According to statistics from the CNESA global energy storage project database, by the end of 2019, accumulated operational electrical energy storage project capacity (including physical energy storage, electrochemical energy storage, and molten salt thermal storage) in China totaled 32.3 GW. Of this total, new operational capacity exceeded 1 GW. New operational electrochemical energy storage capacity totaled 519.6 MW/855.0 MWh (note: final data to be released in the CNESA 2020 Energy Storage Industry White Paper). In 2019, overall growth in the development of electrical energy storage projects slowed, as the industry entered a period of rational adjustment. As we enter 2020, how do those in the industry view and understand the future development path for energy storage? To answer this question, CNESA surveyed energy storage experts and industry leaders to provide readers with an understanding of the current state of energy storage in China, and where the industry is headed in the future.
Chen Haisheng, Chairman of the China Energy Storage Alliance:
When judging the progress of an industry, we must take a rational view that considers the overall situation, development, and long-term perspective. In regard to the overall situation, the development of energy storage in China is still proceeding at a fast pace. Although the capacity of energy storage installed in China decreased in 2019, we continue to see steady growth. The installation of electrochemical energy storage in China saw a steep increase in 2018, with an annual growth rate of 464.4% for new capacity, an amount of growth that is rare to see. Subsequently, the lowering of electrochemical energy storage growth in China in 2019 compared to 2018 should be viewed rationally.
From the perspective of development, the sustained driving power for rapid development within the energy storage industry has not changed. First, the development needs of the energy revolution, especially the huge demand for energy storage caused by the large-scale growth of renewable and distributed energy have not changed. Second, the early accumulation of energy storage technology and industry already has established a tenacious vitality and basis for rapid development which has not changed. Third, the direction of reforms of the national power system and power markets have not changed, and the benefits brought by these policies have continued to increase. Positive factors in the development of the current energy storage industry still dominate.
From the long-term perspective, we should maintain strategic focus, retain a rational view of the development process of the energy storage industry, and ensure correct judgment. The development of any industry is a process, one in which there will be several ups and downs, all of which are normal. In many ways, the necessary adjustment of an industry once it has reached a certain stage is more conducive to the long-term development of the industry than if no such adjustment were to occur.
A message to energy storage colleagues: sometimes, to slow one’s pace is to allow one’s steps to move steadier and travel farther.
Xia Qing, Professor of Electrical Engineering, Tsinghua University:
The takeoff of grid-side energy storage in 2018 injected new vitality into the whole market, not only bringing new points of growth, but also driving a reduction of costs for energy storage technologies and guiding technologies towards a direction more suited to the power system. However, in 2019, the development of grid-side energy storage began to suffer due to policy restraints.
Whether energy storage can be used as a grid asset depends on multiple factors: is the market for grid-side energy storage an open one? Can fair prices be formed through a market mechanism? Can a mechanism be formed which promotes rational investment in the grid? I believe that a mechanism which solves these problems is not far away! However, the proper index for new investment in energy storage at the grid side is the cost of power supply per unit. Only when the relative history of this index does not increase will it be proven that investment in grid-side energy storage really holds value and can effectively reduce the cost of transmission and distribution. Such are the basic conditions for energy storage to be included in the cost of transmission and distribution of electricity.
Energy storage is of vital importance to the energy transition. The opening of the power market can help elevate energy storage to become a natural core part of the power market. At the same time, it can also reflect the functional value of energy storage as a flexible resource. A market in which the beneficiary is the one to pay the cost for services is also key to promoting the commercialization of energy storage.
A message to energy storage colleagues: only those companies who fight during these tough times, make efforts to innovate, and lower their costs can achieve success in the energy storage industry of the future!
Lai Xiaokang, Chief Expert, Institute of Electrical Engineering, China Electric Power Research Institute:
The energy storage industry has experienced many ups and downs over the past decade. The problems the industry has faced have changed as it has moved through different stages of development. One of the first challenges was that of energy storage technology itself: whether storage technology functions could be realized in the power system. Application conditions had to be verified through development of energy storage demonstration projects. Focus later turned to the high costs of energy storage, the progress still needed to develop large-scale applications, the immaturity of the upstream and downstream value chain, and other issues. What we are facing at the current stage is a deeper problem, that is, how the multiple values of energy storage can be brought to the power system, how they can be quantified, and how business models can be designed. For example, how can we calculate the value of energy storage as a substitutive technology for reducing investments needed for electricity transmission and distribution? Such a question is a challenging emerging research direction.
Facing changes at the generation side, the power system needs flexible resources. The question of which technologies should be combined with which kind of power supply, especially for long duration energy storage demands, needs to be carefully considered, researched, and relevant solutions put into practice. We hope energy storage practitioners will lay a solid foundation in basic research, key technologies, equipment manufacturing, raw materials, and operation and maintenance.
The energy storage industry is not one which can make fast money. Regardless of the type of market players considering long-term strategic involvement in energy storage, small steps are the right way to develop. In the future, as a greater proportion of renewable energy enters the grid, there will be a rigid demand for energy storage technology. As long as there is demand, the industry is bound to move forward healthily, continuously, and steadily. We should be willing to face the difficulties in the process of industry development, and solve these challenges through mechanism innovation, business model exploration, and the development of energy storage technologies which are suited to practical applications.
A message to energy storage colleagues: remember to look for the rainbow after the storm.
Li Hong, Researcher, Institute of Physics, Chinese Academy of Sciences:
In 2019, China's physical energy storage technology made important breakthroughs. The world’s first 10 MW advanced compressed air energy storage project passed acceptance by the Ministry of Science and Technology, and the world’s first 100 MW advanced compressed air energy storage project officially began construction in Zhangjiakou. Thermal storage technology also blossomed, with sensible heat storage technology seeing wide use, and phase change technology gradually becoming a research hot spot. Achievements in flywheel technologies saw a 2 MW flywheel energy storage used in the implementation of a rail transit project demonstration. A domestic 250 kW high-speed flywheel was applied in a UPS demonstration, and breakthroughs were made in key technologies for a single 400 kW high-speed motor.
In 2020, chemical energy storage technology needs to further improve lifespan, efficiency, and safety. New progress is expected in high-safety lithium ion batteries, solid-state lithium ion batteries, and a new generation of liquid flow battery technologies. Physical energy storage technologies need further improvements in scale, efficiency, and popularization, and substantial progress is expected in 100 MW advanced compressed air energy storage, high density composite heat storage, and 400 kW high speed flywheel energy storage key technologies. Both physical and chemical energy storage need to further reduce costs to promote the commercialization of energy storage. The cost of mainstream energy storage technology has decreased by 10-20% per year over the last 10 years. This trend will continue in 2020, but the cost of energy storage technology cannot be infinitely reduced, and it is expected that costs will become stable after energy storage reaches a certain scale. More importantly, only by mastering original technologies with independent intellectual property rights can China's energy storage technology have core competitiveness and can China's energy storage industry development be said to have a solid foundation.
A message to energy storage colleagues: we must continue to work hard and forge ahead!
Tan Libin, CATL:
In 2019, the energy storage market saw frequent ups and downs. Events in South Korean have prompted prudence over the safety and reliability of energy storage products. The development of the front-of-meter energy storage market in the United States has allowed people to see the value of energy storage while pursuing large-scale clean energy. In Japan, the growth of the household energy storage market has signified consumers’ increasing awareness of disaster recovery and their desire for reliable electricity security.
In 2019, CATL made breakthroughs in lithium compensation mass production technology and applied it to lithium iron phosphate batteries, achieving a unit cycle of 5400 times, capacity retention rate >92%, and a battery system energy conversion efficiency of 93%. This new technology was applied to the Fujian Mintou 108 MWh energy storage project. At the same time, CATL also explored new technological and commercial solutions in many energy storage applications such as renewable energy plus energy storage, peak shaving, industrial and commercial behind-the-meter energy storage, island microgrids, and more.
In 2020, the role of energy storage in the electricity market will continue to grow – energy storage will break through its limitations to developed countries and certain regions, and will contribute to the evolution of energy structures in developing countries and drive industrial development. The fundamental reasons for the development of the energy storage market are public demand for clean energy and their demand for improvement of environmental problems, the willingness of people to pursue cheap energy, the ability of the power system to connect large-scale renewable energy to the grid, and the “intelligentization” of electric power dispatch. The advancement of technology is not the fundamental factor in the emergence of the new market, but it can greatly promote the development and maturity of the emerging market.
A message to energy storage colleagues: in 2019, we learned and adapted. In 2020, let’s use our knowledge to make the energy storage market solid and robust.
Gu Yilei, Sungrow:
2018 can be said to be “year one” of energy storage in China, with the market showing signs of tremendous growth. 2019 was a somewhat confusing year for the energy storage industry, but Sungrow’s energy storage business has relied on long-term cultivation and market advancement overseas, and its number of global systems integration projects has exceeded 900. Sungrow has also launched many domestic large-scale benchmark projects in grid-side, generation-side, behind-the-meter, and other applications.
As early as 2010, Sungrow has raised its energy storage business to a strategic level as one of the company’s priorities for future development. In the past decade, although China's energy storage industry has been slow to usher in its “spring season,” Sungrow has remained engaged and enthusiastic in energy storage, and has continued to invest in technology research and development each year. The development of energy storage and the development of solar PV are in many ways analogous, but there are also many differences between the two, with the development of solar PV occurring gradually, whereas energy storage must go through a long period of accumulation before costs may become low enough for the industry to take off.
Overseas energy storage markets such as Europe, the United States, and Australia have developed in a healthy way. Compared with foreign markets, China's energy storage industry has seen neither subsidized support nor a market-oriented electricity price mechanism since its inception. We hope that China can borrow more from the advanced policy and market designs of other countries, thereby allowing energy storage enterprises in China freedom to do well what they are good at, innovate continuously, strive to reduce costs in each link of the value chain, improve safety and reliability, and make technologies which stand the test of application.
A message to energy storage colleagues: only through continued internal practice and making sufficient preparations in technology, products, markets, and customers can we have the ability to embrace the “spring” of energy storage.
Chen Shengjun, CRRC New Energy Technology:
2019 was a year of rapid development for the application of energy storage technology in the field of transportation. In the automotive field, we saw impressive expansion of NMG battery EVs, LiFePO battery EVs, PHEV models, and 48V hybrid models. Fuel cell passenger cars also provide much to look forward to. Subsidy policies have led to great developments in electric vehicles, and have also promoted the development of battery technologies, improving performance and safety, decreasing costs, and have also led to the electrification of ships. 2019 saw batch operations of renewable-energy-powered passenger and freight transport in the inland rivers and lakes of China, among which the largest renewable energy bulk carrier provided by EVE Energy can reach 5000 tons.
In the field of rail transit, supercapacitors, hybrid capacitors, and lithium titanate batteries have been used in tram and train drive power supplies. CRRC developed hybrid technology equipped with supercapacitors and lithium titanate batteries has brought a leap forward for internal combustion engine development. CRRC established a fuel cell industrialization base in Jiangsu in the last quarter of 2019, and also announced that traditional locomotives would move towards renewable energy sources. At the same time, supercapacitor brake energy recovery systems at the station level have also begun to be applied at a large scale in China.
The development of energy storage technologies in the field of transportation demonstrates the trend toward application diversity, power and energy balance, long life, high safety, and low cost.
A message to energy storage colleagues: in 2020, with the further development of market-oriented applications, the single policy-driven market is developing towards a benign one. We have reason to believe that in the field of transportation, energy storage technology will have a bright future.
Shicheng Wang, Soaring Electric:
In 2019, Soaring Electric’s energy storage business made new achievements in its ten years of practice. Total new energy storage project capacity surpassed 100 MW, the new generation of three-level 630 kW PCS once again became the most efficient and rapid energy storage converter in the industry, and the large-capacity mobile energy storage vehicle was officially launched and put into use as an important power supply facility for the parade celebrating the 70th anniversary establishment of the Navy. Even during the industry’s adjustment period, Soaring Electric has made significant progress and gains in business expansion and technological innovations.
The value of energy storage for power systems and the energy revolution is beyond question. We believe that the government can view the huge technological and commercial value of energy storage from the strategic perspective of the energy revolution, and promote the healthy and positive development of the industry. The government can provide positive industrial policy support and guidance, consolidate the industry’s advantages, and create a business cluster effect, allowing China to become a global leader in this major future market.
In this new year, Soaring will strengthen its potential, develop its internal practice, and continue to promote the improvement of enterprises in products and services, working together with industry colleagues to promote the healthy and positive development of the energy storage industry.
A message to energy storage colleagues: the energy storage trend is irreversible. We are Soaring. In the new year, may Soaring and our colleagues in energy storage work hard to create a better energy storage future.
Wu Xianzhang, Narada Power:
Narada Power is one of the first enterprises in China to expand the C&I applications of energy storage, which is the leading application in installed capacity size and the number of projects.
At the beginning of 2019, Narada actively responded to market changes, strategically adapted its energy storage business sector, and shifted from an investment and operations model to power station sales, BOT model, and systems integration. Through the upgrading of equipment technology and enrichment of the product line structure, Narada actively expanded into new applications, new models, and new areas. By the end of 2019, energy storage projects with a cumulative size of more than 200MW had been put into operation in applications such as peak shaving and frequency regulation, renewable energy integration, generation-side thermal storage combined frequency regulation, and overseas energy storage markets.
However, due to the external economic environment and the instability of the company's own operating conditions, insufficient consumption, and a single user-side energy storage profit model, the commercialization of behind-the-meter energy storage has become passive. Following the global trend of energy restructuring, Narada Power recommends the following:
In the portions of the 14th Five-Year Plan related to renewable energy and electricity, energy storage should be included in the top-level design of the energy plan, and the technical route, standards system, operations management, and price mechanism of energy storage should be clarified in order to promote the large-scale application of energy storage in the energy industry.
Speed up the construction of the power market, give energy storage power stations independent identities, and establish an energy storage price formation mechanism within the electric power spot market.
Actively carry out pilot experiments on energy storage innovation and application policies, and remove policy barriers such as equipment access, subject identity, data interaction, and transaction mechanisms.
Research and formulate relevant policies and regulations on finance, taxation, insurance, etc. that are suitable for the development of new energy storage models.
With the accelerated growth and development of the energy storage market, in 2020, Narada Power will continue the strategic planning of its energy storage business. In terms of technology, it will lead through a dual engine of lead-carbon/lithium battery technology, increase research and development reserves, and upgrade its energy storage equipment manufacturing. Narada plans to create a safe, efficient, and stable core product competitiveness, develop industrial-scale applications, and transform into an industry unicorn!
A message to energy storage colleagues: remember that success comes to those who strive through tough times. We hope that the energy storage industry will continue to become better and better!
Cao Hongbin, ZTT:
In 2019, ZTT continued to power the energy storage market, participating in the construction of the Changsha Furong 52 MWh energy storage station, Pinggao Group 52.4 MWh energy storage station, and other projects, as well as providing a comprehensive series of energy storage applications such as energy storage for AGC, primary frequency regulation, AVC, “source-grid-load,” and other functions. ZTT raised 1.577 billion RMB in 2019 to invest in 950 MWh of distributed energy storage power station projects and launched a safe and intelligent behind-the-meter energy storage system. Whether behind-the-meter energy storage can become popularized in large-scale applications is an important indicator for real energy storage growth. Currently, commercialization is still the most difficult problem for the development of behind-the-meter energy storage. ZTT’s efforts hope to accelerate the commercialization of behind-the-meter storage.
Participation in the whole value chain is one of the three core values of ZTT. This participation brings advantages such as supply speed, equipment compatibility, quality control, and price. ZTT has been involved in the complete value chain of energy storage, including core components such as battery positive and negative electrode materials, copper foil, structural parts, lithium batteries, PCS, EMS, energy storage containers, and other components. ZTT will focus on technology innovation and other means to achieve substantial reduction in energy storage costs, improve investment yields, and boost the commercialization of behind-the-meter energy storage. At the same time, ZTT plans to bring large energy storage systems and small household energy storage systems to overseas energy storage markets.
A message to energy storage colleagues: "Energy storage+solar " is the ultimate energy solution of the future, and also the most affordable energy source of the future. We sincerely hope that our fellow colleagues who love energy storage will invest their enthusiasm and dedication to the cause of breaking down technical barriers and creating innovative business models for energy storage in China!