Construction Begins on China's First Independent Flywheel + Lithium Battery Hybrid Energy Storage Power Station

Recently, the groundbreaking ceremony for the new 200MW/100.83MWh independent hybrid energy storage project was held in the Sangcun Industrial Park, Wenshui Economic Development Zone, Wenshui County, Shanxi Province. The ceremony was attended by Meng Lansheng, Deputy Secretary of the County Party Committee and County Mayor, Wu Yingzhe, a member of the county government party group and director of the Economic Development Zone Management Committee, along with more than a hundred representatives from relevant units.

The Wenshui Energy Storage Power Station project covers approximately 3.75 hectares within the red line area. The station is divided into four main functional zones: office and living service facilities, power distribution and step-up station, lithium iron phosphate energy storage area, and flywheel energy storage area. This project, as an independent frequency regulation power station, combines flywheel energy storage technology with lithium iron phosphate batteries, with a capacity of 200MW. Upon completion, it is expected to become the first independent flywheel + lithium battery hybrid energy storage power station in China, capable of meeting both frequency regulation and peak shaving demands, thus contributing to the safe and stable operation of the power grid. The project is anticipated to generate an annual income of approximately 240 million yuan and tax revenue of 36 million yuan.

China's First Vanadium Battery Industry-Specific Policy Issued

On May 8th, the Sichuan Provincial Department of Economy and Information Technology and six other departments jointly issued the "Implementation Plan for Promoting High-Quality Development of the Vanadium Battery Storage Industry" (hereinafter referred to as the "Implementation Plan"). This policy is also the first vanadium battery industry-specific policy in the country. Qing Jiasheng, Director of the Material Industry Division of the Sichuan Provincial Department of Economy and Information Technology, introduced that by 2025, the penetration rate of vanadium batteries in the storage field is expected to reach 15% to 20%, taking a leading position in the field of large-scale, long-duration storage. The "Implementation Plan" aims to build a leading national vanadium battery storage industry base through initiatives such as conducting application pilot demonstrations, strengthening technological self-innovation, expanding the production and supply of vanadium products, promoting industry cost reduction and efficiency enhancement, accelerating the creation of industrial clusters, and cultivating improved standards and brands. Sichuan has a solid foundation for the development of the vanadium battery storage industry, holding the country's largest vanadium resource reserves and leading in the production of vanadium pentoxide, having built the world's largest and most comprehensive vanadium product production base. Additionally, Sichuan's abundant hydropower resources and gradually increasing photovoltaic power generation share provide a substantial market space for vanadium battery storage stations as important energy reserves. To further promote new industrialization, accelerate the construction of a modern industrial system, plan for future new products, cultivate new quality productive forces, and build a leading domestic vanadium battery industry base, it is necessary to introduce measures to promote the high-quality development of the vanadium battery storage industry.

Development targets include:

- Vanadium battery storage industry's technology level and innovation capacity to be among the national leaders;

- Vanadium electrolyte production capacity to reach 200,000 cubic meters/year, electrode material production capacity to reach 6.5 million square meters/year, stack production capacity to reach 3GW/year, and system integration capacity to break through 12GWh/year;

- Cultivate at least three innovative and nationally competitive leading companies;

- Build a number of economically effective pilot demonstration projects with strong driving capabilities.

Pilot demonstration proposals include:

- Support the promotion and application of vanadium batteries in various aspects such as photovoltaic, wind power generation storage, grid peak shaving and frequency modulation, and communication base station storage.

- Support areas with solid vanadium industry foundations such as the relevant load centers within the province and cities like Panzhihua, Neijiang, and Leshan, to construct a number of vanadium battery storage stations based on actual demand.

- Actively explore innovations in technology, business models, and institutional mechanisms to promote the market-oriented, large-scale application of vanadium battery storage.

Policy support proposals include:

- Increase fiscal funding support for major projects, innovation platforms, and characteristic parks in the vanadium battery storage industry.

- Strengthen the guarantee of essential resources such as land and energy use, and actively promote the construction of major pilot demonstration projects.

- Support grid integration and utilization of vanadium battery storage stations, optimize time-of-use electricity pricing policies such as peak and off-peak tariffs, and seasonal tariffs in a timely manner to increase revenue channels for vanadium battery storage.

- Improve incentive mechanisms, support new energy projects to deploy vanadium battery storage as needed, and implement related incentive policies from the "Action Plan for Quality Improvement and Doubling of Advanced Materials Industry".

- Explore establishing a vanadium resource price stabilization negotiation mechanism, construct a "vanadium electrolyte bank," a bulk vanadium asset trading platform, and a national vanadium asset trading system centered in Sichuan.

Market mechanism proposals include:

- Support vanadium battery storage to participate as independent market entities in medium and long-term transactions, spot and ancillary services in the electricity market.

- During charging in the electricity quantity market, it can enjoy time-of-use tariffs as an electricity market consumer, with the corresponding electricity purchased on its behalf by electricity sales companies or grid enterprises;

- During discharging, participate in the thermal power market transactions, with prices formed by the market.

- Accelerate the construction of an electricity ancillary services market, enrich the varieties of vanadium battery storage participating in the electricity ancillary services market, and fully reflect the flexible adjustment value of vanadium battery storage.

- Support joint investment by new energy development enterprises and vanadium battery storage enterprises, encourage new energy stations to configure vanadium battery storage through self-construction, leasing, or purchasing, and reasonably distribute profits through market mechanisms.

Major Breakthrough: Successful Completion of Integration Test on World First 300MW Advanced Compressed Air Energy Storage System Expander

Recently, a major breakthrough has been made in the field of research and development of the Compressed Air Energy Storage (CAES) system in China, which is the completion of integration test on the world-first 300MW expander of advanced CAES system marking the smooth transition from development to production. This pioneering achievement is independently developed by the Institute of Engineering Thermophysics of Chinese Academy of Sciences (IET) and Zhong-Chu-Guo-Neng Co. Ltd.

　　Energy storage technology serves as the key supporting technology for the ongoing energy revolution, while the relevant industry gradually evolves into a pivotal pillar within the spectrum of national strategic emerging industries. In this context, CAES has distinct merits of large-scale, cost-effectiveness, high efficiency and eco-friendliness etc., which is one of the most promising large-scale energy storage solutions. As for the core component of CAES system, the development of expanders emerges with such intricate technical challenges as substantial loads, copious flow rates, intricate flow and heat transfer as well as the demanding wide- operating-gamut with uncompromising efficiency. After years of unremitting efforts, the R&D team of IET has successively resolved key technical problems in breakthrough technologies including intricate 3D design implementation, sophisticated shaft architectures, and dynamic adjustment and control mechanism etc., and developed world-first multi-stage high-load 300MW expander of advanced CAES system endowed with completely independent intellectual property rights. (See Figure 1)

On August 1st, 2023, IET and Zhong-Chu-Guo-Neng Co. Ltd accomplished a significant feat, that is, the successful integration test of a 300MW compressed air expander. Notably, all results of various tests not only met but exceeded the design indexes, highlighting attributes such as exceptional integration, high efficiency, rapid start-stop capabilities, extended operational lifespan and simplified maintenance. The successful development of the 300MW compressed air expander stands as a significant milestone in domestic compressed air energy storage domain. Not only does it mark a turning point for advanced compressed air energy technology, but it also propels the nation's capabilities to unprecedented height. This accomplishment underscores China's commitment to innovative energy solutions and signifies a crucial step forward in the evolution of advanced compressed air energy storage technology.

　　As the earliest domestic institution in the research on compressed air energy storage, IET has already set up a research and development system with complete independent intellectual property rights through 19 years of efforts. IET successively achieved breakthroughs in critical domains such as comprehensive system design and control across all operational conditions, multi-stage high-load compressors and expanders, and highly efficient supercritical heat storage and transfer etc. These accomplishments bore fruit in establishing the world-first advanced CAES systems, such as the 1.5MW model in 2013, 10MW model in 2016 as well as the groundbreaking 100MW model in 2021. Incorporating the pioneering CAES technology of the IET, Zhong-Chu-Guo-Neng Co. Ltd has the full set of capacities in research and development, design, manufacture, project implementation, investment and operational management of 100 MW level CAES systems. This multifaceted prowess positions the company as a prominent trailblazer and global frontrunner in the realm of advanced CAES systems. Since the advent of their partnership in 2018, both sides have taken the lead in the development of the world-first 300MW advanced CAES system.

　　The scale-enlargement of CAES systems constitutes an important way to reduce cost, improve efficiency and enhance market competitiveness. Compared with the 100MW advanced CAES system, the forthcoming 300MW system will achieve a threefold amplification in scale, notable 20%-30% reduction in unit cost and a marked 3-5% enhancement in overall efficiency. The successful completion of integration test and subsequent deployment of the 300MW advanced CAES system expander marks the significant progress in the national demonstration project of world-first 300MW advanced CAES system development.

　　The accomplishments described above have received robust support from the National Natural Science Foundation of China, the strategic pilot project of the Chinese Academy of Sciences, and the national key research and development programs.

"Penghui Energy Signed an Agreement with Canadian Company for 5.1GWh Energy Storage Cell Cooperation"

Recently, Great Power and Canadian Corporation Discover Energy Systems officially signed a strategic cooperation agreement, according to which the two sides will reach in-depth cooperation in the field of energy storage. Great Power will provide market-competitive cell products for Discover Energy Systems' global projects, and the partnership will drive the completion of the 5.1GWh procurement program. In the future, the two sides will jointly explore the North American energy storage market.

BYD and Bison Brothers Signed 10GWh Energy Storage Strategic Cooperation Framework Agreement

According to Bison Brothers, two leading companies in China's energy storage industry, Shanghai Bison Brothers Power Technology Co. and BYD Automotive Industry Co. announced that they have signed a 10GWh energy storage strategic cooperation framework agreement. The cooperation will be carried out in the global market to tap and expand the new energy storage application market as the core to promote the prosperous development of the energy storage industry ecology.

CATL’s First-Half Energy Storage Business Revenue of 27.985 Billion Yuan, Gross Margin of 21.32%

On the evening of July 25th, Contemporary Amperex Technology Co., Ltd.(CATL)released its 2023 semi-annual report. During the reporting period, the company achieved a total operating revenue of 189.25 billion yuan, a year-on-year increase of 67.5%; the net profit attributable to shareholders of the listed company was 20.717 billion yuan, a year-on-year increase of 153.64%; and the basic earnings per share were 4.72 yuan. Among them, the energy storage battery system business achieved a total operating revenue of 27.985 billion yuan, a year-on-year increase of 119.73%, with a gross profit margin of 21.32%, a year-on-year increase of 14.89%.

The First Domestic Combined Compressed Air and Lithium-Ion Battery Shared Energy Storage Power Station Has Commenced Construction

On July 20th, the innovative demonstration project of the combined compressed air and lithium-ion battery shared energy storage power station commenced in Maying Town, Tongwei County, Dingxi City, Gansu Province. This is the first energy storage project in China that combines compressed air and lithium-ion battery technology. The project is located in Dongguan Village, Maying Town, with a total investment of 812 million yuan, and the initial phase of the project covers an area of 82.86 acres, with an investment of approximately 396 million yuan. The project adopts a combined compressed air and lithium-ion battery energy storage system, with a total installed capacity of 50 MW/200 MWh and a discharge duration of 4 hours. The compressed air energy storage system has an installed capacity of 10 MW/110 MWh, and the lithium battery energy storage system has an installed capacity of 40 MW/90 MWh. Additionally, the project includes the construction of a 110 kV booster substation and transmission lines.

The world's First Prussian Blue Sodium-Ion Battery Energy Storage System Put into Use

Recently, the first demonstration project of Prussian blue sodium-ion battery energy storage system developed by Li-Fun Technology Co.,Ltd. and other companies has been put into use. A representative from Li-Fun Technology stated that the sodium-ion battery cathode materials are mainly composed of transition metal layered oxide, polyanion compounds and Prussian blue compounds. Among them, Prussian blue sodium-ion batteries have lower cost, higher capacity, and better rate performance, showing great potential in the future.

China's First Climbing Auxiliary Service Market Trading Rules for Comments

On August 8, the Shandong Regulatory Office of the National Energy Administration issued the "Notice on soliciting opinions on the" Shandong Power Climbing auxiliary Service Market Trading Rules (Draft for Comments) ", marking the official release of the draft for comments on the first domestic climbing auxiliary service market trading rules.The draft for comments include 36 articles related to the basic principles, market members, and organizations of climbing auxiliary services market trading, and etc. The “Compilation Instructions for Shandong Electric Power Climbing Auxiliary Services Market Trading Rules” points out that the current regulating capacity of the Shandong power system is not sufficient to meet actual demands. During the operation of the spot market, there have been instances of insufficient system regulating capacity in some time periods. In 2022, the real-time market experienced a total of 219 instances of insufficient ramp capacity, accounting for 0.625% of the time periods. Among them, 179 instances were peak ramping storage, mainly concentrated between January and May, and 40 instances were peak-load regulation climbing storage (imbalances even after the curtailment of renewable energy), occurring in February. The insufficient regulating capacity on the system's part has led, on the one hand, to the emergence of peak electricity prices, increasing electricity costs. On the other hand, it has added pressure to the secondary frequency regulation of the system, which is detrimental to the secure and reliable operation of the power grid.

Tibet Autonomous Region Issues the “Notice on Actively Promoting the Pilot Demonstration and Application of Grid-Forming Energy Storage Projects in the Tibet Electric Power System”

On July 24, the Development and Reform Commission of the Tibet Autonomous Region  issued the “Notice on Actively Promoting the Pilot Demonstration and Application of Grid-Forming Energy Storage Projects in the Tibet Electric Power System”. The “Notice” proposes to actively promote the pilot demonstration and application of grid-forming energy storage projects, encourages advanced trials in areas such as Ngari Prefecture, Nagqu City, Shigatse City and Lhasa City, and supports the steady progress in other regions and cities. For existing storage projects, the hardware and software of the energy storage system can be replaced and upgraded according to the evaluation situation, and incremental energy storage projects can be directly equipped with a complete set of grid-forming energy storage system equipment. Power generation enterprises that are willing to deploy grid-forming energy storage can choose the implementation path according to their own conditions. The “Notice” also emphasizes the priority scheduling of grid-forming energy storage pilot projects and encourages active participation in electricity market trading.

Notice Issued by the National Development and Reform Commission on Pumped Storage Power Station Capacity Tariffs and Related Matters

On May 15th, based on strict cost supervision, the National Development and Reform Commission, for the first time, approved the capacity tariffs for all pumped storage power stations in operation and those planned to be commissioned before the end of 2025, according to the new pumped storage pricing mechanism. "Notice on Pumped Storage Power Station Capacity Tariffs and Related Matters" was issued. The notice requires power grid enterprises to ensure power supply, guarantee grid safety, and promote the accelerated development of new energy, while making reasonable arrangements for the operation of pumped storage power stations. It also emphasizes the need for power grid enterprises to sign annual scheduling and operation agreements with the power stations, and to implement fair, open, and impartial dispatching. Local Development and Reform Commissions are instructed to strengthen the supervision of the implementation of pumped storage power station capacity tariffs.

The issuance of the notice provides clear pricing signals, facilitates the formation of a stable industry outlook, and mobilizes proactive efforts from all parties to promote the construction of pumped storage power stations. It enables the comprehensive operation benefits of the power stations and better facilitates the development of new energy, while ensuring the safe and stable operation of the power system.

Notice Issued by the National Development and Reform Commission on Provincial Power Grid Transmission and Distribution Tariffs for the Third Regulatory Period and Related Matters

On May 15th, the National Development and Reform Commission issued a notice on provincial power grid transmission and distribution tariffs for the third regulatory period and related matters, approving the tariffs based on strict cost supervision and further deepening the reform of transmission and distribution tariffs. This round of tariff reform has taken important steps in improving the regulatory system for transmission and distribution tariffs and accelerating the development of the electricity market. Firstly, the structure of transmission and distribution tariffs is more reasonable, with electricity prices for different voltage levels better reflecting the differences in power supply costs, thus creating favorable conditions for promoting electricity market transactions and facilitating the development of incremental distribution networks and microgrids. Secondly, the functional positioning of transmission and distribution tariffs is clearer, with line losses and pumped storage capacity charges, previously included in the tariffs, now separately accounted for. This change enables a more timely and reasonable reflection of changes in user electricity purchase losses and provides a clear reflection of the costs of power system regulation resources, further strengthening the regulation of grid permitted revenue. Thirdly, the incentive and restraint mechanisms are more robust, as demand tariffs for two-part tariff users with high load rates receive discounted rates, encouraging users to reasonably declare their capacity, thereby enhancing the economic efficiency of the power system.