A Look Back on the Energy Storage Industry in 2017

 

2017: An Unexpectedly Busy Year for Energy Storage Development Around the World

Amongst the variety of energy storage technologies, electrochemical storage technologies have developed more speedily than any other.  Li-ion batteries, NaS batteries, lead-acid batteries, and flow batteries have all entered the fast lane of development. According to statistics from the China Energy Storage Alliance (CNESA), worldwide total capacity for electrochemical energy storage from 2000-2017 was 2.6GW, or 4.1 GWh.  These numbers represent a growth of 30% and 52% from 2016, respectively.  2017 saw a total increase of 0.6GW, or 1.4GWh, with over 130 new projects put into operation.

Beginning in 2016, electrochemical energy storage began to see rapid new applications.  Construction of new energy storage programs became “large, numerous, and popular.”  According to CNESA statistics, from 2016-2017, the global combined total scale of projects planned or under construction was 4.7GW, with an increasing number of projects hoping to be implemented in the following year to two years.  In order for large-scale electrochemical storage to meet the needs of power systems, the capacity of independent electrochemical storage systems has been ever increasing.  Over 40 projects with a capacity of 10MW or more were recorded between 2016-2017.  Popularity for energy storage applications has increased worldwide.  According to CNESA statistics, in 2015, ten countries including the United States, China, and Germany deployed electrochemical storage systems. By 2017, close to 30 countries had implemented energy storage projects, demonstrating how energy storage has become increasingly globalized.

Yet it is the speed of China’s electrochemical energy storage development that catches the most attention.  According to CNESA statistics, from 2000-2017 China’s total electrochemical storage capacity was close to 360MW, 14% of the world’s total, with an annual growth rate of 40%, surpassing the global growth rate.  Between 2016 and 2017, China had nearly 1.6GW of capacity planned or under construction, 34% of the world’s total.  China hopes to lead the industry’s development in the next few years.

2017: A Year of Policy Support for Energy Storage Around the World

As a country that developed policy support for energy storage at a relatively early stage, the United States has seen policies emerge across many states, starting in California and stretching to over 10 others, including Massachusetts, Oregon, and Hawaii.  The United Kingdom, Austria, Czech Republic, Italy, Australia, India, and China all released energy storage development policies in 2017.  Policy support, both in its depth of detail and breadth across regions, has proven beneficial for the rapid development of energy storage in 2017.

In October 2017, China released the first national-level energy storage policy for technology and applications support, the “Guiding Policies on Promoting Energy Storage Technology and Industry Development.”  The “Guiding Policies” lays out support plans for energy storage in five different areas: support for energy storage equipment research, support for energy storage’s utilization of renewable resources, support for the use of energy storage in the stabilization and flexibility of power systems, support for energy storage in increasing smart-energy applications, and support for energy storage as a means of diversifying the energy internet.  At present, Dalian, Yichun, Beijing, Handan, and other areas have already released local policies supporting energy storage.  In the future, it is likely that more policies will emphasize the use of local resources and industry advantages at the provincial and city level. It is also expected that future policy emphasis will be placed on the creation of electricity market entrance mechanisms and price compensation mechanisms for energy storage.

Following California’s declaration of a 1.325GW procurement plan, Oregon, Massachusetts, and New York released their own energy storage procurement plans for electric utilities.  New Mexico has already added energy storage to its list of resources for public utilities.  Maryland has designated sites across the state for the design, construction, investment, and operation of renewable resource and energy storage programs.  The United Kingdom and Australia are two countries that have seen rapid development of energy storage recently, with policy support following quickly behind.  The British government has emphasized the use of energy storage as part of the strategy for its “smart systems and flexibility plan,” providing recognition for energy storage as part of the nation’s electricity market.  Multiple regional governments in Australia have released incentive plans for storage installations, using subsidies to support behind-the-meter energy storage systems.

2017: A Year of Energy Storage Systems and Market Needs

Although industry development has intensified and policy support has gradually opened the market to energy storage, we cannot ignore the fact that the current driving factor for energy storage development is still policy.  The road to profitable and commercialized energy storage is still full of challenges and uncertainties.  Energy storage has become a closely watched “blue ocean” market.  In 2016, worldwide investment in energy storage exceeded 4.33 billion dollars.  Public acknowledgment and participation has given the industry confidence, yet as demonstrations gradually become marketized, independent, non-market demonstrations will end, and policy support will weaken.  Energy storage must then operate and compete in the real market, and technological performance, system configuration, application models, the profit feasibility, and scientific methods must all come under market scrutiny.  Energy storage has now entered the stage in which it must began to mature in the market.

In 2017, two separate battery storage projects, sized at 2.1GW and 4.8GW, were granted the opportunity to participate in the UK’s T-1 and T-4 capacity market auction.  Yet controversy arose regarding the relatively short dispatch duration of battery installations, which limits their ability to handle pressure on electricity systems.  After considering the fairness to long dispatch duration, non-energy storage technologies, the UK’s BEIS (Department for Business, Energy, and Industrial Strategy) conducted an evaluation, and, in December of 2017, decided to lower the de-rating factor for 30-minute duration batteries in the T-4 and T-1 capacity auctions.  The ruling put new demands on energy storage systems that can provide flexible response in a short time duration.  In the short term, the ruling can be viewed as a restriction on short duration storage in the capacity market, yet such a ruling also provides motivation for energy storage providers to develop long duration energy storage solutions.

The PJM market, which currently possesses 265MW of energy storage capacity in frequency regulation, has also recently update its regulations for the frequency regulation market. During periods of high ramp rate, the RTO requires large-scale generators or load switching to maintain balance. While decreasing the purchase of services classified as RegD (those that have fast ramp rates but limited power), the RTO has also increased the charge and dispatch rates for grid energy storage systems. This regulation update demonstrates how energy storage must now compete with other resources in a balanced market.  How energy storage will profit and find a suitable place in the market under these new regulations remains to be seen.

The standardization of energy storage products is a much needed development. In Germany, 52,000 residential energy storage systems were installed in 2017.  Demand for solar+storage systems for industrial and commercial applications is also quite high, yet growth has been challenged by a lack of product standardization, technological standardization, interface standardization, and standardization of commercial models. Additionally, standardization is needed for fire protection, health, safety, and other factors.  If such issues are ignored, it will be difficult for energy storage to spread throughout Germany at a large scale.

As energy storage continues to marketize, market demands and technological capabilities will continue to conflict.  As technology continues to become more feasible in the market, hardware, software, and interface performance will continue to not only improve but become more compatible with other equipment. In the electricity market, energy storage’s position, applications, and value will continue to shift and rectify itself in a positive direction. Within the power price mechanism, energy storage will continue to gain recognition as a means of replacing other power equipment.  Energy storage will also need to work faster to create standards and regulations to satisfy the environmental and safety demands of users. These issues will, in the short term, cause energy storage’s development to slow, yet this is not a negative. The development of energy storage requires continuous exploration, trials, and even failures to fight for its place in the market and move increasingly forward. An industry that has passed the tests of the market is one that possesses the greatest competitiveness and ability to survive.

Ten Events that Defined Energy Storage in 2017

2017 was an exciting year for the development of the energy storage markets and projects.  Looking back, the China Energy Storage Alliance (CNESA) has compiled a list of the 10 biggest events in the international energy storage industry for 2017.

1.       United Kingdom: Capacity Market Regulation Reforms Deal a Blow to Short-duration Storage Systems

In July 2017, British electricity market players put pressure on the Department for Business, Energy and Industrial Strategy (BEIS), stating that battery storage could pose possible risk to the safety of electricity supply systems due to the fast speed in which such batteries discharge. In response, BEIS evaluated the possibility of such a risk and considered a reduction in the de-rating factor of short duration energy storage systems. In December of 2017, BEIS confirmed that T-4 and T-1 capacity auctions would receive sweeping reductions in de-rating factors for 30 minute duration batteries. This regulatory change is expected to severely reduce the benefit of short-duration energy storage projects and delivers a sharp blow to the future development of the capacity market for short-duration energy storage.

2.       Australia: Announcement of 5-Minute Settlement Period Helps Compensate Fast-Response Systems

Australia’s electricity system operates at a five-minute power dispatch interval, yet prices are calculated at intervals of 30 minutes.  Such a system is unable to distinguish between rapid and slow responses, meaning that systems that respond after 25 minutes would receive the same remuneration as those that respond immediately.  The new five-minute dispatch interval changes the way in which power generation companies are paid for the electricity they provide, and supports those technologies, such as energy storage technologies, that provide fast response to electricity needs.

3.       United States: Energy Storage Provides Power to the Grid After Southern California Gas Leak

The Aliso Canyon gas leak was the worst natural gas leak in the history of the United States, causing a severe electricity supply crisis in Los Angeles and San Diego.  In 6 months, over 100MW of storage capacity was installed in southern California in response to the crisis.  The incident served not only to highlight energy storage as a viable solution for grid emergencies, but also helped to decrease the dependence of the area’s power plants on natural gas.

4.       Europe: More Energy Storage Subsidies/Incentive Plans Appear, Promoting Behind-the-meter Solar Storage

Following California’s SGIP policy and Germany’s solar storage subsidy policy, other countries and regions in Europe have released subsidies or incentive plans for distributed energy storage.  Such measures promote large-scale applications of behind-the-meter storage.  Austria’s parliament voted to provide long-term funding for countrywide PV projects from 2018-2019. Lombardy, Italy’s most economically developed region, now provides subsidies to customers who purchase and install energy storage systems.  The Czech Republic’s Ministry of Industry and Trade has agreed to appropriate funds to support solar energy storage.  These and other subsidy policies will help to stimulate the commercial development of behind-the-meter storage in Europe.

5.       India: India’s Energy Storage Market Suffers Many Setbacks, But There is Potential for the Future

2017 was not a great year for India’s energy storage market.  Although India holds a positive attitude towards energy storage development, many planned energy storage projects have been shelved or postponed due to a lack of sufficient funding or specifications.  Such projects include the Pavagada and Kadapa solar storage project, which canceled bids after a sudden drop in PV prices, as well NTPC Ltd’s solar storage project on Andaman and Nicobar islands, which has seen continuous shelving of bids. The situation only began to improve during the latter half of 2017.  In the future, as population rises, urbanization continues, and extreme weather conditions lead to more frequent electricity supply issues, India will face tough challenges in generating capacity and T&D infrastructure. Groups including the Indian government, distribution network operators, and public utilities, among others, are actively working to develop energy storage plans, industries, and business layouts. Looking forward, energy storage shows much potential for growth in India.

6.       Global Policy Promotion: More Energy Storage Procurement Plans Released, Encouraging Rapid Deployment of New Projects

Following the opening of procurement planning after California’s AB 2514 bill, the U.S. states of New Jersey, Massachusetts, and Oregon, as well as Australia’s Victoria, Queensland, and South Australia, among others, have all enacted their own energy storage procurement goals for the support of establishing public utility-side storage projects.  New York state is also in the process of enacting their own procurement goals. The creation and announcement of these public utility procurement plans is an important step in the promotion of large-scale grid-side energy storage.

7.       Global Market Transactions: Mergers/Project Ownership Changes Fuse Technology and Capital

Large energy enterprises continued acquisitions of energy storage companies in 2017, including the acquisition of Demand Energy by European public utility company Enel, the acquisition of sodium-ion battery producer Aquion by China Titans, the acquisition of demand response company Restore by Centrica, and many other purchases. At the same time, many promising energy storage projects saw a change of hands, such as the purchase of RES and Belectric’s UK frequency regulation project by Foresight, and Enel’s purchase of another UK frequency regulation project through a contract signing with Element Power.  Acquisitions of energy storage companies and projects by large energy groups reflects their recognition of energy storage’s potential and helps to encourage a merging of technology and investment in the market.

8.       Popular Global Models: Virtual Power Plants Grow, Distributed Energy Storage’s Value Continues to Develop

Virtual power plant models have generally been easy to plan yet hard to construct.  2017 saw the implementation of a series of virtual power plants across the globe.  Sonnen released a virtual power plant project involving 2900 Arizona homes. Sunverge implemented two separate virtual power plant programs, one in Australian public utility AGL’s service area, the other in Japan’s Tepco service area.  Ireland’s International Energy Research Center announced plans for a community-level virtual power plant project. The popularity of these and other virtual power plant projects across the globe highlights the value of distributed energy resources to the grid.

9.       Global Project Scale: The Value of Large-scale Projects to the Grid Becomes Clear

As the price of energy storage technology continues to fall, in 2017 planned or constructed energy storage projects have become less limited by initial capital, and project scales have become larger.  These projects include developer Deepwater Wind’s large-scale wind energy storage project in coastal Massachusetts, the KEPCO and LG CNS plan for a large-scale solar plant in Guam, and Australia’s large scale combined renewable resource and energy storage projects.  These projects are all within the tens of MWh or above, some even reaching 400MWh. The expansion of energy storage projects to a larger scale helps to verify how large-scale storage projects can add value to power systems.

10.   Global Model Projects: Tesla Delivers World’s Largest Battery Storage System in Less Than 100 Days

On Dec 1, 2017, Tesla officially activated the world’s largest Li-ion battery system in South Australia.  The project operates at 100MW/129MWh and utilizes a Samsung SDI Li-ion battery system.  The project is connected to French renewable energy provider Neoen’s Hornsdale wind farm, providing stable clean power for South Australia.  The project received much attention for its completion in under 100 days, and served to demonstrate how energy storage can alleviate power system emergencies in a short period of time.

Summary

The development of the international energy storage market has served to help China map its own technology developments, search for new business models, and reform related policies and mechanisms.  Detailed information on how the international markets have developed will be included in the China Energy Storage Alliance’s 2018 White Paper, to be released at the 7th Annual International Conference and Expo scheduled for April 2-4, 2018

CNESA Storage Market Analysis Q3 2017

1.       The Global Market

Electrochemical Energy Storage Programs Continue a Steady Growth

According to partial statistics of the China Energy Storage Association (CNESA), as of 2017 Q3, energy storage projects have reached a total worldwide operational scale of 169.2GW. Among these, pumped hydro occupies the largest number of installations at 97%. Electrochemical energy storage systems rank third in scale, at 2244.4MW, or 1.3% of the total, an increase of 15% from last year.

The third quarter of 2017 has seen a worldwide increase of 94.4MW in the total number of operational electrochemical energy storage projects, a 551% increase from Q3 of 2016, and 50% increase since Q2 of 2017.

Q3 Markets in the United Kingdom, Australia, United States, and China are Active

A comparison of worldwide Q3 increases reveals the UK, China, and Japan to be the top three countries with the largest scale of projects in operation. Projects in these three countries have all been dedicated to the renewable integration and ancillary service sectors. Australia, the US, and the UK rank top three in scale of projects under construction/planning, with 91% of such projects in these countries dedicated to renewable integration and the ancillary service sectors.

Ancillary Services Occupy the Largest Proportion of Q3 Market

In quarter three of 2017, the scale of global increase in energy storage projects has been largest in the ancillary services sector at 31.5MW, or 33% of the total global capacity.  This is a 6200% increase since Q3 2016, and 75% increase since Q2 2017. Projects have largely been concentrated in the UK, Germany, and Belgium, such as the UK’s frequency regulation projects in Bristol and Darlington. The energy storage systems operate as independent electric stations, or in conjunction with gas turbines to provide a primary frequency control service for the European market.

Lithium Battery Enterprises Occupy the Top Four Spots in the Q3 Market

A comparison of energy storage enterprises by newly installed capacity revealed that the top ten energy storage manufacturers were responsible for 82% of the total installed capacity in Q3 2017.  Among these, lithium battery manufacturers occupied the top four spots on the list, and a total of eight spots altogether.  Lead-acid battery manufacturers Sacred Sun and Narada occupied the remaining two spots on the list.

Notes:

1.       Subject of the rankings: global energy storage system providers

2.       Ranking Criteria: based on the “Global Energy Storage Project Database”; Data used comes from the publicly available and self-reported information for each enterprise; Rankings are based on the global total new increases in overall capacity (MW) in the first three quarters of the 2017 year.

2. The Chinese Market

Electrochemical Energy Storage Programs See Similar Steady Growth

According to partial statistics of the China Energy Storage Association (CNESA), as of the third quarter of 2017, operational energy storage projects have reached a scale of 27.7GW. Among these, pumped hydro occupies the largest number of installations at 99%. Electrochemical energy storage projects hold a total capacity of 318.1MW, or 1.1% of total installations, an increase of 18% from the previous year.

In the third quarter of 2017, new energy storage projects reached a total scale of 22.8MW, a 114% increase from Q3 2016 and 1% increase from Q2 2017.

Q3 Markets in Eastern China Show High Activity

A geographic comparison of the total newly implemented capacity reveals that Eastern China occupies the largest scale at 12.2MW, or 53% of the total capacity across China.  All applications are within the behind-the-meter sector, with the bulk of applications seen in industrial parks, helping enterprises to track peak and off-peak costs and save money through arbitrage of energy.

Behind-the-Meter Sector Occupies the Largest Proportion of Q3

China’s newly added energy storage projects have all been concentrated on the renewable integration and behind-the-meter sectors.  The behind-the-meter sector is the largest at 17.8MW, occupying a 78% proportion, a 67% increase since Q3 2016, and 287% increase since Q2 2017. The third quarter increases in the behind-the-meter sector have all been in lithium-ion and lead-acid battery technologies, with lead-acid batteries occupying the greatest proportion at 54%.

Lithium Battery and Lead-Acid Battery Enterprises Occupy the Main Spots in Q3 Market

The energy storage providers holding the top five spots in new capacity held 80% of the total new capacity in China for Q3 2017, with Narada occupying the first place on the list.  The bulk of the storage capacity for these five enterprises has been applied to the behind-the-meter sector, at nearly 70% of the total new capacity. New projects have largely been concentrated in Jiangsu, Zhejiang, Guangdong, and other areas of eastern and southern China, with the bulk of the energy storage systems applied to industrial parks.

Notes:

1.       Subject of the rankings: Chinese energy storage system providers

2.       Ranking criteria: based on the “Global Energy Storage Project Database”; Data used comes from the publicly available and self-reported information for each enterprise; Rankings are based on China’s total new increases in overall capacity (MW) in the first three quarters of the 2017 year.

3. About this Report

In order to strengthen the sharing of industry information and assist enterprises in better understanding market developments, the China Energy Storage Alliance (CNESA) has, beginning in 2017, provided the “Energy Storage Industry Data Sharing and Transmission Platform.”

Each quarter year, we send our platform members the full version of our Report on the Global Energy Storage Market. Our summary versions, once available, are also shared freely amongst industry colleagues.

We welcome any enterprise wishing to join our information sharing platform to contact the CNESA Research Department, to share information and receive a copy of the Report on the Global Energy Storage Market.

Contact: Na Ning

Telephone: 010-65667068-805

Email: na.ning@cnesa.org

BAIC BJEV Announces “Optimus Prime Plan” Combining Battery Swapping, Energy Storage, and Solar Models

On November 3, 2017, BAIC BJEV established the “Weilan Environmental Alliance” and put into place their “Optimus Prime Plan.”  The plan seeks to make use of battery swapping and second-life battery technologies, integrating new energy vehicles, EV batteries, battery swapping stations, and PV technology, creating an intensive, intelligent, and convenient environmentally friendly system. The “Optimus Prime Plan” has three stages of implementation:

·       Stage 1 (2016-2017): BAIC BJEV and Aulton will work together with taxi companies to install battery swapping stations, creating an operations platform for transportation and second-life battery operations and repair. The measures will create a city-level energy Internet centered on swapping stations utilizing solar energy storage.  100 swapping stations will be installed and over 4000 vehicles will be put in operation, creating a total stored energy battery system of 100 MWh (100,000 kWh).

·       Stage 2 (2018-2020): Beijing, Xiamen, Guangzhou, Shenzhen, Lanzhou, Xi’an, Kunming, Zhengzhou, and other cities will receive operations platforms for transportation and second-life battery operations and repair. These efforts focus on creating a regional-level energy internet centered on swapping stations utilizing solar energy storage. 1000 swapping stations will be installed and 100,000 vehicles will be put in operation for a total 1GWh (1,000,000 kWh) stored energy battery system.

·       Stage 3 (2021-2022): the plan will be extended across the entire country, covering all major cities, urban, and rural regions. These efforts will focus on creating a country-wide energy internet centered on swapping stations utilizing solar energy storage. 3000 solar-powered swapping stations will be installed and 500,000 vehicles will be put into operation for a total of 5 GWh of storage in operation.

A total of 10 billion RMB is to be invested in the “Optimus Prime Plan.” The plan will help to ease pressure on the power grid, conserving 1 GWh of grid electricity for the country in five years. The plan will also encourage second-life usages for EV batteries, giving new use to 50,000 tons of batteries over five years. Finally, the plan is environmentally beneficial: with 500,000 taxis converted to electric vehicles, 8,500,000 tons of carbon emissions can be reduced in a year.

News from Around the Web

Puneng Energy’s Vanadium Flow Battery Demonstration Project in Zaoyang, Hubei

The program is planned for a total scale of 10MW/40MWh, with a first phase scaled at 3MW/12MWh.  The project is planned to begin installation in November 2017. The first phase is planned for completion in early 2018.  Upon completion, the project is set to be the largest capacity flow battery system in China.  Puneng Energy and Hubei Pingfan plan to utilize local vanadium resources in construction of the project to develop the local vanadium battery industry to meet future energy storage needs.

Link (in Chinese):  http://www.escn.com.cn/news/show-471590.html

Guoxuan High-Tech Power and Shanghai Electric Become Energy Storage Strategic Partners

In November 2017, Shanghai Electric Group and Guoxuan High-Tech Power met in Nanjing to sign an investment agreement for the creation of an energy storage project base.  The project will cost 3 billion Yuan and make use of Shanghai Electric’s resource advantages in the electric sector, widening distributed energy storage and grid energy storage operations. The project will also make use of Guoxuan High-Tech Power’s battery storage technology, together creating an energy storage base that will help move energy storage technology towards the international market.

The project’s scope of operations will include microgrid energy storage, peak-shifting and frequency regulation, high-reliability back-up power, specialized vehicle power sources, construction machinery power sources, mobile power charging services, and more.

Link (in Chinese): http://www.gg-lb.com/asdisp2-65b095fb-30734-.html

Shanxi Energy Regulatory Office Issues “Notice on Encouraging Electric Energy Storage in Peak-Shifting and Frequency Regulation for Ancillary Services in Shanxi Province”

The notice states that electricity producers, customers, sellers, and energy storage providers all may participate in ancillary services, though grid enterprises may not, for the time being, directly or indirectly invest in the construction of energy storage installations.

The above ancillary services include peak-shifting and frequency regulation. Energy storage installations independently participating in peak-shifting should have a power rating of above 10MW (with no limits at present on combined peak-shifting capacity), with power rating for a continuous charging time of 4 or more hours.  Energy storage installations independently participating in frequency regulation should have a power rating of 15MW or more, and a continuous charge-discharge time of 15 minutes or more. A single combined frequency regulation project should have a capacity of 3%, or 9MW and above, with a continuous charge-discharge time of 15 minutes or more.

Link (in Chinese): http://sxb.nea.gov.cn/

Sacred Sun Power’s 1.2MWh Energy Storage Project at the Liyuan Economic Development Zone in Wuxi

November 7th, 2017, Sacred Sun Power’s 1.2MWh energy storage project at the Liyuan Economic Development Zone in Wuxi was successfully put into operation.  Both Sacred Sun and Boer Liyuan New Energy have cooperated to contribute funds to the project.  The project will mainly focus on helping the economic park utilize peak shaving methods and prepare emergency backup power supplies.

Link (in Chinese): http://www.escn.com.cn/news/show-475216.html

Join Us for ESIE 2018

The China Energy Storage Alliance’s 7th annual Energy Storage International Conference and Expo (ESIE) is set to take place April 2 – 4, 2018 at the China National Convention Center in Beijing.  This year’s event is supervised by the National Energy Administration, with support from the China Energy Research Society and Zhongguancun Science Park.  The event will feature nearly 100 expert speakers from around the globe and is expected to draw over 5000 guests from all corners of the energy storage industry, including government agencies, private enterprises, research institutes, energy service providers, and many more.

ESIE is China’s leading event covering the energy storage industry and is the premiere platform for connecting China’s energy storage industry with the world.  ESIE 2018 will continue to build upon the success of previous years’ conferences with an exhibition area newly expanded to 6000 square meters and featuring over 100 exhibitors.  Guests can expect a wide variety of policy discussions, expert dialogues, displays and exhibits, new product releases, and the second annual International Energy Storage Innovation Competition, honoring outstanding technologies, projects, and individuals from the world of energy storage.

The 2018 conference will be particularly special.  With the exciting release in October 2017 of China’s first national-level policy document for energy storage, all eyes are focused on China’s energy storage industry. The “Guiding Opinions on Promoting Energy Storage Technology and Industry Development” serve as the first framework released providing a policy basis for the development of large-scale energy storage technologies and industries in China.  This year’s conference will invite government leaders and policymakers to provide a deep analysis of the “Guiding Opinions” document and related regional government policies across China, focusing on the practical measures laid out in the “Guiding Opinions,” how future energy storage policies will be structured, and more.  The discussions will help interpret China’s energy storage outlook for conference attendees both domestic and international.

Exhibition spaces are booking fast and include exhibitors both returning and new, such as Soaring Electric, Today Energy, Sacred Sun, ZTT, Ray Power, CGGC-UN Power, Shuangdeng Group, Yinlong Energy, TÜV Rheinland, Rongke Power, ABB, NGK Insulators, and many more industry leaders.

Join us for China’s biggest energy storage event of the year.  To learn more and to book your ticket, please visit the ESIE website at http://expo.cnesa.org/

China Releases First National-Level Policy Document Guiding Storage Industry Development

China Releases First National-Level Policy Document Guiding Storage Industry Development

On October 11, 2017, China released its first national-level guiding-policy document covering energy storage. The document, “Guiding Opinions on Promoting Energy Storage Technology and Industry Development” (hereafter referred to as “Guiding Opinions”) marks a significant milestone, providing a unified framework for subsequent policies and detailing key development tasks. The announcement comes at a ripe time for the industry. According to data from the China Energy Storage Alliance (CNESA), between 2016 and June 2017, over 1.35 GW of electrochemical energy storage projects were completed or under construction. Compared to the growth between 2000-2015, China has increased its domestic storage capacity by a factor of 9.6.

Jointly published by the National Development and Reform Commission, Ministry of Finance, Ministry of Science and Technology, Ministry of Information and Information Technology, and the National Energy Administration (NEA), the “Guiding Opinions” is the culmination of over 1.5 years work. In 2016 the NEA tasked China Energy Storage Alliance (CNESA) with organizing stakeholder input from power companies, renewable energy companies, market operators, and consultation from a panel of over 20 experts. The Chinese Academy of Sciences Institute of Thermal Physics, Institute of Physics, Electric Power Research Institute, and Tsinghua University all contributed with supporting research. 

The document is structured around three key points to:

• Affirm importance of energy storage in relation to development priorities such as smart grids, high renewable energy grid-penetration, and the “Internet of Energy.”

• Set development goals and key tasks over the upcoming 10 years.

• Outline necessary supporting policy directions to be enacted to achieve these goals.

The “Guiding Opinions” clearly identifies energy storage as an asset to the modern power grid, to provide grid services, and ensure quality grid operations, resiliency, and safety.

Particularly important are the development goals and key tasks specifically laid out, providing a clear idea of how the Chinese industry will take shape in the near future. Over a 10-year period, the document envisions two stages of development. In the first half, domestic storage technology production will reach advanced international standards, with preliminary accomplishments in creating a standards body. The second half of development, which will fall into the 14th Five Year Planning Period, (China is currently in the 13th Five Year Planning Period) will show a mature industry with world-class, internationally competitive technology. 

On the road to achieving technology advancements, the document outlines specific plans for model demonstrations verifying various technologies at specific power and capacity ratings. Included in these are plans for projects such as:

• 10 MW/100 MWh-grade CAES demonstration

• 10 MW/1000-MJ grade flywheel demonstration

• 100 MW-grade Li-ion battery demonstration

• 100 MW-grade vanadium flow battery demonstration

Construction of any of the above would represent significant technology breakthroughs. For reference, the world’s largest capacity Li-ion battery project in operation currently stands at 30 MW/120MWh in California.

Plans are also included (without specific power ratings) for molten salt thermal storage and advanced lead-based battery technologies. In all, the “Guiding Opinions” stresses the importance of developing a diverse array of technologies suitable for different applications.

To achieve these goals, the document calls for subordinate government agencies to establish policies governing pricing mechanisms, technology standards, intellectual property protections, and battery material recycling. In addition, the “Guiding Opinions” also lists out plans to bolster support for continued trial demonstrations, clarifying compensation mechanisms, guiding investments, and continuation of power system market reforms.

While there have been some movements in the local and regional policy sphere geared towards energy storage, such as the ancillary services market pay-back mechanisms in the Northeast along with additional guiding documents supporting energy storage issued in Dalian and Handan, the “Guiding Opinions” are the first concerted national-scale effort.

According to CNESA’s 2017 white paper, electrochemical energy storage installed capacity is expected to grow to 2 GW by 2020, while molten salt and compressed air storage are expected to reach 1.8 GW and 148 MW, respectively. Increased policy support for energy storage will ensure these predictions become reality.

As China’s sole association representing the energy storage industry, CNESA is pleased by the recent policy developments and looks forward to continuing to work towards accelerating the growth of this crucial technology.

Energy Storage in the APEC Region

In collaboration with the Asia-Pacific Economic Cooperation (APEC), CNESA has released a report detailing the status of energy storage technology deployments in the region. The report comes as a culmination of a yearlong project including seminars, site visits, and desk research. Divided into three parts, the report highlights current technologies, representative case studies, and provides an overview and analysis of related policy across APEC economies. 

The report can be accessed from the APEC's publication database here. 

CNESA Storage Market Analysis Q2 2017

Global Market Scale

In Q2 of 2017 49.6 MW of newly added electrochemical energy storage began operations across the globe. This marks a 41% decrease compared to the same period of last year, and a 59% decrease compared to Q1 of 2017. Newly operating projects were located in China, US, Netherlands, Tanzania, Myanmar and the Maldives. Of these, China’s newly added capacity was the largest, representing 43% of added capacity.

In terms of project applications, ancillary services projects took up the largest share at 28 MW, or 56% of newly installed capacity by application. This amount is a 42% crease since the same period last year, and a 72% decrease since Q1 of 2017.

From a technology perspective, projects were predominantly powered by Li-ion and lead-based battery technologies. Li-ion took up the largest share of 43.2, or 87% of installed capacity, a 35% decrease since the same period last year and a 64% decrease since Q1 of 2017.

Global Market Movements

As before, the US, Australia, and Europe are hotbeds of market movement.

The US states of California, Maryland, and Nevada issued several storage-related policy documents in conjunction with user-sited storage, renewables grid integration, tax policy, and demand response. Australia issued standards with respect to Solar + Storage. In Europe, the Czech Republic issued its first solar + storage subsidy plan. Italy and England both issued standards and energy system reforms allowing energy storage to participate in the electric grid. Argentina and South Africa also issued plans for GW-scale solar + storage plants to reduce fossil-fuel dependency, resolve problems with integrating renewables into the grid, as well as provide power for remote regions.

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China Market Scale

In Q2 of 2017, China added 21.1 MW of newly operating electrochemical storage, a 65% increase compared to the same period last year and an increase of 1588% compared to Q1 of 2017. 91% of newly added capacity was located in the Northeast region.

In terms of project applications, 85% of added capacity was used for ancillary services applications, with the entirety of these projects using Li-ion battery technology. When considering all project applications, Li-ion technology similarly was dominant, used in 88% of all project types.  

China Market Movements

On a national level, an official list was released outlining sanctioned microgrid demonstration projects. Of the 28 projects in total, 25 included energy storage equipment. On local and provincial level, provincial level ancillary service market operating rules were published as well as provincial level storage equipment construction standards.

Project located in the Northeast Grid were concentrated around Shanxi and Beijing. The Shanxi projects focused on examining applications for energy storage in thermal power plants as a means to respond to AGC modulation commands. The Beijing projects were installed in commercial buildings to reduce electricity bills and provide a source of backup power.

CNESA White Paper 2017

CNESA White Paper 2017

CNESA has published the 2017 English version of its annual Energy Storage White Paper, a comprehensive review of the storage industry in China and abroad. This year's report takes a special focus on the Chinese market, including China's top manufacturers and an overview of the power sector reforms laying the groundwork for the world's largest upcoming storage market. 

Key topics include:

• China's storage market drivers
• Market breakdown by application, region, and technology
• Overview of key power sector policy reforms
• Global markets summary

We're happy to release this English summary version white paper for free. For more detailed and in-depth analysis, please refer to our Chinese-language version, available for purchase on our Chinese site. 

To learn more about the Chinese energy storage market, please contact us.

CNESA Storage Market Analysis 2017 Q1

Global Movements:

In the first quarter of 2017, newly operating electrochemical energy storage projects totaled 120 MW, a 48% increase compared to the same period last year, and a 37% increase compared to Q4 of last year. Projects were largely located in the United States, England, Finland, China, Australia, Denmark, and India.

Most of Q1's newly added capacity is devoted to ancillary services applications with over 99.1 MW. This represents a 87% increase since the same period last year and a 38% increase since Q4 of 2016.

Global Markets:

The most active states in the US include, California, New York, Texas, Hawaii, and Massachusetts, mainly addressing grid power shortages and increased grid flexibility. England placed emphasis on storage participating in frequency regulation and grid capacity services. German projects focused on large scale storage stations involved with balancing storage renewable energy generation output. Australian projects were mostly located in South Australia and focused on improving grid stability. 

China Market Updates

In Q1 of 2017, China added 1.25 MW of newly operating energy storage facilities, a 92% decrease from the same period last year and a 93% decrease since Q4 of last year. Newly added projects were all in the Eastern China region.

Nearly all of added capacity was in distributed energy and microgrids applications, growth in this sector increased 1150% from Q4 of 2016 decreased 93% since Q4 of 2016.

China Market Movements:

After the release of several national level “13th Five Year Plans” covering development and technology innovation roadmaps across energy sectors, several provinces began releasing provincial-level "13th Five Year Plans" and guiding opinions to cover future implementation plans. 

Innovation Competition Winners Announced

This year, CNESA in collaboration with the China Association for Science and Technology, National Energy Administration, and China Energy Research Society kicked off the first annual energy storage Innovation Competition to recognize outstanding storage projects, technologies, and individuals for their contributions to the industry. The evaluations committee comprised of experts from Tsinghua University, the Chinese Academy of Sciences, and North China Electric Power University selected finalists from an open nominations process taking place from December 2016 to March 2017. Finalists chosen in each category were entered into an online voting platform via the Chinese messaging service, WeChat, where public votes accounting for a portion of the final score, the remaining portion of the score coming from the evaluation committee’s final deliberations in May of 2017.  

On May 23, 2017, the winners were announced during the opening ceremony of the 6th Annual Energy Storage International Conference & Expo. CNESA offers congratulations to the entries listed below and a heartfelt thanks to all who participated in this year’s competition.

Applications Prize - Top 10

Company Name	Project Name
Guangdong Power Grid	Model Demonstration Multi-Purpose Energy Storage Systems and Internet Operations
Sacred Sun	Sacred Sun Nima Storage Project
Dalian Constant Current Energy Storage Co., Ltd.	Dalian Flow Battery Peak Shifting National Demonstration Project
ABB	Hokkaido Island Project (Japan)
Shenzhen Advanced Clean Power Technology Research Co., Ltd.	Relzow 100/200MWh Li-ion Battery Project (Germany)
Pride Power	Mobile EV Charging Station System
State Grid EV Service Co., Ltd.	Highway Service Station “Solar + Store + Charging” Demonstration Project
Huaneng Clean Energy Research Institute Co., Ltd.	DC PV + Storage System Develop and Coordinated Operations Research
Jinhe Energy	Altay, Xinjiang Wind Clean Energy District Heating Model Demonstration
Narada Power	Xuzhou Silicon Industries Peak Shifting Storage Station

Technology Prize - Top 10 

Company Name	Technology Name
Chinese Academy of Sciences Institute of Thermal Physics	Advanced Compressed Air Energy Storage System
Tsinghua University-Affiliated Petroleum Resources and Engineering Co., Ltd.	1MW/60MJ Flywheel Storage System
Ningbo New Energy Technology Co., Ltd.	Supercapacitors for City-Wide Public Transportation Applications
Chinese Academy of Sciences Shanghai Institute of Ceramics	High energy density Li-ion battery ceramic-based ion conducting electrolyte
Shuangdeng Group	Super Carbon Battery
SPS-Cap	New High Energy Density Supercapacitor Applications in Rail-Based Vehicle Energy Storage
Soaring Energy	Black Start Key Technology and Applications
Jiangsu Smart Energy Storage Technology Co., Ltd.	Molten Salt Thermal Storage in Thermal Power Plant Applications
C&D Technologies	Novel Lead-Carbon Battery Technolgoy
Nova Greentech, Inc.	Restructurable Battery Network and Software Defined Battery Control and Management System

Leadership Prize

陈海生 Chen Haisheng Vice-Director, China Academy of Sciences Institute of Thermal Physics/ Chair, China Energy Research Society Energy Storage Committee

张华民 Zhang Huamin Head Scientist, Chinese Academy of Sciences Dalian Physical Chemistry Research Institute

王仕城 Wang Shicheng Chairman, Beijing Soaring Electronics Co., Ltd.,

陈博 Chen Bo General Manager, Narada Electric

魏银仓 Wei Yincang Chairman, Yinlong Energy

Innovation Grand Prize 

Company Name	Project Name
Sacred Sun	Sacred Sun Nima Storage Project

Lifetime Contribution Prize

杨裕生 Yang Yusheng Scholar, Chinese Academy of Engineering

ESIE 2017 Wraps Up 6th Successful Year

CNESA’s 6th Annual Energy Storage International Conference & Expo ESIE was held May 22-24, 2017 at the China National Convention Center. Our biggest event to date included 2000+ representatives hailing from 20 countries convening in Beijing for three full days of expo hall activities, conference forums, and business networking.

This year’s event was guided by the National Energy Administration and supported by the Zhongguancun Park and China Energy Research Society.

Day 1 Pre-Conference Events

APEC workshop speakers and attendees

Pre-conference events included the culminating workshop of CNESA-organized APEC-sponsored research project, “Research on Energy Storage Technologies to Build Sustainable Energy Systems in the APEC Region.” Expert speakers from the Pacific Northwest National Laboratory, Asia Development Bank, World Energy Council, China’s Development Reform Commission, and ABB all presented on the status of energy storage development, policies, and recommendations for implementing Energy Storage technology in the APEC region. Government representatives from Chile, Malaysia, and Thailand were also present.

Representatives from CNESA's 160 member companies attend the annual member's meeting

Monday’s events also included the CNESA annual member’s meeting where alliance leadership briefed members on the accomplishments to date set the strategic development plan for the upcoming year.

Day 2 Events

The opening ceremony with an attendance exceeding 2,000 included keynotes from government leaders from the National Energy Administration, Chinese Academy of Sciences and National Center for Climate Strategy. CNESA Secretary General Tina Zhang also announced the publication of the 2017 Energy Storage Industry White Paper along with the report’s key findings, including the CNESA forecast for 44 GW of energy storage across all technologies by 2020.

CNESA Secretary General, Tina Zhang, presents key findings from the 2017 white paper

Government leaders tour the expo floor and connect with industry representatives to learn about new technologies

It was also during the opening ceremony where results from the 1st Annual Energy Storage Innovation Competition were announced.

Meanwhile on the expo floor, team of government representatives from regulatory and rule-making bodies made an official tour, connecting with industry players to better understand the promises energy storage technology can offer China’s power system.

International panelists discuss storage markets across the globe

Afternoon sessions included break-out forums on solar + storage and the analysis of global markets and policies. The international forum, drawing from CNESA’s vast international network of association partners included speakers from the US Department of Energy (USA), Asia Development Bank (Korea), the European Association for the Storage of Energy (Belgium), CSIRO (Australia), Germany Trade & Invest, and the India Energy Storage Alliance.

Day 3 Events

The culminating conference day was organized around parallel discussion tracks covering technology frontiers, grid-side applications, the “Internet of Energy,” and the economics of storage.

CNESA researcher Ning Na discusses storage economics

Christopher Molnar of American company, Chromalox, presents on thermal storage solutions

Next year's event is scheduled for April, 2018 in Beijing, China. We hope to see you there!

CNESA Delegation Completes US Visit

This April, a CNESA-organized group totaling 15 representatives from Guangdong Power Grid and CGGC-UN Power traveled to Denver, Colorado as part our alliance partner's event, the Energy Storage Association 27th Annual Conference & Expo. Over a packed seven-day itinerary, our delegates attended conference seminars, toured national research facilities, and met with some of the country’s leading figures in the storage industry.

The conference, sponsored by RES and Xcel Energy, included over 2,000 attendees, 70 exhibitors, and 160 speakers in three days of official events. Our trip also came at a crucial time during the US industry development. As AES Energy Storage co-founder and President John Zahurancik noted, “While it took us 9 years to install the first 100 MWh's of energy storage capacity in PJM, we just completed more than that in California in under 5 months. This growth and acceleration are immense, in the US and around the globe. We are changing the way that utilities and grid operators think about the grid - building towards 35 GW's by 2025 and beyond."

Colorado Governor Mark Hickenlooper (left) discusses Colorado's energy future with ESA Director Matt Roberts. 

ESA Director, Matt Roberts, continued with a call for 35 GW of installed energy storage in the United States by 2025.

On the Expo Floor:

Among ESA’s 70+ exhibitors Guangdong Power Grid benefitted from a booth providing a platform to meet with representatives from national laboratories, non-profits, and leading industries. In particular, it was intriguiging to see so many storage providers working outside of the battery-sphere, which currently dominates both the Chinese and global energy storage market.

 Of CNESA’s 140+ alliance members, we also ran into representatives from member companies BYD, Sunwoda, NR Electric, LG Chem, Samsung, Sungrow, ABB, Parker Hannafin.

Panasonic Pena NEXT Station and Microgrid:

Our first site tour of the trip brought us to Panasonic’s Pena NEXT Station and Microgrid demonstration project. Located along the rail line linking Denver International Airport with downtown Denver, Pena NEXT has become a testing ground for energy storage, renewables grid integration, and smart network microgrids under a newly forged public-private partnership among Panasonic, Xcel Energy, and the City of Denver. The first stage of the project development includes an 800-space PV-covered carport owned by the Denver International Airport and Panasonic’s U.S. operations hub. The site also features smart, IoT-enabled street lights operated in conjunction with the University of Chicago/Argonne National Laboratory and 1 MW/2MWh lithium-ion battery system installed by Younicos.

The project has been granted $10.3 million in funding Colorado Innovation Clean Technology (ICT) Program. Denver International Airport in turn purchased ownership of the carport for $2.7 million and Panasonic contributed $1.7 million in the rooftop solar PV installation along with other consruction, maintenance, and labor costs (excluding the new Panasonic facility).

National Renewable Energy Laboratory (NREL):

The National Renewable Energy Laboratory, with its main campus in Golden Colorado, is the Department of Energy’s central laboratory for renewable energy research in the United States. During our visit we had the pleasure of speaking with the head of international programs, Dr. John Barnett, who introduced scope of NREL’s international projects including their collaborations with the Chinese National Energy Administration and the National Development and Reform Commission. We then listened to presentations from two researchers focusing on optimizing lithium-ion batteries and the laboratory’s work in hydrogen fuel research.   

Our visit wrapped up with a tour of the NREL’s Energy System’s Integration Facility which provides a controlled laboratory environment in which the properties of integration of both residential and commercial loads can be investigated and optimized.

NREL National Wind Technology Center:

The NREL also maintains the National Wind Technology Center focusing on wind technology and comprehensive equipment testing and certification. During this visit we saw the world’s sole facility with two dynamometers fully integrated with wind and solar in the field. The site also includes a 1 MW/1 MWh lithium-ion battery system installed by RES.

University of Colorado Boulder:

During our final visit we headed to University of Colorado, Boulder campus to speak with Professor Frank Barnes who previously headed the Electrical Grid and Energy Storage Research Group at the university. During the visit our representatives discussed the status of compressed air energy storage systems development in the United States along with potentials for CAES systems in China.  

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Energy Storage Association is America’s nation-wide industry association representing over 225 companies. As co-founding members of the Global Energy Storage Alliance, ESA and CNSEA have worked closely together and look forward to future collaborations. We would like to extend a big thank-you to our hosts at ESA, the NREL facilities, Panasonic, and University of Colorado Boulder.

It's Time for Storage: CNESA Chairman Johnson Yu

CNESA Chairman Johnson Yu

CNESA Chairman Johnson Yu has been a key player in China's burgeoning energy storage industry, first beginning in 2006 when his vanadium flow battery company was awarded tender in one of the world's largest projects of its kind, the Zhangbei Hybrid Wind & Solar Pilot Demonstration. His next venture provided ancillary services to China's national grid operator State Grid. It was during this time he also founded the China Energy Storage Alliance.

The following is a recent interview with NengJian App. The interview has been translated from the original Chinese.

Q1: HOw would you describe the current stage of china's storage industry development?

We can divide the industry development into three stages. The first was technology verification (2000-2010) mostly consisting of launching basic R&D and technology demonstrations. The second stage (2011-2015) was the demonstration stage. As technology advanced, new ways to apply storage became increasingly clearer. Starting in 2015, energy storage entered a transition period, from demonstration to commercialization. 

With regards to technology itself, the development of electric vehicles has brought about substantial drops in costs. Last year, storage commercialization began in China.  

With the myriad of demonstration projects underway, the applications for storage technology are taking shape. China's main application sectors are currently distributed generation & microgrids, large-scale renewable energy integration, frequency modulation, in addition to ancillary services. 

In the upcoming year, we expect China's installed capacity to double - both behind and in front of the meter.

Just recently the NEA published the “2017 Guiding Opinions on Energy Development” highlighting several projects expected to be completed by the end of the year. These include projects in Suzhou (Huiteng), Tibet (Nima), Dalian (Dalian Rongke), Changsha (BYD), Shanxi (Sungrow), and in Bijie, Guizhou. 

Q2: How effective has policy support for energy storage been in 2016?

In 2016, several industry-focused Five Year Plans, including the “13th Five Year Plan for Energy Development,” “13th Five Year Plan for Renewable Energy Development” and the “13th Five Year Plan for Power System Development” all clearly indicated support for increased efforts in research & development and model demonstrations both in large-scale and distributed storage applications. 

The NEA also issued policy documents with significant implications for storage industry commercialization. In February there was the “Guiding Opinions on Promoting the ‘Internet+’ Smart Energy Development” (关于推进“互联网+”智慧能源发展的指导意见) which included sections directly related to storage, including "Promoting Centralized and Distributed Storage Collaboration" and "Developing Storage Networks and Informatization." While these documents may be of a "guiding nature," they have had a clear impact on industry growth and are responsible for a surge in storage technology companies applying for authorization of project demonstrations. If you take a look at the recently released roster of approved "Internet of Energy" projects you see many projects with storage directly mentioned in the title. 

In June the NEA released its first policy that directly supported energy storage: “Announcement on Promoting Electrical Storage Participation in Ancillary Service in the ‘Three Norths’ Region.” This allowed storage resources to be constructed at power generation sites to provide peak services and frequency modulation, or participate as an independent resource in the ancillary services market. The "Three Norths" policy is similar to the U.S. FERC Order 755, instituting a “mileage-based’ payment mechanism based on performance to increase the effectiveness of the compensation mechanism.

Q3: What are CHina's most profitable storage applications?

Pumped hydro can generate earnings through both capacity and electricity pricing schemes. Non-pumped hydro technologies can combine local storage subsidies with strategically storing and discharging energy during peak and off-peak times to save on power bills. This is currently the most profitable storage scheme in China. 

In northern China ("Three Norths" Region), storage can provide frequency modulation services for thermal power generation plants through compensation and penalty schemes for profit. 

Q4: What work remains in order to commercialize energy storage?

In the industry's early stages, subsidies are a must. However, in the long term a healthy industry development also needs to rely on free-market principles. 

Power systems and the storage industry are also interconnected. China is currently enacting broad-reaching electricity system reforms. However, despite storage's widely acknowledged importance, the market mechanisms that make storage commercially viable, like spot markets and ancillary service compensation, have yet to be instituted nation-wide. 

Under ideal market conditions, storage companies would only need to work on optimizing the quality-to-price ratio. America has reached this stage. China's storage players have to gain government approval for project demonstrations while also lobbying for policies to allow them to eventually enter the market.  

Q5: In the 13th Five Year Planning Period What kind of DEVELOPMENTS can we expect to see?

Energy storage currently has an investment return period between 7 to 9 years. In addition to this, its ROI, usually less than 10%, limits the attractiveness of investing in storage technology to low leverage companies or banks. Due to continuous breakthroughs in battery technology, we do foresee that 2017 will be a break even point for storage investment; at the latest this would happen by 2018. 

CNESA expert committee member, Lai Xiaokang, from the Chinese Academy of Sciences predicted back in 2012 that to in order to break even, storage systems need to exceed 5000 cycles with costs below CNY1500 per kWh. I agree with this prediction. 

Coming up in 2017 we have several projects under first round of "Internet of Energy" pilot demonstrations as well as many hybrid energy optimization projects. Following this trend towards distributed energy resources, storage applications will also have a corresponding increase. During the National People's Congress that just convened in March we were also very pleased to see a proposed development plan titled "Distributed Energy + Storage."

Q6: Do you think one storage technology will become dominant in the upcoming years?

It's hard to answer this question without considering specific applications. As a whole, I believe that in the upcoming 10-15 years many storage technologies will co-exist. Just look at Li-ion, which in itself already includes several other technologies like lithium iron phosphate, lithium titantate, lithium sulfur, lithium metal, etc. These all will continue to develop. Aside from the lithium chemistries and advanced lead batteries, there's also compressed air, flow batteries, Na-ion, aluminum, and magnesium batteries we should also keep an eye out for in the future.

Q7: What are your thoughts on the latest lithium Titante batteries? 

Again, to properly evaluate a technology you have to consider its application context. Lithium titanate batteries are relatively safe and long-lasting. If users can accept using these batteries over a long period then they are very competitive. However, if the user only wants to make a single investment and recover costs within 3-5 years, traditional Li-ion batteries are more appealing. 

Q8: What has CNESA done to Promote energy storage commercialization?

CNESA is currently organized into four branches: our alliance members, expert's committee, research think tank, and financial services assistance.

We work closely with Chinese industry leaders and government agencies along with collaborating with foreign companies and alliance organization partners. From the laboratory to marketplace, from domestic to international, we follow it all. Our research results are summarized in our annual white paper. 

With respect to promoting policy change, we are highly engaged in this field. Last year, on April 7, 2016, the NDRC and NEA jointly published the "Energy Innovation Action Plan (2016-2030)" to delineate China's energy innovation goals. CNESA organized our alliance expert's committee and industry members to contribute to the content and editing of the section titled, "Innovation in Advanced Storage Technology."

Our alliance also firmly believes that acquiring capital investments should not limit promising emerging technologies, and as such we are committed to helping startups build relationships with investors. Next month at our annual Energy Storage Conference & Expo, we will be holding the First Annual Energy Storage Innovation Competition. Our investment partners will be in attendance to learn more about promising technologies. 

Q9: Any advice for upcoming storage entrepreneurs?

There are no set rules to be an entrepreneur, everything depends on your ideals and convictions. At present, industry observers often say that whoever can establish a viable business model before power markets are established will become successful once these power markets begin operating. Companies with a wide-range of resources, say for example microgrid design or business/construction management, if these companies expand to include storage operations it will be easier than for companies emerging directly from the laboratory. However, uncertainties in markets and emerging storage technologies still bring opportunities (as well as risks) to startups.

All this uncertainty is a good thing since uncertainty is a prerequisite for creativity. I'd say now is the time to get in the market, since things will only pick up from here. You need to have three key requirements: a team, a technology, and a business model. Even if you only have one of these components, you can still enter the market and work on building up the others.   

CNESA Storage Market Analysis 2016 Q4

Global Movements:

In the 4th quarter of 2016, 37 storage projects totaling 189.4 MW began operating across the world. This represents a 95% increase over Q4 of 2015 and a 164% increase compared to Q3 of 2016. Over the past five years 2012-2016, installed storage capacity showed a CAGR of 125%. Total capacity installed during Q4 of 2016 also marked a 137% increase when compared to the same period last year, and a 196% increase since the previous quarter.

In 2016 Q4 84% of installed capacity was in the ancillary services sector, while distributed generation and microgrids came in 2nd with 14% of installed capacity. The ancillary service sector saw a 155% increase compared to Q4 last year and a 677% increase since last quarter, while the distributed generation and microgrid sector increased by 317% since Q4 last year and 748% since last quarter.  

Global Markets:

US: California and New York state were the most active markets this quarter. Market developments were also accompanied several announcements of storage-related policy.

Europe: England saw the most activity in Q4 especially with storage's participation in grid-side applications and capacity markets. 

APAC: Australia's storage deployments focused on residential solar + solar and centralized large-scale solar fields. Japan and India also deployed storage in large-scale solar fields.

China:

In Q4 of this year 10 projects came online with representing a total capacity of 18.9 MW. This marks a 25% increase over same period last year, and a 233% increase compared to Q3 of 2016. China's five-year installed storage capacity CAGR from 2012-2016 is 78%.

Q4 storage projects were largely in the distributed generation and microgrids sector, this sector has a five-year capacity CAGR of 92%, Distributed gen. & microgrid capacity increased by 147 % compared to Q4 last year and 116% compared to Q3 of this year.

This quarter, 85% of of operating capacity came online in China’s southwestern region, 9% in the East China, and 6% in South China. Projects along the coastlines of Southern and Eastern China focused on price arbitrage helping commercial users looking to save on energy bills. Projects in Western China aimed at increasing renewables consumption.

China Market Movements

Policy: on the national level several major related policy documents were released including the 13th Five Year Plan for Power Sector Development and 13th Five Year Plan for Renewable Energy Development as well as the National Electricity Demonstration Project Management Guidelines. Provincial and local policy developments were largely focused on multi-province electricity reform trials along with announcing ancillary service market operation regulations in China’s northeast.

Industry: Domestic market activity centered around construction of production centers, and launching project demonstrations individually and in coordinating with local governments, design institutes and other work units. Chinese engagement in the foreign markets largely involved establishing subsidiary companies and joint ventures as a means to enter local markets abroad and increase sales volume.

About the Tracking Project

CNESA began the "World Tracking Report" in 2017 to synthesize and share the data collected in the CNESA project database. Interested parties are welcome to contact the CNESA research department to understand more.

Beijing’s Demand Response Pilot: A Review

Since the launch of city-wide demand-side electricity management trials across China in 2013, the cities of Beijing, Shanghai, Suzhou, and Foshan have established their own demand response resource pools. Jiangsu Province also began demand response pilot spanning the entire province, and in the summer of 2016, implemented the world’s single largest (by load volume) demand response event to date. Through three years of trial periods, China’s demand response programs have largely been co-administered by the government and grid enterprises. Large-scale load aggregators have also played a supporting role integrating both business and residential power users, and several business and residential users have also taken the initiative to participate in demand response programs directly. In this article, we will provide an overview of Beijing’s city-wide demand response pilot as well as provide an outlook for the implementation of future demand response programs in China.

Beijing's demand response program was coordinated through the online DSM platform. 

Beijing Demand Response Pilot Implementation:

Large-scale load aggregators played an important role in systematically organizing Beijing’s demand response participants who opted-in to the program. Users with the capabilities to manage their own energy resources, however, were encouraged to participate independently to encourage the spread of energy informatization. The program was modeled on a six-step system: 1) contract agreement; 2) demand response event dispatch; 3) load allocation; 4) response feedback; 5) load reduction implementation & monitoring; and 6) verification.

The efforts of the 2015 pilot focused on the best ways to ensure stable grid operations and air quality during high-pollution periods. In the 2015 pilots, Beijing’s Municipal Electricity Demand-Side Management Platform served as the base for data collection and implementation of demand response events, though, alternative models comparing government-lead versus grid enterprise-lead implementation were also considered and explored.

 

Beijing DR trial implementation organization.

Platform Organization:

The demand response software accessible via Beijing’s Municipal Electricity Demand-Side Management online platform was used to serve load aggregators, collect the 15-minute interval real-time monitoring of user responses, set day-ahead response plans, notify aggregators of demand response plans, and request feedback to allocate the demand response load volume. In the event that demand response feedback indicated the currently allocation could not meet dispatcher needs, the demand response software automatically adjusted the allocations to meet the requirements and implement the plan. After the end of a demand response event, the software system calculated the baseline load volume and carried out secondary calculations to correct for incomplete data or errors.  

Compensation:

In the 2015 pilot, compensation levels were determined by participation category, providing compensation based on how far in advance users were notified before a demand response event. Notice times were 30-minute advance notice, 4 hours advance notice, and 24 hours advance notice. The 30-minute advance notice group received a payment of CNY 120/kW, the 4-hours advance notice received CNY100/kW, while the 24-hours advance notice group received CNY80/kW.

Program Principles:

The 2015 demand response commitment contract clearly states that the number of demand response events will not exceed 10, with each event’s load reduction to not exceed the total capabilities of the aggregated resource pool. The compensation was allocated according to the actual hourly response during each demand response event. Demand response events occurred only during the summer and winter seasons, with compensation calculated individually per season, with the total payment made after the end of the winter season. The total demand load was calculated according to the principles set forth by the National Development and Reform Commission in conjunction with the Beijing Municipal Power Demand-Side Management Service Platform. A third-party made additional verifications of response implementation, and payments were made in line with the established payment methods.

Implementation Highlights:

In the summer of 2015, the Beijing Municipal Grid experienced record-breaking grid loads.

On August 12 and 13, grid dispatchers organized 17 load aggregators and 74 individual users to participate in a demand response event, shaving 57 MW off of the peak load.

Between August 20 and September 2, 2015 two large events hosted in Beijing, the 70th Anniversary Celebration Commemorating the end of WWII along with the World Track and Field Championships represented a massive strain on the grid load. Beijing officials organized load aggregators and individual users to decrease demand during peak hours 2-3 hours each day over a 10-day period, ultimately shaving an accumulated 430 MW from the grid load.

Additionally, in winter 2015, the city municipal government issued several severe smog alerts. Beginning December 1st, officials organized 19 load aggregators and 136 individual users participated in seven demand response events lasting 14 hours each. According to preliminary estimates, this achieved a largest single-event load reduction of 170 MW.

User Analysis:

Power users participating in the 2015 Beijing demand response pilot were divided among industrial users, public facilities, and residential users. According to the cumulative data for the year, industrial users represented 93% of response volume, mainly in the manufacturing and mining sectors. Public facilities, including office buildings, hotels, business buildings, and sports arenas made up the other 7% of response volume. Residential users made up a relatively small portion of the 2015 resource pool with 0.4% of response volume, but this does not diminish the value of integrated residential response resources as a meaningful and important asset in future demand response programs.

Response Strategy:

During response events, industrial users controlled their electricity use through adjusting the use of manufacturing equipment. A portion of industrial users also adjusted climate controls, lighting, and ventilation. Public facilities generally acted in demand response events by modifying temperature controls and lighting, some even drawing from energy storage reserves to power their operations.  

There were three load aggregators that combined residential users as a demand response resource. Among them, one aggregator used heating and cooling controls to organize residential users in a small apartment block to participate in demand response. The other two residential aggregators used smart controls of electric appliances including air conditioners, hot water heaters, and water coolers to coordinate response steps remotely.

Thoughts on Next Steps:

As China is in the midst of upheavals reforming the electricity system and demand-side management, demand response is very likely to remain in the trial mode for the near future. As they stand, current electricity markets are unable to support full adoption of demand response markets, meaning governments and grid enterprises will still play a key role in the upcoming years.  

The trial stages have afforded provincial and municipal governments the chance to experiment with different implementation methods. One innovative policy in Jiangsu Province collects revenue from electricity sales during critical-peak times* to support the implementation of demand response programs. This reflects an economic equality among electricity price earnings and demand response value. Based on this method, many other cities could set up demand response program funds, and ensure applications of demand response.

The Need for Marketization:

Not all participants in demand response are driven my free-market principles, as in some administrative regions some users are effectively forced to participate to avoid even greater economic losses through imposed fines and penalties. While on the one hand, it’s important to begin the transformation to increase marketization of demand response instead of emphasizing fine-tuning the operational logistics, there remains much work to be done regarding investment costs, earnings calculations, and economic incentives as China undergoes series of power system reforms.

Conclusion:

During the trial period each trial city called upon load aggregators and electricity users to carry out demand response events but cutting down on their respective loads. Promising future directions include, participation via price competition, and the use of smart technology to coordinate alerting users of an event, the duration of the event, and controlling electric appliances. The demand response platform likewise can improve through providing more concrete services for government agencies, load integrators, and electric users in order to achieve an optimal and efficient coordinate demand response effort and ultimately ensure safe grid operations.

2016 and Beyond:

The Beijing municipal government has spent the 2016-year reviewing data from the 2015 trials. There was no demand response program for the 2016 period. We are awaiting announcements for plans for a potential 2017 demand response pilot continuation.

*Electricity price designation for the most expensive portion of “on peak” electricity.

This article has been translated from the original Chinese. 

Energy Storage Innovation Competition - Calling for Entries

International Competition for Innovation in Energy Storage

The China Energy Storage Conference and Expo was founded in 2012 with the support of the National Energy Administration and Zhongguancun Science Park. Now China’s most influential exhibition and conference covering the energy storage industry, China Energy Storage Conference and Expo serves as a platform to showcase the latest developments in storage solutions as well as promote policy changes and commercial applications of storage technology. In 2017, the International Competition for Innovation in Energy Storage was founded to recognize outstanding technologies, projects, and individuals for their contributions to the industry.

Entry Categories:

Prizes will be awarded to outstanding entries in the following categories:

Technology Prize:

To be awarded to the top 10 energy storage technologies/products. Nominations open to the general public for entries in the following categories:

• Physical storage
• Chemical storage
• Other storage technologies (supercapacitors, fuel cells, etc.)
• Battery systems (inverters, management systems, software, systems integrators)
• Energy storage solutions

Applications Prize:

Will be awarded to the top 10 applications in energy storage projects. Nominations will be open to the general public for entries in the following categories:

• Utility-scale, centralized, grid-connected applications (distribution/transmission-sited, ancillary services, etc.)
• Distributed projects (industrial, off-grid island storage, etc.)
• User-sited projects (residential systems, EV charging stations, military, data centers, etc.)

Leadership Prize:

Will be awarded to 5 outstanding individuals in the energy storage industry. Nominations will be open to the general public

Lifetime Contribution Prize:

Will be awarded to 1 individual who over his or her lifetime has made outstanding contributions to the progress and development of the energy storage industry. Nominations will be made by the expert’s committee, voting open to the general public.

Innovation Grand Prize:

Will be awarded to 1 entry from the Technology and Applications categories, as selected by the Evaluation Committee.

Winner Benefits

Innovation Grand Prize: The Innovation Grand Prize winner will receive an award of CNY 10,000

Promotion and Exposure. Winners will be given several opportunities to increase their exposure. At the 2017 International Energy Storage Conference and Expo conference, winners will be featured in the exhibit hall, connecting them to over 4,000 energy storage professionals from around the world. Select winners will also be invited for speech opportunities at the awards ceremony. Outside of the conference, winners will also have promotion opportunities through conference media partners, who will feature winning entries, as well as through official releases on CNESA media channels, including the conference website, WeChat, Twitter, etc.

Financial Support. Winners will have the opportunity to schedule one-on-one consulting services with Northern Light Venture Capital, Kaiwu Investments, Tus Holdings, Tsing Capital, DGJ, IDG Capital, and Sequoia Capital.

Project Recommendation. Winning projects will be directly forwarded to related government agencies to assist in gathering government-backed support. Winning projects will also be nominated for the China Energy Research Society’s “China Energy Innovation Prize.”

CNESA Membership Services. Winners will receive a free year of membership in CNESA, a copy of the complete edition of the 2016 white paper, and CNESA project evaluation services.

How to Nominate:

The nomination form and submission instructions can be accessed on the official competition website. 

Competition Timeline:

January 6, 2017 – March 10, 2017: nomination period opens. Nominations for the Technology, Applications, and Leadership Prizes can be submitted on the official conference website

March 11, 2017 – April 30, 2017: Voting period opens (all categories)

May 22, 2017: Winners chosen

May 23, 2017: Awards presented

The nomination forms and voting portals will be hosted on the official conference website. Winners will be selected by both the recommendations of the Experts Evaluation Committee along with online votes (accounting for 20% of total score).

Competition Organization:

Guiding Organizations: Chinese Association for Science and Technology, National Energy Administration 

Hosting Organization: China Energy Research Society

Undertaking Organization: China Energy Research Society Energy Storage Committee/China Energy Storage Alliance

Supporting Organizations: Global Energy Storage Alliance, California Energy Storage Alliance, Zhongguancun Advisory Board, Beijing Haidian Science Park, Tsinghua University Department of Electricity Systems, China Academy of Sciences Institute for Thermal Physics, Chinese Academy of Sciences Physics Research Institute, China Academy of Sciences Dalian Physical Chemistry Research Institute, China Electric Power Research Institute Department of Electrical Engineering and New Materials, Tsinghua University Energy Internet Innovation Research Institute, ENF Nengrongwang

Advisory Committee: Shi Dinghuan, Yi Baolian, Wu Zongxin, Yang Yusheng, Chen Liquan, Zhou Xiaoxin, Cheng Shijie, Yu Zhenhua (chair)

Experts Evaluation Committee: Chen Haisheng, Lai Xiaokang, Xia Qing, Zhang Huamin, Li Hong, Hu Xuehao, Jiang Liping, Wang Zhiming, Yue Jianhua, Guo Jiabao, Wang Zidong, Wen Zhaoyin, Yi Jin, Janice Lin, Mou Liufeng, Zhao Bo, Li Junfeng, Gao Feng.

China's Top 10 Storage Headlines of 2016

China's domestic storage industry made steady progress in 2016. Electricity system reforms continued to roll out while new regulations in China’s "Three North" Region (三北) allow storage to provide and receive compensation for ancillary grid services. All of these and more contributed to the industry's continued growth as well as carving out market space for future storage technologies. China Energy Storage Alliance (CNESA) has closely followed the market developments this year, and here are the top 10 take-aways. 

1) Storage Listed as "Key Technology" in National Energy Action Plan

On April 7, 2016, The National Development and Reform Commission (NDRC) along with the National Energy Administration (NEA) jointly released the “Action Plan for Innovation in the Energy Technology Revolution (2016-2030)” 《能源技术革命创新行动计划（2016-2030年）》classifying energy storage as one of the 15 “key technologies” to develop over the upcoming 15 years.  CNESA’s Expert Committee along with Alliance industry members worked together providing contributions to the “Innovations in Advanced Storage Technologies” section.

The Action Plan laid out goals for 2020, 2030, and an outlook for 2050 regarding thermal storage, compressed air storage, flywheel storage, high temperature superconducting storage, high capacity supercapacitor storage, as well as battery storage technology.

2) Liaoning Province Announced Plans for the World’s Biggest Chemical Storage Project

Dalian City's reform commission, in order to increase city and province-wide load shifting ability as well as curb curtailed wind energy, submitted plans for a 200 MW/ 800 MWh vanadium flow storage project. Once approved, this marked the first time the NEA has signed-off on a national-level large scale chemical storage project. Total investments for the project are at US$500 million with construction to begin by the end of 2016. The first 100 MW capacity is expected to be installed by the end of 2017 with the the remaining 100 MW coming in by 2018.

3) Energy Storage Conference & Expo 2016 Successfully Completed its 5th Year

On May 11, 2016 CNESA wrapped up the 5th annual Energy Storage Conference & Expo in Beijing. The event brought together policymakers, industry leaders, and technology experts for three days of high-level talks, networking, and collaboration. CNESA also released its 2016 White Paper announcing predictions for China's storage market to reach 24.2 GW by 2020 under ideal conditions, and 14.5 GW with business as usual conditions (all figures excluding pumped hydro storage).

CNESA is pleased to further announce the 6th Annual Energy Storage Conference & Expo is set to take place in Beijing May 22-24, 2017, with plans to release the 2017 White Paper at that time. 

4) China's North Opened to Energy Storage

On June 7, 2016 the NEA released “Announcement on Promoting Electrical Storage Participation in Ancillary Service in the ‘Three Norths’ Region” 《关于促进电储能参与“三北”地区电力辅助服务补偿（市场）机制试点工作的通知》 opening up power markets in China's North to energy storage. The announcement states that that up to five projects will be eligible to participate in peak regulating and ancillary services compensation mechanism trials. Payment, similar to United State's FERC Order No. 755 “mileage” payment mechanism, is based on services provided to increase effectiveness of the scheme. This announcement was a milestone in storage related policy, marking the first time storage received recognition to participate in providing grid services.

5) CERS Established Storage Committee, Naming CNESA Secretariat

The China Energy Research Society, a research body formed under the China Association for Science and Technology, founded an Energy Storage Committee in May of 2016 in order to promote academic exchange in the energy storage field, promote innovation, and provide a platform for collaborations and research discoveries. Soon after, the committee named CNESA as secretariat, together aiming to promote the implementation of industry-related policy, encourage exchange, and develop business models. On September 9th, 2016, the Committee convened for the inaugural meeting with attendees representing industry as well as high-level government agencies.

6) Chinese Premier Calls for Storage Technology Breakthroughs

On November 17, 2016, Chinese Premier, Li Keqiang, emphasized the need for technology breakthroughs in energy storage and microgrid technology. In order to meet China's goals to increase adoption of renewable energy resources, Premier Li stressed the need for energy storage. Additionally Premier Li called for increasing China’s global competitiveness in the energy technology sphere, calling for breakthroughs in microgrid technology and the construction of the “Internet+” Smart Energy, promoting grid system adjustability, increasing renewables consumption, and developing state-of the art high-efficiency energy technology. He also voiced the need for reforms in state-run energy enterprises, and increasing support for privately-run energy companies entering the industry.

7) NEA Project Guidelines Include Energy Storage  

On November 22, 2016, the NEA published the “National Electricity Project Demonstration Management Guidelines” 《国家电力示范项目管理办法》clarifying the application procedures for demonstration project assessment and approval. Among these guidelines, the document also states that energy storage projects fall under this jurisdiction. The release of the document marks a big step for energy storage, showing official, legal recognition by the National Energy Administration, thereby laying the groundwork for future storage projects, policies, and wide-scale implementation.

8) Battery Companies Massively Invested in Storage Projects

As more and more consumers move to purchase electric vehicles, supply has struggled to meet demand. As such, in 2016 companies like BYD, Lishen, China Aviation Lithium Battery Co., Guoxuan, and Optimum Nano released investment expansion plans. Additionally, lead-battery producers like Mengshine, Shuangdeng, and Narada invested heavily in constructing Li-ion battery production centers. On November 22, the Chinese Ministry of Information and Technology published a draft proposal on electric vehicle industry standards 《汽车动力电池行业规范条件（2017年）》 stipulating future Li-ion factories must have annual production capacities of 200 MWh. The figure, however, was later updated to 8000 MWh, a move which will likely further increase investments.

9) New Specialized Storage Companies Emerged

Several specialized storage companies were founded in 2016 deploying large scale storage production capacity totaling over 100 MWh. New companies largely originated in one of two ways: either 1) battery manufacturers and PCS companies combining with system integrators, or 2) PV manufacturers moving into storage applications.  In the first category, examples include Sungrow’s collaboration with Samsung SDI, Clou Electronics with LG Chem, and Eve Battery with Alpha ESS. The second category of PV manufacturers expanding to storage operations includes GCL Technology Integration Co. who recently founded GCL Integrated Storage announcing a 500 MWh annual capacity production center in Suzhou, along with Trina Solar announcing Trina Storage.

10) Electricity System Reforms Continue to Roll Out

Following the 2015 release of Document No. 9 (9号文) additional provincial, city, and regional-level reforms have begun to take shape introducing electricity retail reform pilots. So far, the NDRC has already reviewed plans comprehensive reform trials for 18 provinces and autonomous regions including Yunnan, Guizhou, Shanxi, Guangxi, Hainan, Gansu, Beijing, Hubei, Sichuan, Liaoning, Shaanxi, Anhui, Henan, Xinjiang, Shandong, Ningxia, Shanghai, and Inner Mongolia. The following 8 provinces and regions have also already launched retail reform pilots: Guangdong, Chongqing, Xinjiang Production and Construction Corps, Heilongjiang, Fujian, Hebei, Zhejiang, and Jilin. Additionally over 1,000 new electricity retail companies have been registered across the country.