In 2017, China’s energy storage industry began to heat up. October marked the release of the first national-level policy on the energy storage industry, and the energy storage market took big steps towards commercialization. Based on long-term industry tracking, CNESA’s research department has gathered together the top ten energy storage news events to occur in China in 2017. Let’s hope for an even better year for energy storage in 2018!
1. The Release of the “Guiding Opinions on Promoting Energy Storage Technology and Industry Development” Clarifies the Key Goals for the Next Ten Years of Energy Storage Development
On October 11, 2017, the Chinese government released the “Guiding Opinions on Promoting Energy Storage Technology and Industry Development.” The policy, which is the first of its kind for China’s energy storage industry, focuses on current issues related to China’s energy storage technology and development, such as lacks in policy support, research demonstrations, standardization, and other issues. The policy proposes an energy storage development goal for the next 10 years and five major tasks for China’s energy storage development. The policy is a milestone for China’s energy storage industry, certifying energy storage’s place in the energy revolution and its use as a key strategy for a clean, low-carbon modern energy system.
2. The “Workplan for the Improvement of a Subsidy (Market) Mechanism for Ancillary Services” Encourages Energy Storage Equipment to Provide Ancillary Services
The National Energy Administration released the “Workplan for the Improvement of a Subsidy (Market) Mechanism for Ancillary Services” in response to new challenges in operations management for electricity systems. The workplan seeks to improve and develop the subsidy (market) mechanism for ancillary services, and formulates a detailed, multi-stage development goal and key tasks. The policy continues the “Grid-Connected Power Plant Ancillary Services Management Interim Measures” from 2006, serving as another important outline for the promotion of ancillary services nationwide. The workplan puts forth an increase in ancillary services according to need, encouraging energy storage equipment and demand-side resources to provide ancillary services, and permits third parties to participate as providers in ancillary services.
3. Shanxi Province Begins Initial Trials of Energy Storage for Peak Shaving and Frequency Regulation Ancillary Services
The Shanxi Energy Regulatory Office released the “Notice on Encouraging Energy Storage in Peak-Shifting and Frequency Regulation Ancillary Services in Shanxi Province.” The notice is the country’s first administrative regulation focused on energy storage for ancillary services. In order to ensure that energy storage will be able to participate in the ancillary services market smoothly, the notice includes a workplan for program management, power pricing policies, grid dispatch strategies, and other areas. Shanxi province’s trial period for energy storage in ancillary services will consist of peak shaving and frequency regulation services utilizing both integrated and independent energy storage facilities. Initial peak shaving trial units are set for a total capacity not to exceed 300,000MW, while initial frequency regulation trial units are set for a total capacity not to exceed 120,000MW.
4. Grid-integrated Energy Storage Sees Support through Jiangsu Province’s Release of the “Customer-side Energy Storage Grid Integration Management Regulations”
State Grid Jiangsu Electric Power Co. released the “Customer-side Energy Storage Grid Integration Management Regulations.” The policy provides regulations for grid integration of customer-side energy storage systems connecting to the grid at 3,500 volts or less and a storage power rating of 20MW or less. Customer-side storage systems of 10 (6,20) thousand volts or more require local company control centers to conduct the necessary grid integration tests and configurations. 380 (220) volt customer-side energy storage systems require city/county company customer managers to be responsible for organizing the appropriate department to conduct the necessary grid integration tests and configurations.
5. Energy Storage Enterprises Increase Deployment of Industrial and Commercial Storage Projects, with Jiangsu, Beijing, and Guangdong Becoming Hot Spots
According to statistics from CNESA’s project tracking database, Jiangsu, Beijing, Guangdong were 2017’s hot spots for planning, constructing, and implementation of new energy storage projects. These three areas are notable for their developed economies, numerous industrial and commercial parks, and heavy power use. Industrial and commercial users in these areas also engage in large degree of energy arbitration, and can make use of load shifting for electricity price management. Narada, Sunwoda, Clou, and ZTT represent the key companies that have continued to increase deployment in the above three regions, both through increased activation of projects and the continuous release of contracts and construction plans for projects at 100 MWh and above.
6. Local Ancillary Service Markets Continue to Open, Encouraging Energy Storage to Be an Independent Market Player
According to statistics from CNESA’s policy tracking database, following the lead of the special market reform trials for ancillary services in the northeast region beginning at the end of 2016, Shandong, Fujian, Xinjiang, and Shanxi each released their own marketization trials and operations regulations for ancillary services in 2017. Each area has created its own peak shaving and frequency regulation market trading mechanism based on their unique power generation and load needs. Each area has also defined an equal role for market players, including power generation companies, power sellers, and power users. Energy storage can provide ancillary services to power systems as an independent market player, or integrate with power generators at the generation side to share market benefits.
7. Problems in the Use of Renewable Energy Peak Shaving Become More Apparent, Energy Storage’s Flexibility for Generation-side Applications Continues to Attract Attention
Due to the limited peak shaving abilities of power systems, lags in the planning and construction of transmission channels, and other reasons, problems in China’s use of renewable resources has become an increasingly urgent issue. As a result, the flexibility of energy storage applications for generation-side applications became an area of increased interest in 2017. Construction began on large-scale integrated “resource bases” combining wind, solar, water, thermal, and energy storage. Power generators and energy storage enterprises also teamed together to explore solar+storage models, wind+storage models, and dispatch solutions, with Huaneng’s solar+storage project in Qinghai, Beikong Renewable Energy’s Energy Storage plant in Yangyi, Tibet, and the Yellow River wind+storage farm project in Qinghai serving as examples of renewable energy generation-side storage projects either in operation or under construction.
8. EV Battery Recycling Programs Take Off, Second-Life Battery Markets Begin to Form
With China’s EV sales continuing to climb, a large number of batteries will soon face retirement. The State Council’s release of the “Manufacturer Extended Responsibility Plan” extends responsibility to EV manufacturers and establishes a system for the use of recycled batteries. According to CNESA statistics on second-life battery markets, in 2017, new energy vehicle enterprises, energy storage system aggregators, EV manufacturers, PACK and BMS enterprises, battery recyclers, and other industry chain members have all increased efforts to create a second-life energy storage market. The establishment of second-life trial programs at the megawatt level in industrial and commercial parks, China Tower Co.’s release of an EV recycling bidding program, and other trends have created popularity for second-life energy storage markets.
9. Four Energy Storage Technologies Receive National Support and Become Key Research Focuses for 2018
The Ministry of Science and Technology’s release of the “Smart Grid Technology and Equipment” special guidelines in 2018 reveals five technology focuses. These include the use of large scale renewable integration, flexible large-scale energy internet, diversified customer supply and demand interaction, multi-resource distributed energy supply and microgrids, and smart grid foundations. In total, 23 key research tasks have been created. In 2018, the key energy storage technology research areas include technologies for scaling applications of second-life EV batteries, foundational research on high safety long-life solid state batteries, research of megawatt scale flywheel energy storage key technologies, and research of liquid metal battery storage technologies.
10. The First Batch of New Energy Microgrids and Energy Internet Demonstrations are Released, Energy Storage Plays a Critical Support Role
In 2017, China’s National Development and Reform Commission and the National Energy Administration each released the “New Energy Microgrid Demonstration Programs List” and the “‘Energy Internet+Smart Energy’ Demonstration Projects List,” respectively. 28 new energy microgrid demonstration projects and 56 energy internet demonstration projects were included on the lists. Out of the 28 projects, 25 are focused on electric energy storage or heat energy storage. Of the energy internet projects, the majority are energy storage facilities. Energy storage has already become a critical technology for the support of new energy microgrids, the energy internet, and other new energy applications.
The CNESA research department conducts continuous tracking of energy storage industry development both in China and around the world. A comprehensive summary and analysis of the 2017 energy storage industry’s projects, manufacturers, and policies will be available in CNESA’s “Energy Storage Industry White Paper 2018,” to be released during the 7th Energy Storage International Conference and Expo scheduled for April 2018.