Understanding the Goals of the First Batch of National Energy Administration Energy Storage Demonstration Projects

Since the release of the “Guiding Opinions on Promoting Energy Storage Technology and Industry Development” in 2017, China's energy storage industry has been developing rapidly. After more than two years of preparation and planning, the National Energy Administration officially solicited the first batch of energy storage demonstration projects in China on July 17 of this year. The organization and selection of this batch of energy storage demonstration projects will help to analyze and summarize successful experiences and existing problems, promote the integrated innovation of advanced energy storage technologies, equipment, and systems, established and improved relevant technical standards and engineering norms, cultivate business models with market competitiveness, and promoted the introduction of relevant policies and regulations in support of the development of energy storage. 

As a supporting organization of the National Energy Administration, China Energy Storage Alliance (CNESA) has been participating in a variety of works in support of the demonstration project, assisting in organizing industry experts and upstream and downstream enterprises to share their opinions and participate in discussions. Key indicators for the energy storage demonstration projects include:

1.       Demonstration projects should reflect advanced technologies and independent innovation

Screening indicators include equipment lifecycle, conversion efficiency, system performance, system reliability, project layout, environmental protection, etc. Declared projects should reflect independent innovation and encourage the use of original technologies with independent intellectual property rights. Screening indicators include the level of autonomy of core technologies and equipment, whether there are significant original technologies, and whether there are relevant patents and software copyrights.

2.       Demonstration projects must consider safety precautions

To avoid hidden dangers and risks in energy storage system integration and equipment operations, a detailed product inspection report is needed to illustrate whether the energy storage components and related electrical equipment can meet relevant national or trade standards. Projects need to ensure that the system is matching the application procedures and grading of information safety, emergency response planning, monitoring facilities, fire warning system, firefighting system, etc., and should consider how to deal with extreme weather and power system risks.

3.       Demonstration projects should reflect the comprehensive benefits of energy storage

In addition to demonstrating technological innovations, demonstration projects also need to carry out quantitative and qualitative evaluation of comprehensive benefits under specific application scenarios. First, the project must be systematically analyzed from the perspective of full life cycle management, and a reasonable resource recycling plan must be designed. All kinds of project costs should be fully considered in terms of construction, operation and maintenance, as well as all kinds of non-technical costs, reflecting the real situation of the industry. Second, analysis must be conducted on the efficient utilization of clean energy and the comprehensive benefit of energy storage under specific application scenarios. In the process of expounding the comprehensive economic benefits of the project, quantitative or qualitative judgment is also needed, and corresponding supporting basis should be provided.

4.       The economic indicators of the demonstration projects need to be fully assessed

Low economic value is a common phenomenon in current energy storage projects. In the process of evaluating the economic index of the project, on the one hand, it should be evaluated whether the demonstration project can break through the market mechanism bottleneck through innovative models or regional policies adapted to local conditions, and effectively explore the establishment of a long-term mechanism of industry development. On the other hand, it is also necessary that through the application of advanced technologies, the demonstration project can provide feedback for the implementation of local supporting electricity markets and ancillary power service policies.