energy efficiency

China's Energy Innovation Action Plan

On April 18th, the NDRC and NEA released an “Energy Innovation Action Plan (2016-2030)", which aims to sharpen the country’s focus on energy technology innovation out to 2030.

China’s energy systems currently face a number of serious challenges due to resource insecurity, energy restructuring, pollution, energy inefficiency, and grid inflexibility. The Action Plan seeks to address these issues by highlighting fifteen areas for technological innovation:

  1. Coal mining risk reduction
  2. Unconventional, deep, and deep-sea oil and gas extraction
  3. Clean and efficient coal technologies
  4. Carbon capture and storage
  5. Advanced nuclear power
  6. Spent fuel reprocessing and radioactive waste disposal
  7. High-efficiency solar power technologies
  8. Large-scale wind power
  9. Hydrogen and fuel cell technologies
  10. Biomass, ocean and geothermal power
  11. High efficiency gas turbine technology
  12. Advanced energy storage
  13. Key grid modernization technologies
  14. “Energy Internet” technologies
  15. Energy saving and energy efficiency technologies

Here’s a closer look at what the documents say about energy storage, particularly in hydrogen and fuel cell technologies, and advanced energy storage.

Hydrogen and Fuel Cell Technologies

  • Research focusing on renewable energy and nuclear power-to-gas technologies, hydrogen production from next-generation coal gasification and methane reformation/partial oxidation, distributed hydrogen production, hydrogen purification, and development of key materials and technologies in hydrogen transport and storage. Research on methods to achieve low-cost and large-scale integrated hydrogen production, storage, transport and utilization. Research on hydrogen fueling stations, hydrogen production standards and business models.
  • ŸResearch on PEMFC technologies, methanol/air hybrid polymer electrolyte membrane fuel cells (MFC), new energy mobility power sources, and research on extended life PEMFC and MFC electric vehicle pilots and program expansion.
  • ŸResearch on distributed fuel cell battery technologies, in context of demonstration projects and scalable deployment.

Advanced Energy Storage Technology Innovations

  • Research on high-efficiency concentrated solar power (CSP) technologies and high-capacity distributed thermal storage systems. Research on methods to increase grid peaking capabilities and the use of physical energy storage to address local supply issues. Research into renewable energy grid integration, distributed microgrids, the use of electric vehicles as grid storage, mastery of core technologies in each stage of energy storage development. Verification of completed pilot programs, ensuring that all technologies meet international standards and that Chinese energy storage technologies and industry development are internationally competitive.
  • ŸActively research high energy density and low cost thermal energy storage technologies, new concept energy storage technologies (including liquid batteries, magnesium-based batteries, etc.), superconductor and electrochemical multifunctional hybrid energy storage technologies, and strive for key breakthroughs.

Power Retail Pilots Open in Guangzhou, Chongqing

Citic Tower, Guangzhou, Credit: wyliepoon / Flickr

Citic Tower, Guangzhou, Credit: wyliepoon / Flickr

This February, two major Chinese cities announced the launch of new electricity distribution pilot projects. In these projects, private electricity retailers will provide electricity services directly to consumers, representing a major step forward in China’s eagerly awaited power sector reforms.

The Guangzhou Development District

The first of these reforms takes place in Guangzhou. According to a policy released by the Guangdong Economy and Information Technology Commission, the Notice on Launching Retail Reforms in the Guangzhou Development District, entities within the Guangzhou Development District that consume at least 10 gigawatt-hours of electricity per year may participate in a direct electricity purchasing program. These entities may either purchase electricity in a bilateral agreement with generators or choose an electricity retailer.

As a result of these reforms, power plant owner Hengyun and Guangzhou Economic Technology Development Zone State-Owned Asset Investment Company, formed an electricity retailer, Guangzhou Suikai Electric Services. It’s important to note that the distribution grid is owned by the development district. As Hengyun owns generators that can serve the District and because the district itself – rather than China’s giant state-owned grid company -- owns the distribution grid, the entire value chain from generation to distribution is controlled by this newly-formed utility.

Although on paper it looks as if only consumers meeting a minimum consumption of 10 GWh will be able to participate in the retail market, it’s likely that smaller users will be able to participate by aggregating their loads.

Reforms in Chongqing

Retail reforms are also taking effect at an industrial park in Chongqing. On February 3rd, the Chongqing Liangjiang Changxing Electric Co. signed agreements with twelve businesses located at the Liangjiang New Area. Electricity sales to the first of these companies will begin this March.

This electric retailer was formed by four companies: Chongqing Liangjiang Group, Yangtze Power, Fuling Julong Electric, and Zhongfu Thermoelectric. Chongqing Liangjiang Group is a state-owned distribution grid developer responsible for the Liangjiang New Area. Yangtze Power, the country’s largest listed hydropower company, owns a number of large power stations including the Gezhouba and Three Gorges Dams. Fuling Julong is a state-owned enterprise primarily involved in power generation and retail, electrical equipment and transmission maintenance. Zhongfu Thermoelectric is a thermal generation owner.

The retailer formed by these companies covers each link in the power chain, from generation to retail. Although the distribution grid at the Liangjiang New Area is partly owned by the grid, any new additions will be built and owned by the retail utility.

The Role of Industrial Parks in Retail Reform

One reason that retail pilot projects are taking off in these two industrial parks first is the fact that the retailers in these cases are vertically integrated from generation to distribution. It’s important that in each case, the industrial park owner is a part owner of the utility, allowing the utility to gain control over the park’s assets – such as the distribution grid. Moreover, the utility is guaranteed to have customers in the companies that operate in the park. This vertical integration is expected to result in savings of 26 million yuan (US$4 million) in 2016.

It’s unusual for business and industrial parks to own their own distribution grids, which makes the Guangzhou Development District a special case. Though now that electricity retail is now opening up, yet-to-be-built industrial parks are likely to become a focus point in retail reform.

Where does energy storage sit in all of this?

For industrial parks with access to their own generation, retail reforms are likely to vastly reduce electricity prices. These reforms also open up possibilities for distributed generation and microgrid development, both of which do well when combined with energy storage technologies.

Additionally, now that retail companies are directly serving industrial parks, there is likelihood that consumers will have access to a wider range of services, including energy efficiency, energy management, and demand response. Freed from the shackles of the traditional grid system, energy storage has new opportunities ahead.