A Summary of Energy Storage Development in the First Half of 2018

Electrochemical Energy Storage Maintains Rapid Growth

According to the CNESA Global Energy Storage Database, in the first half of 2018, global newly operational electrochemical energy storage project capacity totaled 697.1MW, an increase of 133% from the same time the previous year, and an increase of 24% since the end of 2017.  China’s newly operational electrochemical energy storage project capacity for the first half of 2018 totaled 100.4MW, 14% of the total new global capacity.  This new capacity reflected an increase of 127% from the previous year, and an increase of 26% since the 2017 year’s end.

Figure 1: global new operational electrochemical energy storage project capacity (2018.H1, MW)

Figure 2: China’s new operational electrochemical energy storage project capacity (2018.H1, MW)

In comparing by distribution of technologies, in both global and Chinese markets, newly added energy storage capacity was dominated by Li-ion batteries, at 99% and 94% of the total, respectively.  In applications, ancillary services dominated the global market’s new energy storage capacity, at 51%, while China’s market saw grid-side energy storage dominate, at 42%.  In a regional comparison, the United Kingdom showed the greatest increase in both newly added capacity and in comparative growth with the same time the previous year (2017.H1).  The United Kingdom’s newly added capacity totaled 307.2MW, nearly 45% of the global market, an increase of 441% in comparison to 2017.H1.

Figure 3: distribution of global operational electrochemical energy storage by application (2018.H1, MW)

Figure 4: distribution of China’s operational electrochemical energy storage by application (2018.H1, MW)

Figure 5: global distribution of operational electrochemical energy storage by region (2018.H1, MW)

Global Competitors Release Large-Scale Energy Storage Projects

At the end of 2017, Tesla launched its 100MW/129MWh Li-ion battery project in Southern Australia. Following the launch of this system, many other countries followed with their own large-scale energy storage systems, with many in the 100MW and above range (see chart below).  Energy storage is being recognized by increasing numbers of countries as a reliable and flexible source of energy.

Chart: Representative Examples of Large-Scale Energy Storage Projects

Source: CNESA Data Collection

Domestic Grid-Side Storage Projects See Large-Scale Development

In the first half of 2018, Jiangsu and Henan provinces led the way in large-scale grid-side energy storage projects. Both provinces launched similar projects consisting of a total of over 100MW of distributed energy storage stations deployed near a series of substations.  Project investors included State Grid subsidiaries such as Xuji Group, Shandong Electrical Engineering, Jiangsu Energy Services Co, and Pinggao Group, as well as battery manufacturers ZTT, eTrust, CLOU, Lishen, and Narada, and additional PCS and BMS suppliers.  Though development on the projects has been vigorous and reactions have been positive, questions such as whether the business model will be replicable and what kind of investment returns can be expected will depend on whether the industry will continue to develop at a large scale.

The Question of Safety

The fire at South Korea’s South Jeolla wind farm battery storage system once again brought attention to the energy storage system safety.  Unstandardized installation and use of battery systems can have disastrous consequences, yet current standards are still incomplete and/or flawed, in dire need of update and clarification.  Despite these issues, we cannot deny the value of energy storage applications.  The energy storage industry must grapple with the challenge of how to clarify storage standards without hindering the development of the industry, a question that is worthy of further discussion and exploration amongst industry leaders.

Major Energy Companies Update Storage Business Models

Many traditional energy companies have begun turning their business activities towards renewable energy in response to global energy trends.  For some companies, this means establishing new renewable energy operations, while for others it means the acquisition of smaller renewable energy companies.  Many traditional energy companies have also looked for outstanding renewable energy companies for business collaboration, making use of each other’s advantages for mutual benefit.  Some energy storage companies have begun reforming their business practices to better fit market needs, striving to become more economical and effective and make better use of their advantages.  For example, S&C has discontinued manufacture of PCS, instead choosing to focus on microgrid and grid-scale energy storage system aggregation.  Mercedes-Benz has discontinued manufacture of its residential storage batteries, focusing instead on grid-scale energy storage applications.  Finally, Younicos has introduce its “storage-as-a-service” model to meet the immediate energy storage needs of customers.

National and Regional Support in Response to the Guiding Opinions

Following the October 2017 release of the Guiding Opinions on Promoting Energy Storage Technology and Development a number of new policy efforts have appeared at both the national and regional levels that support the goals of the Guiding Opinions.  These include such policies as the Bijie City Energy Storage Industry Development Plan (Draft), Regulations for Operations and Ancillary Services Management of Grid-Connected Energy Storage Stations in Southern Regions, North China Ancillary Services Market Establishment Plan (Draft), standards for lead-carbon batteries and Li-ion batteries used in energy storage systems, and many other recent policy measures that have helped to stimulate the domestic energy storage market.

Author: Ning Na
Translation: George Dudley

A Look at China’s 2018 New Market Competitors

According to statistics from CNESA’s Global Energy Storage Project Database, in the first half of 2018, China’s new operational electrochemical energy storage capacity totaled 100.4MW, an increase of 127% from the same time the previous year.  Newly added electrochemical projects either planned or under construction totaled 2251.1MW.  With the scale of energy storage projects rapidly increasing, the market has seen a number of new players eager to make their name in a variety of energy storage applications.

I.       Frequency Regulation/Ancillary Services

Combined thermal power and energy storage frequency regulation projects continue to thrive in 2018 through the activities of numerous market competitors:

1.       WLY Group (万里扬集团有限公司)

In June, WLY group won a bid to supply Guangdong Yudean Power Generation Co. with a 9MW/4.5MWh combined thermal generation and energy storage frequency regulation project.  The winning bidder is responsible for engineering that includes equipment and debugging, electrical testing, grid connection, etc.  Construction on the project began in July.  The project signifies WLY Group’s formal entrance into the ancillary services market.  WLY was China’s first auto transmission company to go public.  The company provides transmissions for use in passenger cars and commercial vehicles, as well as drive systems for electric vehicles and interior components.

2.       Huatai Energy (Beijing) Tech.Co.,LTD (华泰慧能(北京)能源技术有限公司)

In August, Huatai Energy won an EPC bid to supply Inner Mongolia Power Generation Co. (IMEIGC) with a 9MW/4.5MWh frequency regulation project.  The project distributes shared earnings from AGC compensation. Huatai Energy was founded in 2016 and specializes in energy storage technologies.

3.       Zhejiang Wanke Renewable Energy Technology Co. (浙江万克新能源科技有限公司)

In May, Inner Mongolia Power Generation Investment Group announced the candidates for bidding on the new 9MW/4.5MWh frequency regulation project at the Wusitai thermal plant.  Wanke beat out both Narada and Shenzhen Advanced Clean Energy Technology Research Co. for the bid.  According to publicly released information on the tender, although Wanke’s proposed cost of 39,800,000 RMB for the project was higher than Narada’s proposed 37,500,000 RMB, Wanke’s proposal of a 50-50 share of investments return with the plant owner went far beyond the traditional return of 70-80% for the investor and 20-30% for the plant owner.  Wanke Renewable Energy was founded in 2015.  This project is the first domestic energy storage project for the company.

II.       Behind-the-meter

Wiscom (江苏金智竞泰储能科技有限公司)

In August, Wiscom released plans to construct a 500kW/1000kWh behind-the-meter energy storage system at the Huitong screw factory in Qidong.  The project is a collaborative development between Wiscom, the Huitong screw factory, and State Grid Jiangsu Energy Services Co.  Wiscom is an energy storage company formed in June of this year by a cooperative investment of 50,000,000 RMB between four energy companies.

III.       Grid-side

1.        Golmud Meiman Renewable Energy Technology Co. (格尔木美满新能源科技有限公司)

In July, Golmud Meiman begin construction of its 16MW/64MWh grid-side energy storage project at the Haixi 110KV Baiyang substation.  The project is the first grid-side energy storage project lead by State Grid Qinghai, and the first grid-side project for Golmud Meiman.

2.       Xi’an Actionpower Electric Co.,Ltd.  西安爱科赛博电气股份有限公司

In August, Henan Power Grid announced a call for bids for the second round of equipment purchases for its 100.8MW/100.8MWh battery storage demonstration project.  This second round of bids seeks 59 sets of energy storage equipment.  Bidders during the first round included well known energy storage companies such as EVE, ZTT, and Lishen, among others.  During this second round of bidding, Actionpower submitted bids to supply four containerized energy storage systems at the Xinyang energy storage station.  The company’s total bidding was more than 900,000 RMB lower than that of EVE.   Actionpower was founded in 1996.  The company is currently expanding from its main business focus of power inverters and power control products to explore renewable energy and smart microgrid technologies.  Actionpower’s bid for the Xinyang energy storage power station marks the company’s first foray into energy storage.

Summary

Active players in the 2018 energy storage market include specialized energy storage companies such as Huatai Energy and Wiscom, as well as companies heavily involved in renewable energy and/or the power industry that have recently begun expanding into energy storage activities, such as Golmud Meiman, Vanke Renewables, and Actionpower.  Other new players even include electric vehicle manufacturers such as WLY Group that have begun investing in storage projects.

In terms of market strategies, these players have frequently used low-costs to gain an advantage in the market.  These competitors have expanded the traditional project earnings models while exploring new and varied storage business models

Author: Cao Zhengxin
Translation: George Dudley

CNESA Hosts its First Webinar Event: Introducing the California Energy Storage Market

On September 5, the China Energy Storage Alliance Held its first webinar event, “Introducing the California Energy Storage Market.”  The hour-long webinar was hosted by George Dudley of CNESA, with guest panelists Melanie Davidson, Director of Marketing at Strategen Consulting, and Terry Maddox, Principal Manager of Generation for Eastern Operations at Southern California Edison. The webinar content included an overview of the California energy storage market, an introduction to SCE’s Center Hybrid energy storage facility, and highlights from the upcoming Energy Storage North America conference.   

Melanie Davidson begin the webinar by providing background on the current state of California’s energy storage market, highlighting some of the factors that have contributed to the growth of energy storage in the state.  California currently possesses 717MW of operational energy storage capacity, with 463 MW of approved additional capacity on the way.  Northern California electricity provider PG&E has also recently announced a procurement target of 567MW of energy storage, the largest such procurement goal ever released.  Recent government developments of note include SB 700, a bill that will continue funding for SGIP until 2025, providing an additional 800 million USD of funding for storage incentives in California.  The bill has already passed the state senate and is currently waiting for approval by governor Jerry Brown. An additional bill of note awaiting approval is SB 100, landmark legislation to commit California to 100% renewable energy by 2045. Should both bills be approved by the governor, California can expect to see significant growth in both front-of-the meter and behind-the-meter energy storage systems.

Melanie also provided information on the Energy Storage North America 2018 conference, to take place this November 6-8 in Pasadena.  The event will feature three days of forums, workshops, and expo events.  Pre-conference workshops include “Energy Storage 101,” “Trends in the Electric Power Industry and the Growing Role for Energy Storage,” “Best Practices in Utility Procurement of Energy Storage,” and others.  The seven forum tracks include such themes as “Mobility and Storage,” “Advanced Solutions,” “Microgrids, Resiliency, and Security,” and “North American Market Transformation.”  This year’s site tour program includes 8 different centers and installations, including Proterra’s West Coast Battery-Electric Bus Manufacturing Facility, the Romeo Power Manufacturing Facility, LADWP Beacon Solar Plant and Beacon Energy Storage System, and a variety of other tours.  The ESNA conference is one of the largest energy storage events in North America, and the can’t-miss event for industry members.  More information on the event can be found on the official website at esnaexpo.com.

Terry Maddox of Southern California Edison followed with an introduction to SCE and in-depth look at the Center Hybrid facility.  Southern California Edison is one of the largest electricity providers in California, providing 87TWh of energy annually to 15 million customers.  The Center Hybrid facility combines a 10MW/4.3MWh battery energy storage system with a 50MW traditional gas-fired peaking unit.  The facility cuts down on greenhouse gases, provides 50MW of operating reserve, instant response, primary frequency response, and black start capabilities.  The battery component helps lower fuel consumption, reduces system costs, and increases customer value.  The Center Hybrid facility is one of two such systems, both of which have been extremely successful so far.  Following Terry’s presentation, the webinar concluded with a brief question and answer session.

The webinar event also served to highlight CNESA’s planned visit to the Energy Storage North America Conference in November 2018.  CNESA will be bringing a group of China’s energy storage industry delegates to the Los Angeles area November 5-12 to participate in the ESNA forum and expo events, while also touring additional sites in the Los Angeles area.  The event hopes to provide opportunity for exchange between industry members in the United States and China, fostering understanding of the most recent updates in the global energy storage markets, and building new international business relationships.

China Energy Storage Alliance hopes to host more webinar events in the future, providing a chance for our energy storage colleagues in China and abroad to connect with one another and learn more about the latest energy storage technology, applications, and market trends around the world.

Click below to view the recording of the webinar:

Four Storage Companies of Note in the First Half of 2018

CNESA’s Industry Tracking Database reveals four companies that have made significant advancements in energy storage projects and new business activities in the first half of 2018: eTrust, Narada, CLOU, and CATL.  Below, we examine some of the highlights of each company’s new progress in energy storage.

eTrust: An Energy Storage “Upstart” Comes Out Ahead

On July 18, China’s largest scale battery energy storage station, the Jiangsu Zhenjiang grid-side 101MW/202MWh project, began operation.  Of the 8 energy storage stations constructed as part of the project, eTrust, China Aviation Lithium Battery, CATL, Guoxuan, and ZTT each won bids to provide lithium ion battery systems.  Of these, eTrust provided the largest battery, at 40MW/80MWh, nearly 40% of the project’s total capacity.

As a Zhenjiang based company, eTrust possessed a geographic advantage during the bidding process.  More importantly, the company also possesses top lithium ion battery technology and a body of experience initiating successful projects.  eTrust was established in Zhenjiang in June of 2016 as a holding company of CITICPE. Despite being a relatively young company, eTrust has already established 7 centers for manufacturing and R&D.  eTrust’s project experience includes the Yangyi solar-plus-storage project in Tibet, a 52.8MWh grid-side battery project in Ontario, Canada, and a 9MWh grid-side energy storage project in Irvine, California.  With the Zhenjiang grid-side battery project now added to its list of successful projects, eTrust has become a major energy storage player in just two years.

Narada Power: Frequent Winner of Behind-the-Meter Storage Projects and Collaborator on New Initiatives

According to CNESA’s Project Tracking Database, of newly operational electrochemical energy storage projects in 2017, Narada Power supplied the largest capacity, the majority of which was concentrated in behind-the-meter applications.  In the first half of 2018, Narada’s behind-the-meter storage maintained this momentum, with the company participating in a variety of projects.  Most of these projects were distributed across Jiangsu province and utilized the company’s “investment-plus-operations” model.  The Zenith Group 400MWh energy storage station is currently Narada’s largest contracted singular project, and has been a great achievement in the use of large-scale energy storage for commercial applications.  In addition, the Jiangsu Grid Corportation’s efforts to curb summer electricity peak prices in eastern Zhenjiang has also relied on the use of behind-the-meter energy storage projects powered primarily by Narada Power’s lead-carbon batteries, with over 500MWh being put to use.

In the first half of the year, Narada has also established strategic partnerships with other companies.  One example is Narada’s energy storage partnership with China Resources Power.  The partnership includes cooperation on power sales and purchases, construction of a microgrid storage system, and development of incremental distribution and storage.  Narada has also partnered with State Grid EV Service on a number of projects and initiatives, including promotion of the National Grid Energy Storage Cloud Service, exploration of new business models, demand response dispatch, green energy trading, ancillary services for grid stability, safety, and reliability, and orderly development of the grid system.

CLOU Electronics: A Major Player in the “Thermal Plant Plus Energy Storage” Frequency Regulation Service

According to statistics from the CNESA Project Tracking Database, as of the 2017 year’s end, China had in operation three combined thermal plant and energy storage projects, one of which included CLOU Electronics’s 9MW/4.478MWh project at the Tongda power plant in Shanxi.  In the first half of 2018, CLOU continued to develop its combined thermal plant and storage frequency regulation, engaging in a total of 90MW of projects across Shanxi, Inner Mongolia, Hebei, and Guangdong provinces.  These projects include the Guangdong CR Power Haifeng 30MW/14.93MWh frequency regulation project, which surpassed the Inner Mongolia 18MW/9MWh Shangdu power plant project as the largest thermal power plant plus energy storage frequency regulation project.

CLOU has potential to lead the country in the “thermal plant plus energy storage model.”  CLOU has already developed components such as energy storage batteries, BMS, PCS, EMS, and other key technologies while also providing systems integration services, allowing the company to provide a full range of storage solutions. With provinces such as Shanxi and Guangdong beginning to release market regulations that allow energy storage to take part in frequency regulation services, CLOU now has more opportunities to put its technological knowledge and project experience to work in new storage markets.

CATL: Working to Solidify the EV Battery Business While Advancing Grid-Side Energy Storage

In the first half of 2018, CATL continued to expand the EV battery business that it is most known for.  In March, CATL launched its IPO, with plans to raise 13.12 billion RMB, add 24GWh of production capacity, and invest 4.2 billion RMB in R&D for two projects the Huxi lithium-ion battery production plant project and an EV and energy storage battery research project.

While CATL expands its EV battery business, it has also made new strides in energy storage.  The company has recently begun exploring grid-side storage, including the Jinjiang Li-ion energy storage project.  The three stage project plans to begin with a system of 100 MWh, expanding to 500 MWh and finally 1000 MWh in the third stage.  The project is largely intended to support the Quanzhou city power grid dispatch, providing ancillary services for the local network.  CATL also won a bid to provide a grid-side energy storage project to eastern Zhenjiang, providing a 10MW/20MWh Li-ion energy storage system for the Xinbai storage station.

Aside from experimenting with renewable integration and behind-the-meter storage, CATL has also explored other applications.  The independent energy storage station in Jinjiang is the first time the company has tried grid-side energy storage.  With the continued development of electric vehicles and the energy storage market, CATL’s advanced battery technology is more than likely to continue expanding its energy storage into new and diverse areas.

Summary:

The projects developed by eTrust, Narada Power, CLOU Electronics, and CATL in the first half of 2018 were largely concentrated in grid-side, behind-the-meter, and ancillary services applications.  In terms of technology, lead-carbon batteries and Li-ion batteries were most frequently utilized in the first half of 2018.  Geographically, Jiangsu province lead the way in both number of new projects and total new capacity, reflecting how the province’s energy storage industry has benefited from policy support as well as its energy arbitrage system for industrial customers.

The strong market in the first half of 2018 will hopefully carry into the year’s second half, bringing further development to behind-the-meter, grid-side, and ancillary services applications.  As electricity reforms continue to advance, energy storage will have more opportunities to participate in the electricity market, helping to build greater confidence among vendors.

Author: Cao Zhengxin
Translation: George Dudley

Large-Scale Energy Storage Projects Around the Country Suggest 2018 Will See a Surge in Energy Storage Growth

China’s energy storage market saw a boost of policy support in 2017, from the release of the first national-level policy on energy storage—the Guiding Opinions on Promoting Energy Storage Technology and Industry Development—as well as regional energy storage policies such as those released in Jiangsu province, China Southern Grid, and others.  According to the CNESA research department’s domestic energy storage market tracking, the first half of 2018 saw the announcement of new energy storage project construction in Jiangsu, Henan, Qinghai, and Guangdong provinces.  These projects varied in scale from tens of megawatts to hundreds, and altogether totaled 340.5MW (including those projects planned, under construction, and already operational).  This combined new capacity nearly equaled the country’s total accumulated operational capacity of 389.4MW at the end of 2017 (source: CNESA Global Energy Storage Database). Thus far, 2018’s newly operational capacity has already achieved growth 281% higher than that of the entire 2017 year.  If the entirety of this new capacity begins operation on schedule, China’s domestic energy storage market will see an amount of growth that will make 2018 one of the most significant years yet for the industry.

When it comes to electricity, Jiangsu, Henan, Qinghai, and Guangdong provinces differ in a variety of ways, including power structure, power consumption, electricity pricing, distribution of resources, and policy support.  Such differences have naturally influenced the ways in which these provinces have implemented energy storage.

Jiangsu: Grid-side and Behind-the-meter Energy Storage Projects Work Together to Alleviate Zhenjiang’s Summer Power Loads

In response to Jiangsu province’s supply-side structure reforms and to implement the province’s “263 plan,” three generators of the Jianbi power station--totaling 33,000 kW--were shut down in 2017, having reached their age limits¹. The Jianbi power station provides power to Danyang, Yangzhong, Zhenjiang New District, and other regions of eastern Zhenjiang. The shutdown of these generators left this area with a significant power shortage. With summer loads increasing each year, the eastern region was faced with unprecedented peak load pressure this summer.

In light of these challenges, in May of 2018, State Grid Jiangsu Energy Service Co., Xuxu Group, and Shandong Electric together initiated plans for the construction of large scale grid-side and behind-the-meter storage projects in eastern Zhenjiang.  The projects capitalized on energy storage’s short construction period, flexible deployment, rapid response time, and other advantages to effectively reduce pressure on the grid.  Grid-side projects included eight energy storage power stations equipped with lithium iron phosphate batteries at a total scale of 101MW/202MWh.  Providers include ZTT Energy Storage, CLOU, eTrust, and other domestic companies.  Behind-the-meter storage has largely been supplied by Narada’s lead-carbon batteries at a total capacity exceeding 500MWh.

Henan: Developing the First Large Scale Grid-Side Energy Storage Project in the Central Region

Henan is one of central China’s major provincial power consumers.  The province possessed 66,570 MW of thermal generation capacity at the end of 2017, the fifth largest in the country.  To better adapt to new energy trends and promote the transition to new energy systems, Henan province released two policies in 2017, the Henan Province Energy Development Program for the “Thirteenth Five-Year Plan”  and the Henan Province Development Plan for the Energy Transition.  These policies highlight the use of renewables in the next generation of energy development, avoiding fossil fuels and promoting the construction of wind power projects and greater exploitation of solar power. The policies also explore the creation of ancillary service markets, encourage increased investment in grid infrastructure, and show support for the development of a national electricity spot market. Energy storage in Henan province has great development potential in wind power, integrated solar, frequency regulation, peak shaving, and T&D deferral.

In the second quarter of this year, Henan Grid experimented with its first megawatt scale grid-side battery storage project.  The project is currently Henan’s largest battery storage project, as well as one of China State Grid’s three largest storage projects of the 2017 year. The project is spread across 16 substations in 9 regions and can be charged during non-peak hours and release energy during peak periods.  The project also provides stability for wind and solar power and increases the efficiency of grid operations.  So far, two calls for bids have been announced, calling for capacity of 90MW/90MWh.  Companies including Lishen, Narada, and CLOU have submitted bids.  Of these bids, the Huanglong substation and Longshan substation projects have already begun operations.

Qinghai: Energy Storage Technology Supports Wind and Solar Resources

Qinghai possesses plentiful solar and wind resources with great potential for development.  Solar energy provides a potential 3 billion kilowatts of power, while wind resources provide a potential 75 million kilowatts.  Solar power has already become the second largest source of electricity in Qinghai, after hydroelectric power.  However, the large-scale addition of these resources to the grid has also brought safety and stability concerns, wind/solar curtailment issues, and problems related to the coordination of multiple clean energy resources.  Energy storage can help combat these problems by serving as a supporting technology, with enormous development potential for renewable integration, solar and wind curtailment reduction, frequency regulation/ancillary services, and other applications.

Huanghe Hydropower has been a leader in the clean energy industry.  The company’s efforts to develop diversified models for clean energy and create large-scale solar and wind power stations have also begun to include energy storage.  In June of this year, Huanghe Hydropower’s 1000 MW combined hydro-solar-wind demonstration project successfully connected to the power grid.  The project also included a 20MW/16.7MWh energy storage component.  In addition, Huanghe Hydropower has recently released calls for bids for energy storage support for 45 thousand kilowatts of wind power in Gonghe county and 10 thousand kilowatts of wind power in Wulan county.  The company has called for 45MW/90MWh and 10MW/20MWh of energy storage capacity, respectively.  The projects will rely on a variety of storage technologies, including lithium iron phosphate batteries, lithium ion batteries, zinc bromine flow batteries, and vanadium flow batteries.

Guangdong: Opening the Door for China Southern Grid’s Thermal Power and Storage Frequency Regulation

Shanxi has consistently lead the way in China’s combined “thermal power plus storage” frequency regulation model.  By the end of 2017, Shanxi had initiated a total of three thermal power plus storage frequency regulation projects, the only operational projects of their type in China at the time.  Two of the projects were developed by Ray Power and one was developed by CLOU.  The total storage capacity of the three projects equaled 9MW/4.5MWh.  Apart from Shanxi, Inner Mongolia and Hebei also began involvement in thermal power plus storage frequency regulation projects, the largest of which was CLOU’s  18MW/9MWh frequency regulation storage project in Inner Mongolia.  The combined thermal plant generator and energy storage system provides frequency regulation services, improving the frequency regulation capabilities of the thermal generator, reducing the risk of receiving penalties, and providing financial benefit to the plant.

Starting in Guangdong province, China Southern Grid has begun experimenting with power market reforms, including reforms to the ancillary services market.  Southern Grid has released the Guangdong Frequency Regulation Market Transaction Regulations (Trial) and begun trial operations, allowing third party ancillary services providers and generation companies to take part in the ancillary services market.  In the second quarter of this year, following Shanxi, Inner Mongolia, and Hebei provinces, Guangdong announced four “thermal power plant plus energy storage” combined frequency regulation projects at a combined capacity of 57MW/28.5MWh.  The largest of these plants is the CLOU project at the China Resources Power plant in Haifeng with a capacity of 30MW/15MWh.  Guangdong has become the first China Southern Grid region and the fourth province nationwide to develop a combined thermal power plant and energy storage frequency regulation project.

Summary

Storage projects in the four provinces above have been noteworthy for their harnessing of a variety of energy storage technologies, including lithium ion batteries, lithium iron phosphate batteries, lead carbon batteries, vanadium flow batteries, and zinc bromine flow batteries.  In addition, apart from the typical energy storage applications in renewable integration, frequency regulation, and behind-the-meter applications, Jiangsu and Henan provinces were the first in the nation to release 100 megawatt level grid-side projects, providing promise for future large-scale grid-side projects in other regions and perhaps nationwide.

The Jiangsu and Henan grid-side applications also exemplify the role of grid companies as key users of energy storage technologies. Although market mechanisms are still taking shape and the full value of energy storage applications have not yet been recognized, enthusiasm from grid companies is a positive signal providing energy storage companies with confidence.  At the same time, these projects also provide a variety of real-life data for market regulation policymakers, providing support for the growth of the energy storage market across the country.

¹The “263 Plan” is an initiative implemented by the Jiangsu provincial government and Suzhou city government to meet the central government’s environmental protection requirements and promote the construction of practical and environmentally friendly infrastructure.

Author: Ning Na
Translation: George Dudley

China’s First “Grid-Side Distributed Energy Battery Storage Station” Completes Successful Grid Connection

On June 18th, 2018, Henan Power Grid’s 100 MW energy storage demonstration project—the Luoyang Huanglong station containerized battery storage project—completed its successful connection to the grid.  The project marks a critical step for grid-side distributed battery storage in China.  The project will provide Henan Power Grid with load shifting services and promote the use of renewable energy within the grid.  The project is the first grid-side 100 MW scale distributed battery storage demonstration in China.

The grid faces a number of challenges, including the rapid addition of renewable energy, ensuring safe operations, finding suitable peak shaving methods, and financing of new construction.  Large-scale battery storage provides response time in milliseconds, providing safe and speedy power support to the grid.  Battery storage also provides new strategies for peak shaving and limiting air pollution, and can increase the efficiency in which energy is utilized in a variety of ways.

The Henan Power Grid project has been led by the Pinggao Group (a subsidiary of China State Grid) with construction by Luoyang Power Supply company.  The project includes 16 substations in nine regions, including Luoyang and Xinyang.  The plan utilizes distributed deployment, modular design, independent connections, and centralized dispatch. 

Now that the project has successfully connected to the grid, Pinggao Group is expected to increase project construction speed to complete the remaining project components. The project is scheduled to be fully complete before the end of 2018.  Pinggao Group has in recent years been an active promoter of large-capacity battery storage technology and innovative business models.  The successful implementation of the Henan Grid project will be an important trial for the use of large-capacity distributed battery storage, and a significant contribution to the goals of the Guiding Opinions on Promoting Energy Storage Technology and Development.  The project creates a basis for commercialized applications and sustainability in the power grid, and is an important step for China in the advancement of the energy revolution and energy internet development.

China Energy Storage Alliance Joins ADB Asia Clean Energy Forum 2018

The Asian Development Bank held its annual Asia Clean Energy Forum 2018 the week of June 4-8 at ADB headquarters in Manila, Philippines.  The forum, one of the largest clean energy events in Asia, featured a wide variety of presentations, discussion sessions, and deep dive workshops covering a diverse range of themes such as Innovations in Energy Efficiency, Innovations in Renewable Energy, and Increasing Energy Access.  The event was attended by over 1,000 guests from throughout the Asia-Pacific region.

The China Energy Storage Alliance is proud to have taken part in the “Battery Energy Storage Technology for Clean Energy” Deep Dive Workshop held on June 8th.  CNESA representative George Dudley delivered a presentation introducing China’s energy storage market and policy environment.  Representatives from the India Energy Storage Alliance and Korea Battery Industry Association also delivered presentations providing background on the energy storage policy environments in their own countries. In addition to energy storage policy, other forum themes included economics & financing, grid applications (such as frequency regulation and demand response), and renewable integration.  Over a dozen expert presenters from the non-profit and private sectors shared their knowledge and experience on battery energy storage.

Since 2006, the Asia Clean Energy Forum has been bringing together clean energy experts, developers, policymakers, non-profit organizations, and more.  Learn more about the ACEF conference at the official website.  The China Energy Storage Alliance, the first non-profit dedicated to energy storage in China, was founded in 2010.  Representing over 200 member organizations from all aspects of the energy storage industry, CNESA serves as the voice of energy storage across China.  CNESA’s own International Conference and Expo is held in May of each year. 

ESIE 2018 Media Report – Which Energy Storage Application has the Greatest Prospects for the Future?

Author: DiDi Beijixing Energy Storage Online

In recent years, the value of energy storage has become increasingly clear, whether in behind-the-meter, ancillary services, renewable integration, or other applications.  Yet when it comes to economic benefits, energy storage business models are still in an exploratory stage.  There are still many questions to be answered. What direction can energy storage develop in in the future?  How do we uncover energy storage’s potential? The author visited the 7th annual Energy Storage International Conference and Expo (ESIE 2018) to learn more about the future of energy storage in China.

According to statistics from the CNESA Global Energy Storage Project Database, as of the 2017 year’s end, China’s total operational energy storage capacity totaled 28.9GW, an increase of 19% from the previous year.  Pumped hydro energy storage made up the majority of this capacity, at nearly 99%. Electrochemical energy storage capacity totaled 389.8MW, an increase of 45% from the previous year. In a comparison of new electrochemical energy storage capacity by applications, in 2017, behind-the-meter energy storage made up 59% of the total of new applications.  Renewable integration came in second at 25% of the total new applications.

Energy Storage Provides New Energy with “Value-Added Services”

As the use of New Energy sources continues to increase, the energy structure faces a transformation.  In the future, as solar, wind, hydro, and other New Energy sources occupy a major portion of China’s energy supply, energy storage will be an important part of the country’s entire energy industry. In recent years, China has promoted multi-energy systems, wind+storage/solar+storage, and other demonstration projects.  Energy storage not only contributes to a more effective use of energy, decreasing wind and solar curtailment, it can also stabilize power generation, increase the quality of electric energy, and contribute to the balancing of grid loads.

Take solar PV as an example.  In its earliest stages, the manufacturing costs for solar PV were high, and companies focused most of their efforts on lowering such production costs and technology R&D.  With the maturation of the market and technological breakthroughs, solar energy manufacturing costs fell rapidly, bringing about opportunities for energy storage.  Energy storage can help to improve the quality of PV electricity and ease pressure on the grid.  Currently, there are many solar+storage projects in operation which help to prove through practice the value of energy storage in new energy grid integration.

Once such project is located in Shaanxi.  In 2017, Shaanxi Province’s Dingbian County achieved a total installed PV capacity of 1500MW.  In 2016, the county’s solar curtailment rate was near 10%.  The 10MWh Dingbian Li-ion battery system’s load shifting program brought relief to the curtailment issue.  The project utilized Dynavolt’s MW-scale container-style battery module technology.  Operating in conjunction with the PV station, the battery absorbs excess power, activating based on PV power prices, providing load shifting services and contributing to use of local power.

Marketization is the Outlet for Energy Storage in the Grid

The five stages of the power system—generation, transmission, transformation, distribution, and end use—all can experience the value of energy storage.

In electricity generation, energy storage can participate in ancillary services such as frequency regulation and peak shifting.  However, China’s ancillary services market is still in an exploratory stage, and questions such as proper pricing and transaction mechanisms have not yet been resolved.  While some companies have implemented frequency regulation projects, many energy storage enterprises planning to join the ancillary services market are still waiting and watching the market from afar. At present, the most frequent approach to frequency regulation is through energy storage combined with thermal generators.  As individual regions build their own ancillary services markets, energy storage in the form of peak shifting and frequency regulation has a strong chance at commercialization.

Amongst energy storage in ancillary services projects, Beijing Ray Power has created a combined energy storage and thermal generator system which functions as a new frequency regulation source that not only resolves the slow adjustment time, delays, and potential for errors of traditional thermal generators, but also removes the difficulty of adding frequency regulation to the grid due to energy (KWh) limits on energy storage. One example is the Jinneng Group’s 9MW solar-thermal power plant in Shanxi that links energy storage with frequency regulation.  The system relies on a thermal generator coupled with a 9MW/4.5MWh energy storage system. The remodeled generator system has an improved AGC frequency regulation performance factor Kp of nearly 5.0.  The energy storage system’s round cycle efficiency is nearly 88%, while the power plant’s AGC frequency regulation compensation helps create profit, bringing great benefit to the company.

The transmission and transformation side of electricity is unlikely to see energy storage applications in China.  The size and relative staunchness of the Chinese power grid in comparison to those of other countries means that energy storage opportunities in China’s transmission and transformation will be unlikely for the next few years.

Power distribution, as many know, is one of the weaker components of China’s power system.  One example is Guangdong, where numerous areas of the province have suffered from low voltage problems in distribution and transformation, leading to significant customer complaints.  Such incidents brought energy storage into focus.  However, according to insider information, the cost for a new energy storage system would be at least twice as much as that for transformer and line upgrades.  Such costs are a difficult challenge for energy storage, but if over time the costs of energy storage batteries decreases, power distribution is certain to be a large market for energy storage.

Behind-the-meter energy storage made up the majority of 2017’s new energy storage capacity in China.  No matter if used for load shifting or demand management, the value of behind-the-meter storage has already been proven.  From the point of view of businesses, the most common profit point lies in energy arbitrage.  Yet relying completely on arbitrage is not enough to bring out the complete value of energy storage.  Even extremely low costs will not be enough to bring out the best regulatory functions of energy storage.

Narada Power’s smart energy storage power station at the Wuxi-Singapore Industrial park serves as a demonstration of energy storage capabilities.  The station is powered at 20MW, and total capacity of 160MWh.  The facility is currently the world’s largest commercialized energy storage power station in operation.  Each day, the facility can provide the industrial park with 20,000KVA of load adjustment during peak periods, lowering the burden on the industrial park’s substations and transformers and eliminating the need for transformer upgrades.

Second-Life Usages for EV Batteries are Another Driving Force for Energy Storage

In 2017, over 777,000 new energy vehicles were sold.  According to predictions, China will soon be facing a large wave of battery retirement.  China has already released a number of policies to stimulate the development of the battery retirement industry.  Recycling of retired batteries can be done in one of two ways, either through disassembly of the battery or through second-life applications.  Second-life applications have several advantages.  Currently, the cost of new battery production is high, a major factor limiting the widespread deployment of energy storage.  Second-life usages help lower the initial construction costs for energy storage systems, while at the same time being environmentally friendly and having a positive socioeconomic value.

In recent years, many domestic and international agencies have undertaken second-life applications research.  In China, there have been three main industry groups that have engaged in such research.  The first is electric vehicle manufacturers, such as BYD and BAIC BJEV.  The second group is energy storage customers, such as China Tower and grid companies.  The final group is third-party energy storage groups such as Shanghai GMDE.  Internationally, the main participants in second-life battery research are car manufacturers.

Second-life EV battery projects have already been successfully launched in China.  In February 2018, Shanghai NIO completed construction of two second-life energy storage power stations.  Beijing Pride Power complete a MWh-level second-life battery system, the first application of its kind in China.  The system uses retired vehicle battery packs (lithium-iron phosphate batteries), a bidirectional PCS, and connects to the end-user distribution network through a low-to-medium voltage distribution room.

Second-life applications can lower the investment costs of new projects and shorten the return period.  Although many companies have already become involved in second-life applications, there are still many areas that require exploration and improvement:

1.       Safety Considerations – early model batteries suffer from relatively low performance and were not designed with recycling in mind.  Designs also vary greatly in size and parameters, and it can be difficult to trace complete information on the batteries.  These and other concerns create large safety issues for second-life battery usages.

2.       Technological Considerations – second-life EV batteries must go through testing, disassembly, reassembly, and other stages.  Currently, the testing process suffers from a lack of advanced technology and standards.  Most testing is done by hand, and early stage batteries do not have a unified standard for testing, creating difficulties in the reassembly of batteries.

3.       Cost Considerations – EV battery disassembly, testing, and reassembly cost a great deal in resources and manpower.  Without developed technologies for such processes, many companies face added costs for second-life battery projects.

As EV battery retirement increases, and with the support of national policies, second-life batteries are destined to become a thriving market.

Increased policy support and continued research breakthroughs lowering the cost of energy storage are helping to develop the energy storage industry in a positive direction.  Whether in microgrids, ancillary services, spot markets, or any other field, the future of energy storage looks bright.

Ukrainian Parliamentary Delegation Visits Chinese Academy of Sciences to Discuss Energy Storage

On May 8th, 2018, the China Energy Storage Alliance and Chinese Academy of Sciences warmly welcomed a group of delegates from the parliament of Ukraine for a visit to the Chinese Academy of Sciences Institute of Engineering Thermophysics research base in Langfang, China.  The visit included a tour of the research base’s compressed air energy storage system, followed by presentations and a roundtable discussion.  The event was co-organized by the China National Complete Engineering Corporation and the China Energy Storage Alliance.  CNESA member organizations including vice chair member Shoto Group, Ray Power, Puneng Energy, ZTT, and Sungrow-Samsung were in attendance to meet and discuss with the delegation.

The Ukrainian delegation was led by Mr. Oleksandr Dombrovskyy, Vice Chairman of the Committee on Fuel and Energy Complex, Nuclear Policy and Nuclear Safety of the parliament of Ukraine.  Mr. Dombrovskyy was accompanied by four additional parliament members as well as a delegate from the Ukrainian embassy.  The purpose of the event was to help the Ukrainian government understand China’s energy storage industry and to introduce the Chinese energy storage products and technologies that are currently available. The meeting also helped the Chinese companies in attendance to understand the Ukrainian energy system and the market potential for energy storage in Ukraine.

The initial tour of the compressed air storage system was led by Dr. Zhang Xinjing, who introduced the system to the delegation and answered their questions regarding the technology.  The tour was followed by presentations and discussion.  China Energy Storage Alliance General Secretary Liu Wei delivered a presentation introducing the development of the global energy storage industry.  Dr. Tang Xisheng, General Manager of Shoto Group, introduced his company’s lead-carbon battery technology and its applications.  Guo Jintao, New Energy Products Sales Manager for ZTT’s International Division, delivered a presentation on his company’s Li-ion batteries and their applications.  The final presentation was delivered by Dr. Zhang Xinjing, who first provided an introduction to the Chinese Academy of Sciences Institute of Engineering Thermophysics before describing the development of compressed air energy storage research.  The meeting concluded with a Q&A session between the Chinese and Ukrainian guests.

This initial meeting served as a starting point for what is sure to be further cooperation and exchange in energy storage between Ukraine and China.  Both sides hope to continue to work closely to find ways in which China’s energy storage technologies and resources can contribute to the development of Ukraine’s energy system.

International Energy Storage Alliance Founding Ceremony Held at ESIE 2018

On April 2, the official founding ceremony for the International Energy Storage Alliance was held at the National Convention Center in Beijing.  The INESA is led by the Chinese Academy of Sciences Institute of Thermophysics and is supported by the Birmingham University Energy Storage Center, the China Energy Storage Alliance, and other international energy storage technology research bodies and industry groups.  The founding ceremony, co-sponsored by the Chinese Academy of Sciences Institute of Thermophysics and the China Energy Storage Alliance, received support from the Chinese Academy of Sciences International Cooperation Department, the Beijing Science and Technology Cooperation Center, and the China Energy Research Society.  Over 300 representatives from government, industry, and research institutions were in attendance for the ceremony.

China Energy Storage Alliance Chief Supervisor Zhang Jing Hosts the Foundation Ceremony

International Energy Storage Alliance Chairman Chen Haisheng Delivers Welcome Address

The INESA foundation ceremony was hosted by CNESA Chief Supervisor Zhang Jing. INESA Secretary General and Chinese Academy of Sciences Institute of Thermophysics Vice Director Chen Haisheng provided the initial welcome remarks, speaking on the alliance’s background, goals, and development plan.  The Chinese Academy of Sciences International Cooperation Department International Organizations Office Director Feng Kai delivered heartfelt congratulations to the INESA on its founding and praising the Chinese Academy of Sciences for its efforts.  Her speech also emphasized the Chinese Academy of Sciences' pledge to increase support for energy storage technology research and industry development, foster the growth of the INESA, contribute to the global spread of green energy, lessening of air pollution, and battling of climate change.

China Energy Research Society General Secretary  Zheng Yuping Delivers a Speech

Chinese Academy of Sciences International Cooperation Department International Organizations Office Director Feng Kai Delivers a Speech

China Energy Research Society General Secretary Zheng Yuping delivered a speech on the industrialization of energy storage technologies and research, highlighting the use of energy storage for reduction of emissions and adding renewable energy to the grid.  As China's energy think tank, the China Energy Research Society will continue to support the energy storage industry, and provide as many resources as possible to support the International Energy Storage Alliance.

Chinese Academy of Sciences Institute of Thermophysics Director Zhu Junqiang followed with a speech on behalf of the Institute of Thermophysics welcoming the experts and leaders in attendance and expressing gratitude to the new organizations and experts joining the alliance.  The speech emphasized cooperative activities between INESA members, including collaborative strategies for creating breakthrough technologies around the world, establishment of energy storage demonstration projects, and promoting continued energy storage and renewable energy growth globally.

INESA Representative Professor Ding Yulong of Birmingham University Delivers a Speech

INESA Representative Gary Yang, Founder and CEO of UET Technologies, Delivers an Address

The Official Founding of the International Energy Storage Alliance

Birmingham University Energy Storage Center Director Ding Yulong, UET Technologies Founder and CEO Gary Yang, and DNV GL Chief Consultant George Garbandic also delivered speeches congratulating the foundation of the INESA and expressing support for continued progress towards its goals.

Introducing CNESA’s “ES Research” Products and Services

Since 2011, the China Energy Storage Alliance’s research department has been focused on energy storage industry research and information consulting services.  After seven years of experience researching energy storage development and tracking industry trends, CNESA’s research department is proud to officially announce its “CNESA ES Research” brand, providing specialized energy storage research products and services.

ES Research includes four product and service types, including the Global Energy Storage Database, Energy Storage Industry Tracking, Special Reports on the Energy Storage Industry, and the Research Consulting Service.  Of these products, the Global Energy Storage Database and Energy Storage Industry Tracking are featured on the official ES Research website: www.esresearch.com.cn. Below is an introduction to each service:

The Global Energy Storage Database: the Global Energy Storage Database is divided into five separate categories: the Energy Storage Project Database, Energy Storage Policy Database, Energy Storage Manufacturer Database, Market Data Analysis, and Global Energy Storage Market Tracking. 

• The Energy Storage Project Database features a continuously updating collection of global energy storage projects, providing data on location, scale, technology type, application type, and other detailed information.  As of the end of 2017, over 1500 energy storage projects were collected in the database. 
• The Energy Storage Policy Database focuses on the development of the Chinese energy storage industry, collecting not only national and regional policies related to energy storage, but also tracking policies related to electricity reforms, renewable energy use, new energy vehicles, demand-side management and other related policies, as well as energy development plans related to the storage market environment or with potential storage opportunities.
• The Energy Storage Manufacturers Database collects global manufacturer information from all segments of the industry chain, including providers of key technologies--such as energy storage units, management systems, inverters, and systems integrators--as well as constructors, project developers, operations managers, battery recyclers, and other members of the energy storage applications chain. 
• The Market Data Analysis service is based on tracking of global energy storage capacity, providing continuous updates on the scale of markets in China and around the world, categorized by technology, application, country, and city/region, and providing a detailed statistical breakdown and analysis.

Using the data collected from the four services above, the CNESA research department also publishes the quarterly Global Energy Storage Market Tracking Report, providing a comprehensive analysis of the most recent market developments in China and around the world.

Energy Storage Industry Tracking: ES Research’s Energy Storage Industry Tracking follows energy storage industry developments in four categories: project, manufacturer, policy, and research.  The project category helps customers understand the most up-to-date distribution of projects and bidding plans.  The manufacturer category includes information on the most recent product releases, investments, strategic partnerships, production capacity, and other manufacturer activities.  The policy category analyzes domestic and international industry policies and electricity market rules.  The research category consists of predictions from notable research agencies regarding local markets, applications, capital, market developments, and more.

Special Reports on the Energy Storage Industry: CNESA has published its annual Energy Storage Industry White Paper since 2011.  The white paper provides a comprehensive yearly market analysis of the energy storage market characteristics and developments in China and key countries around the world.

Visit www.esresearch.com.cn to learn more about ES Research products and services.

Chinese Academy of Sciences Visited by U.S. Department of Energy Director of Energy Storage Dr. Imre Gyuk

On January 23, 2018, the Chinese Academy of Sciences hosted a meeting on energy storage with distinguished guests Dr. Imre Gyuk, director of energy storage research at the United States Department of Energy, and Dr. Gary Yang, CEO of UniEnergy Technologies.  Dr. Gyuk and Dr. Yang were met by China Energy Storage Alliance Chairman and the Chinese Academy of Sciences Institute of Engineering Thermophysics Deputy Director Chen Haisheng, China Energy Storage Alliance Deputy Chairman and Beijing Puneng General Manager Huang Mianyan, and CNESA Standing Council Representative and general manager of State Grid Electric Vehicle Service Company Wang Mingcai.

The meeting began with a presentation from Dr. Gyuk.  Dr. Gyuk introduced energy storage technologies, the economics of energy storage, and provided case studies of various energy storage projects across the United States.  Dr. Gyuk’s presentation highlighted the success of peakshaving and load shifting efforts in in California.  He also highlighted the use of energy storage for grid resiliency in areas such as Puerto Rico and Florida, where recent hurricanes have caused severe power shortages.  Dr. Gyuk noted the growth of energy storage projects, predicting a total of 2,045 MW total storage capacity in the United States by 2021.  After the presentation, Dr. Gyuk took questions from meeting members.

Following Dr. Gyuk’s presentation, CNESA chairman and Chinese Academy of Sciences Institute of Engineering Thermophysics Deputy Director Chen Haisheng presented on energy storage market status and development opportunities in China.  The presentation highlighted the decrease in energy storage technology costs, development of policies in support of energy storage, and highlighted project case studies across China.  Deputy Director Chen‘s presentation was followed by a brief discussion before the breaking of the meeting.

The meeting provided an opportunity for information exchange between the United States and China, with attendants learning more about recent energy storage developments and projects of each other’s countries.  The meeting also helped lay the groundwork for future international exchange, such as Sino-U.S. cooperative standardization efforts, project tracking, and more. 

Take Part in the 2nd Energy Storage Innovation Competition

The International Energy Storage Innovation Competition, hosted by the China Energy Storage Alliance, is now open for registration.  The competition, now in its second year, provides a platform for evaluating leading energy storage technologies and applications, highlights examples of innovative models for members of the industry, and honors those who have made outstanding contributions to the field.  The competition is open to companies and organizations from around the world who are involved in energy storage solutions and technologies.

1.      Competition timeline: Dec 25, 2017 to March 31, 2018.

Register between Dec 25, 2017 and Feb 28, 2018 to be considered.

2.      Organizing bodies:

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

Host: China Energy Research Society

Organizer: China Energy Storage Alliance

3.      Competition Structure: The competition is open to applicants worldwide and is divided into three awards categories, “Technology Innovation,” “Applications Innovation,” and
Person of the Year”

4.      Registration Method: click the links below to download the official registration forms.  Email completed forms and required materials (as requested on registration forms) to esic@cnesa.org.  You can learn more about the Innovation Competition and ESIE 2018 at the official ESIE website here: http://www.esexpo.org/?lang=en.

Registration Forms:

Applications Nomination Form

Technology Nominations Form

Narada to Deliver "Invest + Operate" Storage Partnerships

China-based lead battery provider, Narada Power, recently announced a cumulative 200 MWh of energy storage investment and operating agreements. In partnership with eight other companies, the energy storage systems target demand side management applications, peak shaving, power quality, and load stabilization applications.

Partner	System Size
Tiazhou Cultural Innovation Industrial Committee	48 MWh
Jiangsu Changfeng Paper Industry Co., Ltd.	40 MWh
Jiangsu Xitang Industries Co., Ltd.	36 MWh
Zhenjiang EcoChemcial Electroplating Technology Co., Ltd.	24 MWh
Suzhou National Environmental Protection New Technology Industrial Park Development Co., Ltd.	16 MWh
Southern Red Bean Holding Company	16 MWh
Wuyi City Yishun Machinery Manufacturing Co., Ltd.	12 MWh
Wuyi Changsheng Property Management Co., Ltd.	8 MWh
Total	200 MWh

The projects above are part of Narada’s “invest + operate” business model first launched in 2016. Similar to Green Charge Networks' business model, Narada provides all equipment and installation, and shares the earnings with host partner. At present, Narada has entered storage agreements totaling over 2.1 GWh (including the 200 MWh above), with 120 MWh already in operations. According to Chinese Battery Enterprise Alliance, Narada has already set aside CNY2 billion (US$300 million) in funds for battery projects. In the first half of 2017, Narada has already collected CNY133 million (US$20 million) in sales revenue, of which energy storage projects have accounted for CNY79 million (US$11 million) in sales.

The announced projects total CNY260 million (US$38 million) in investments from Narada, and upon completion expect to have a massive impact on future earnings.

Data: CNESA project database, CNESA White Paper 2017.

CNESA Alliance member Narada Power, a Hangzhou-based company founded in 1994, specializes in high-performance lead-based batteries for use in telecom, electric power systems, infrastructure, and renewable energy applications. According to data published in CNESA's 2017 White Paper, Narada currently ranks 6th in China’s top 10 storage providers in terms of kW of storage in operation (2016 data). While the top providers are dominated by Li-ion manufacturers, the Sacred Sun (no. 2) also specializes in lead based batteries. With improved battery technology and performance, lead batteries have maintained a cost advantage over Li-ion alternatives, and today represent 31% of China’s total installed electrochemical storage capacity.

Lishen Enters 21700 Li-ion Field With New 15 GWh Suzhou Production Facility

During a press release on July 20, 2017,  CNESA alliance member and Li-ion manufacturer, Suzhou Lishen, announced that operations have begun at a recently completed 353,000 sq. meter facility with a planned yearly production capacity of 15 GWh. Suzhou Lishen is a subsidiary of the Lishen group based in Tianjin, China.

The company’s East China production base is a central focus point in the company's “13th Five Year Plan” strategy, which includes plans increase production capacity for Li-ion batteries used in electric vehicles. The total project investments total over CNY5 billion (US$7.5 million) 

Suzhou Lishen invested CNY2.1 billion over the first two stages of the project, constructing a production capacity of 4 GWh. On April 15, 2016 construction began, with operations beginning on July, 20, 2017. It is China’s first domestic facility to manufacture the 21700 format Li-ion batteries.

Lishen’s 21700 format batteries have four main advantages when compared to the traditional 18650 batteries. The monomer energy density is higher, the battery system costs are lower, the total batter casing is lighter, and its overall easier to automate production. In addition to this, the Lishen 21700 have three core design features:

1. An entirely new physical composition battery cover that ensures consistent performance and minimizes the safety risks associated with voltage leaks
2. The battery casing uses nickel-steel pre-plating, putting an end to the need to produce metal powder, overall reducing battery self-discharge
3. Quadrapole structure allows for super high power discharge and high performance.

During the press release, Lishen unveiled the 21700 series products, suitable for a range of vehicles including hybrid electric vehicles, plug-in hybrid electric vehicles, and battery electricity vehicles. At the same time, the battery series products can satisfy the power requirements for 12V start-stop systems as well as 48V micromixing systems. Lishen has entered into agreements with 10 domestic suppliers for parts and components, with total purchasing plans exceeding CNY5 billion.

Draft Standards Released for Energy Storage with Wind/PV Plant Design

China’s Ministry of Housing and Urban-Rural Development (MOHURD) this weekend released a draft standards proposal for grid-connected wind and solar + storage plant design where storage is installed in conjunction with either wind, solar, or wind-solar hybrid plants. The proposed standards would apply to all new construction, expansions, and renovations to wind and solar generating assets rated at 10 MW and above designed with accompanying electrochemical storage equipment. The standards do not require all wind, solar, and wind-solar hybrid plants to include storage, but instead guide the design of facilities constructed with storage in mind.

The standards, based from the results of various optimization tests, make the following recommendations based on the principal application of the storage resources. 

1. Output smoothing mode: for storage assets used to correct for sharp fluctuations in wind and/or solar output. Installed storage should be no less than 10% of generation power with discharge capacity no less than 0.5 hours. 
2. Output tracking mode: for storage assets used to aid wind and/or solar plants meet the power dispatch commitments. Installed storage should be no less than 30% of generating power with discharge capacity no less than 1 hour. 
3. Frequency regulation mode: to regulate generation output frequency. Installed storage should be no less than 20% of power generation rating. No discharge time standard provided. 
4. Peak shaving/valley filling mode: further recommendations will be made based on grid needs. 

Comments for the proposed standards are requested to be submitted before July 28, 2017. It is not yet clear whether the proposed standards will be legally binding are provided instead as design guidelines.

Australia, meanwhile, after recently announcing plans for a 129 MWh Li-ion battery system as part of a wind farm in South Australia, is considering similar standards for renewable generation-sited energy storage. Minister for the Environment and Energy, Josh Frydenberg, recently proposed a “generator reliability obligation” suggesting  25% capacity and 4 hours of storage as guideline, conceding the exact figure would ultimately be up to the Australian energy market operator, AEMO.

China's NEA Calls for Energy Storage in Peak Services, DER

On February 10th, the NEA released its “Guiding Opinions on Energy Development for 2017” (2017年能源工作指导意见). In the context of broader targets laid out in the 13th Five Year Plan, the document represents a more detailed outline of development goals for 2017. In particular, the "Guiding Opinions" fleshes out the main tasks and goals for subordinate agencies to implement over the upcoming year, in line with the CPC’s strategic "energy revolution" initiative promoting a coordinated international cooperation advancing energy supply, systems, technology and consumption known as“Four Revolutions, One Cooperation" (四个革命、一个合作).

"Guiding Opinions" mentions energy storage several times as a key technology to develop in the upcoming year. In particular, the NEA identifies energy storage in the following sections:

"Strengthen and Reinforce Weaknesses in the Energy System"

The NEA calls for the need to increase peaking services and increase the grid system’s operating efficiency, through ameliorating power infrastructure bottlenecks and optimizing system-wide adjust-ability and flexibility.  To this end, the NEA promotes establishing an ancillary services market and compensation system along with accelerating the use of natural gas peaker plants. They also call for increased trials in fast-response coal power equipment, and promote continuing energy storage project demonstrations.

"Upgrade Energy Technology Equipment"

In this section the NEA identifies key technologies such as nuclear, renewable energy, shale gas, coalbed methane, gas turbines, and high temperature materials used in offshore oil and gas exploration. Additionally, they propose increase application of thermal solar storage uses and large-scale storage systems in conjunction with distributed energy systems.

The NEA also raises the need for establishing a strong standards body to guide the emerging “Internet+” Smart Energy field, electric vehicle charging, solar power generation, and energy storage industries.

"Social Welfare"

As part of energy substitution methods to decrease pollution and quality of life, the NEA mentions the need for improvements in peak and off-peak electricity pricing mechanisms in conjunction with encouraging adoption of energy storage and heat storage.

"Specific Engineering Tasks"

While this section consists of numerical targets implementing gas peaker plants, pumped hydro stations, and inter-province transmission and distribution tasks, the NEA is more cautious with energy storage, where instead of setting a numerical capacity mandate, rather lists off several key projects under construction with plans to finish within the year.

The 2017 "Guiding Opinions" in contrast with the the 2016 edition does not mention specific battery chemistries but sets more specific goals including the call for a standards body, and a more clearly defined potential and need for energy storage in peaking services and distributed energy resources. The 2016 edition called for developments in large-scale energy storage, in particular for all vanadium redox flow batteries, but was less clear regarding the role energy storage can play in the grid. Compared to 2016, the 2017 "Guiding Opinions" does show some evolution of the NEA's thinking regarding the technology. This year, a "Guiding Opinions" focused specifically on Energy Storage development is also expected. 

CNESA Co-hosts Forum on Storage Pricing

December 10, 2016 - CNESA, in collaboration with the Beijing Energy Club alongside the Asia Development Bank, hosted the international forum: “Energy Storage Pricing: Method and Mechanisms.” Hearing from both Chinese and international experts in power and storage markets, the forum served to illuminate storage investment and accompanying policies as well as viable business models in some of the world's principal markets. Speakers also discussed applications in the Chinese market with potential storage pricing policies and mechanisms under China’s power system marketization reforms.

Morning sessions were devoted to international perspectives on storage pricing mechanisms. Janice Lin of Strategen Consulting introduced the American market and various pricing and government-backed incentive schemes underway across the nation. Heiko Staubitz, of Germany Trade and Invest, introduced the German renewables market and major economic drivers behind storage profitability. Goran Strbac from Imperial College London, presented his research on power systems markets and Naoki Sakai with the Asian Development Bank introduced storage pricing in Japan.

The afternoon session was headed by Chinese speakers including CNESA Secretary General Tina Zhang, delivering her thoughts on energy storage and China’s 13th Five Year Plan, along with the National Development and Reform Commission head of the Pricing Institute Liu Shujie spoke on an energy storage demonstration project in Dalian, Liaoning Province along with preliminary insights into setting Energy storage pricing mechanisms. Over 160 industry representatives, government officials, and researchers were in attendance.

Sunday, following the forum, members of organizing committee visited CNESA Alliance member, Rongke Power's energy storage R&D and production center.  Rongke's storage division, founded in 2008, is one of the world's leading vanadium flow battery solutions providers. Rongke Power serves as a core member of the Chinese Academy of Sciences Dalian Physical Chemistry Research Institute. Beginning research into vanadium flow battery technology in 2000, the company has grown with over 30 technology projects located across China, Europe and the United States today. 

Li Keqiang Calls for Breakthroughs in Storage Technology

Chinese Premier, Li Keqiang, who also serves as Chairman of the National Energy Committee, recently emphasized the central role of transforming energy production and consumption in sustainable development at an NEC meeting on November 17, 2016. Premier Li highlighted the need for breakthroughs in energy storage technology to effectively exploit China’s rapidly growing renewable energy capacity.

The National Development and Reform Commission (NDRC), National Energy Administration (NEA), National Energy Committee members, and other experts shared reports on their research. Premier Li, who presided over the meeting expressed the following, giving a view into the policy direction and priorities of the Communist Party. Li expressed that energy strategy is the pillar behind national development. At present, considering rapid changes in energy technology and changes to the global composition of energy supply and demand, China, as one of the world’s major energy exporters and consumers must capture the new opportunities. Li indicated that the Party will work to implement practical development plans, with supply-side reforms as the central theme. In all, the government aims to increase China’s competitiveness in the global energy industry, constructing clean, low-carbon, safe, and efficient energy systems, to support China’s continued stable and sustainable economic development.

Sustainable energy development, Premier Li continued, relies on technology innovation and system reforms. He called for concentrated efforts to develop and exploit renewable energy resources, especially by way of grid integration, storage technologies, and breakthroughs in microgrid research. Through the Internet of Things construction of the “Internet+” and smart energy, China will upgrade the grid system adjust-ability, increase consumption of alternative energy sources, and develop highly advanced and efficient technology. Li expressed the need to actively encourage entrepreneurship, innovation, and the founding of new energy technology companies. While intensifying reforms in energy-related State Owned Enterprises, Li also signaled support of privately run enterprises entering the energy sphere. Such support can be achieved through marketization reforms, simplifying the regulatory processes, and transferring more rights to local governments, along with reforms in oil & gas drilling rights and reorganization of power transmission and distribution systems. Ultimately, the government aims to improve and encourage the development of distributed energy resources related mechanisms and policies, display the impact of market resource allocation, and the role government can play, all to establish a fair and competitive energy market.

To ensure energy security, Premier Li points out that China must take domestic and international concerns into mind, though based domestically, China must also look abroad for international cooperation. Especially in line with the Party’s “One Belt One Road” policy agenda, China seeks to increase international cooperation in production capacity, stregthening national competitiveness in energy equipment exports.

This article has been translated from the original Chinese, available here.

Power Sector Reforms Announced in China’s 13th Five Year Plan

Nov. 7, 2016 China’s National Development & Reform Commission along with the National Energy Administration (NDRC and NEA) jointly released the “13th Five Year Plan for Power Sector Development” marking 15 years since the last time a Five Year Plan was released on the development of China’s power sector. The last Five Year Plan for the power sector was released January 1, of 2001, as part of the “10th Five Year Plan.”

The NDRC estimates by 2020, Chinese electric power consumption will reach 6,800 TWh of electricity, increasing on average by 3.6-4.8% each year. The per capita use is expected to reach approximately 5,000 kWh by 2020. (According to World Bank data from 2014, this is on par with the current per capita rates from nations like Greece, Spain, and the United Kingdom.) With China’s growing needs for power and a 15% renewables target in mind, the plan calls for the following goals to be met over the next five years. 

Hydropower

Add 40 GW hydropower capacity, with total installation reaching 340 GW by 2020.

Wind Power

Increase wind capacity by 79 GW, with total installed capacity of 210 GW by 2020, of which 5 GW will include offshore wind projects.

Solar

Add 68 GW of solar bringing total solar capacity to 110 GW by 2020, of which distributed solar will be 60 GW and thermal solar will be at 5 GW. 

Nuclear

Put 30 GW nuclear power into operation, reaching total capacity of 58 GW by 2020. Due to safety concerns, priority given to construction in coastal regions.

Biofuels

Reach 15 GW of biofuels production by 2020.

Natural Gas

Increase natural gas capacity by 50 GW, by 2020 total capacity will be over 110 GW, with CCHP-coupled technology occupying 15GW.

Coal

Cancel/delay construction of coal plants over 150 GW in scale, capping coal generation capacity at 1,100 GW by 2020. Upgrade 420 GW of existing equipment with low-emissions technology, modify 340 GW of equipment to increase energy efficiency, and phasing out over 20 GW of old equipment. By 2020 all coal plants must waste less than 310g/kWh of coal.  

System Upgrades

• Promote a flexible electric system by increasing load shifting capabilities. Put into production 17 GW of pumped storage, bringing total pumped storage up to 40 GW.
• In China's North, update 133 GW of capacity with thermoelectric technology and modify 82 GW of equipment with condensing units. Other locations will receive condensing unit upgrades totaling 4500 GW in capacity. After upgrades, the focus will be on increasing load-shifting capabilities by 46 GW, 45 GW in China's North. 
• Increase transmission capacity by 130 GW to send power from west to east, bringing long-distance transmission capacity to 270 GW by 2020. 
• Accelerate construction of electric vehicle charging stations, bringing total centralized charging stations over 12,000, and distributed charging stations over 4,800,000. Strengthen smart charging systems to satisfy the needs of China's expected 5,000,000 electric vehicles. 

System Reforms

• Before the end of 2016, complete a electric power market mechanism. After which, power market trials will begin. 
• Before the end of 2017, set electricity transmission and distribution prices. 
• Ancillary services pilot for China's Northeast began in 2016, once the pilot has matured, an ancillary services market will be implemented nation-wide.
• Before the end of 2018, establish spot market pilots, with nation-wide implementation by 2020.
• Before 2020 cancel preferential rights for electricity generators. 
• By the end of 2018, complete work to cultivate sell-side market competition mechanisms, encourage the launching of new electricity distribution services. 

While the specifics of implementation are left to subordinate government agencies, the power development reform document certainly gives a glimpse at how China's power sector will shape up in the upcoming five years. The renewables targets for solar and wind are considered disappointingly conservative by some advocacy groups, and create uncertainty about China's previously explosive growth in wind and solar power will continue to expand. Despite this, however, the announcement of power sector reforms establishing electric power market mechanisms, spot markets, and ancillary services markets still creates enormous potential for energy storage participation, as CNESA Secretary General, Tina Zhang, explains here and here.

The original document is available in Chinese.