to realize a smart grid in 2027.