A Look Ahead at 2016: A Message from CNESA Secretary-General Tina Zhang

2015 was a landmark year for energy storage in China.

Season's greetings from the China Energy Storage Alliance.

Season's greetings from the China Energy Storage Alliance.

In March, the government announced long-awaited power sector reforms that promise new opportunities for energy storage in an increasingly market-based power system.

Policymakers prepared the country’s next Five-Year Plan, the policy lodestone which will guide China’s development through 2020. This carefully crafted document is the key to meeting China’s ambitious energy and environmental targets.

And in the Paris COP21 talks, China emerged as a world leader by arguing that clean energy can be a tool to simultaneously address climate change and meet development goals.

Looking ahead, all indicators point to continued strong growth in clean energy and a greater role for markets and innovation in China’s transition to a more sustainable economy.

Of course, this transition is already well underway. As of September, China has installed 38 gigawatts of grid-connected solar, and the country reached 100 gigawatts of wind capacity earlier this year.

Now it’s our turn.

Energy storage is going to be a big part of China’s energy revolution, and policymakers know it. Last month, China’s national governing body called for increased deployments of energy storage and smart grids, higher penetrations of distributed generation, a greater share of renewables in China’s energy mix, more efficient and low-carbon dispatch, and greater numbers of electric vehicles on the road.

For now, China’s energy storage market remains dominated by pumped hydro: only 106 megawatts of China’s 21.9 gigawatts of energy storage capacity come from battery storage, according to CNESA’s Energy Storage Project Database. Nevertheless, this number still puts China among the top five countries in terms of grid-connected battery capacity, and installations are rising fast. On average, China’s battery storage capacity has more than doubled each year since 2010.

But it’s not just batteries making the news. In October, China’s top energy ministry collected bids for concentrating solar power generation demonstration projects -- most of which included molten salt energy storage. Several more gigawatts of CSP projects are in the pipeline, suggesting that thermal energy storage in China is finally starting to turn the corner. 

Where do we see the industry going in 2016 and beyond?

Microgrids and Distributed Generation

About half of China’s non-hydro energy storage capacity is paired with microgrids or distributed generation, and we foresee that these will remain strong growth areas in the coming year. Successful demonstration projects have proven that China’s islands and remote western regions are prime targets for energy storage deployments, while industrial parks, hospitals, data centers, and other urban buildings are now coming into the spotlight. And last July, the government announced a plan to promote renewable energy-based microgrids nationwide, a great sign for the development of solar-plus-storage in China.

Demand-side Management

There is enormous potential for energy storage in demand side management, thanks to policy commitments from the highest levels of government. Last year, Chairman Xi Jinping announced a campaign to promote efficient energy use in order to meet the country’s carbon emissions and air pollution targets. This drive – as well as our industry connections and technical knowledge – is why CNESA was selected by the Beijing municipal government to lead a demand response pilot program in Beijing. This past August, we helped reduce peak load by 70 megawatts just as demand was set to reach a new nationwide record.

Electric Vehicles

We’re also excited by the future of electric vehicle grid integration. It’s no secret that China’s EV market is booming; automakers sold over 130,000 plug-in electric vehicles in the first three quarters of 2015, double the number sold in the same period last year. This is a great step forward in the electrification of China’s transportation sector, but it also represents a huge challenge for Chinese grid operators – a challenge that energy storage and smart grid technology companies are well-positioned to solve.

While China's energy storage market is primed for growth, challenges still remain. 

China is still an emerging market, with all the risks that can bring. Regulatory changes are forthcoming, but there is still a great deal of uncertainty and a lack of well-defined value streams. That’s why our team works hard to keep you informed via our monthly newsletter, annual white paper, and customized market and policy insights.

Strong partnerships are also a must, which is one reason we organize China’s premier energy storage conference each year. In June, we held our fourth annual Energy Storage China Conference and Expo, our largest to date with over 700 attendees and 60 presentations from top policymakers, industry leaders, and energy researchers. The event is a great opportunity to learn more about China’s energy storage ecosystem and to make lasting partnerships in the world’s largest emerging market. I invite you to join us for next year’s event, to be held May 10-12th in Beijing.

Since 2010, CNESA has brought you the latest developments and opportunities for partnerships in energy storage. In 2016, I hope you’ll join us as we lead the way towards building a cleaner, smarter and stronger world. 

Dispatches from San Diego

This is part one in a four-part series on CNESA's trip to San Diego for the Energy Storage North America conference and expo. See parts two, three, and four.

We're happy to be here in San Diego. We're at the center of an energy revolution, and top industry leaders, academics and policymakers are here to show us what they've learned so far.

On the Ground in California’s Energy Revolution

Energy Storage North America 2015 began with site visits to San Diego’s most innovative energy storage projects. Byron Washom, director of strategic energy initiatives at UC San Diego, showed us how his university is leading the way in microgrids and  energy storage.

Byron Washom at the UCSD Microgrid.

Byron Washom at the UCSD Microgrid.

UC San Diego is operating a campus microgrid containing a diverse array of technologies, including solar PV-powered EV charging stations, fuel cell storage, thermal storage for cooling, diesel backup generators, and a number of interesting experimental projects that reflect the university’s commitment to exploring the next wave of energy storage technologies.

The first thing that strikes you about UC San Diego is its size. Washom commented that serving the electrical needs of the campus is akin to serving a city of 90,000 people. This has provided both challenges and opportunities for the school.

Maxwell's 30kW solar-smoothing system 

Maxwell's 30kW solar-smoothing system 

Washom has pioneered what he terms a “Motel 6” model for testing new energy storage systems. By laying the groundwork for a container-sized system in various locations on campus, he can carry out testing on whatever systems come his way. We saw a 30kW, 5-minute ultracapacitor installation by Maxwell, being used to smooth out fluctuations due to clouds in a solar PV array built on top of a university theatre. This system will be tested in conjunction with the university's solar forecasting system -- among the most advanced in the world.

BYD has also partnered with UC San Diego to provide a 2.5 MW / 5 MWh energy storage system located on campus. This is a big investment for a campus as large as a small city.

The school's microgrid not only serves the university, but has also helped the community of San Diego through a demand response partnership with the city’s utility, San Diego Gas & Electric. In a recent load event, the university activated its automation systems to adjust thermostats and other non-critical loads to transform the microgrid from an electricity importer into a 3 MW exporter. This 3 MW, Washom said, happened to be just enough to keep the grid up, clearly demonstrating how the right combination of technologies and practices are revolutionizing how utilities and consumers interact.

Keynote Addresses

In the evening, conference attendees met to listen to opening remarks from Janice Lin, conference organizer and founder of Strategen Consulting. She introduced James Avery, chief development officer of San Diego Gas & Electric, who argued that energy storage is the next big opportunity for cleantech players.

Taking a question from the audience about whether utilities had a role to play in the new world of distributed energy, Avery responded by pointing out that for California to reach its carbon emissions targets, the state will need to decarbonize – and thereby electrify – the entire transportation sector. With millions of electric vehicles needing to charge up, there will be a huge demand for electricity – both on a distributed and utility scale.

John Zaruhancik, the president of AES Energy Storage, spoke next. He announced a 20 MW storage project to be built in Dallas, in partnership with Oncor, a Texas utility.

He also talked about the broader meaning and importance of energy as a matter of human livelihood. AES Corporation, which operates the world’s largest fleet of grid-connected batteries, is active in countries which face energy insecurity and instability, such as the Philippines and the Dominican Republic. In his perspective, energy storage is another tool to make people’s lives better, by providing light to read, refrigeration for medicine, and the foundation for a modern economy.

“Clean, unbreakable power,” Zaruhancik said. “That’s what we really want.”

Our trip blog continues in part two for the first full day of presentations and coverage from the expo floor.