China came up with a national energy storage industry innovation alliance on Monday aiming to further boost the country's energy storage sector, as the country aims to promote large-scale use of energy storage technologies at lower costs to back up the world's biggest fleet of wind and solar power p Contact online >>
China came up with a national energy storage industry innovation alliance on Monday aiming to further boost the country''s energy storage sector, as the country aims to promote large-scale use of energy storage technologies at lower costs to back up the world''s biggest fleet of wind and solar power plants.
China Energy Engineering Group Co Ltd, together with Contemporary Amperex Technology Co Ltd and solar product manufacturer Trina Solar, devised a China Energy Storage Industry Innovation Alliance that includes 62 member companies and proposes to further boost the country''s energy storage sector and facilitate a new power system dominated by new energy that includes wind and solar power.
The new-type energy storage systems, meaning all technologies except pumped hydro, is a flexible way of adjusting resource allocation that plays a key role in the large scale of wind and solar energy, said Li Jingru, vice-president of State Grid Economic and Technological Research Institute Co Ltd.
The country is aiming for 50 percent electricity generation from renewable power by 2025, up from 42 percent currently, the National Energy Administration said.
The new-type energy storage sector is embracing massive opportunities in China as the country has been promoting storage technologies in accordance with a massive wind and solar capacity build-out to allow exports of large-scale clean energy to other regions, Li said.
China is targeting new-type energy storage installed capacity of 30 gigawatts by 2025, part of efforts to boost renewable power consumption and ensure grid stability, according to a statement by the National Development and Reform Commission and the NEA.
The 30 GW includes storage using electrochemical, compressed air, flywheel and super-capacitor systems, except pumped hydro.
The country aims to cut the cost of electrochemical energy storage systems by 30 percent by 2025, according to a five-year plan by NDRC, and complete the commercialization of new-type energy storage systems by 2030.
The alliance will further facilitate the country to seek breakthroughs in long-duration storage technologies such as compressed air, hydrogen and thermal energy, and aim for self-reliance in key fields, it said.
China’s new energy storage market appears to be one of the few industries still facing immense business opportunities amidst a worsening economic slowdown.
However, the energy regulators have made some clear changes in their plan to develop the young sector, as indicated in the 14th Five-Year “New Energy Storage” Execution Plan issued two months ago (2022-03-21).
The 14th FYP for New Energy Storage Development shows that Beijing now has different emphases now when it compares to the 2021 policy “Guiding Opinion on Advancing Development in the New Energy StorageIndustry.”
Both policies aim to provide development guidelines for the industry from now to 2025 (and towards 2030). They are written by the same regulators—National Energy Administration and National Development and Reform Commission.
The most noticeable change in the new plan (the “FYP”) is the shelving of a tangible installed capacity target for the new energy storage sector.
In the 2021 policy (“Guiding Opinion,”) the regulators stipulate the industry to ten-fold its size to 30GW by 2025, from 3GW in 2020.
Nonetheless, in the FYP, the duo did not confirm any tangible target for 2025. That means, effectively, the 30GW target previously suggested has been dropped.
Still, the two energy regulators outline the near-term priorities among different energy storage technologies in China.
The rhetoric suggests that electrochemical storage—especially lithium battery cells—will remain the dominant storage business in the next five years. The policy also hints that compressed air and coal-fired/nuclear power storage would play more decisive roles.
Regarding different frontier technology, short-spam flywheel storage and long-spam hydrogen energy storage are the most promising areas under the policy.
Besides these solutions, Beijing hopes to see the development of various energy storage technologies. The areas mentioned in the policy include flow battery, lead-carbon battery, super-capacitor, liquid metal battery, and metal-air electrochemical battery. However, the near-term priorities of this area remain to be technology research, as these areas are still far from entering large-scale industrialization.
A noticeable change in the “New Energy Storage 14th FYP,” compared to the 2021 “Opinion” policy, is the inclusion of convention power generation business. The regulators include coal-fired energy storage and nuclear stream as two commercial energy-storage options, while Beijing’s previous policymaking has never seriously considered the two solutions.
In the “Guiding Opinion” draft, the policymakers only ask for the industry to utilize the “phased-out” coal-fired power plants as locations to build new energy storage units.
Technically, “new energy storage” in the Chinese market always refers toanyenergy storage solutions other than the conventional and dominant pumped hydro storage method. But the industry mostly looked to battery cells, fuel cells and other frontier technologies (such as compressed air, flywheel, and super-capacitor) for the job in the past.
The inclusion of the two “conventional” energy businesses—coal-fired and nuclear—reflects Beijing’s overall energy strategy shift after the 2021 energy crisis. A growing emphasis is placed on promoting and transitioning the domestic and convention energy businesses instead of phasing them out for good.
From now to 2025, it is foreseeable that technical modifications of coal-fired power plants to fit the energy-storage requirement would become a new investment trend of the utilities.
Several policy signals in the past months suggest that the nation’s taking a step back from its formerly aggressive decarbonization approach. These signals include the underwhelmed clean-tech targets, with the shelving of the 30GW new energy storage capacity target another example.
These signals show that the top authority sees the security of energy supply as a top priority for the nation in the near run. Beijing’s dropping of the installation target is also related to other factors: including safety and cost concerns in an overheated energy storage market.
But despite the setback, the new energy storage FYP suggests that the market would continue enjoying a tailwind, we believe.
Following the 2021 “Opinion” policy release, storage battery sales reached a record high of 48GWh in 2021, which is 2.6 times the 2020 amount. Investment interest in advanced energy storage technologies, including flywheel, salt-carven compressed air, electrolysis power-to-gas, and vanadium flow battery, is still soaring.
The sector’s robust growth is not purely based on Beijing’s targets. Instead, it is mainly related to China’s plan to multiply its renewable capacity. The quick surge of renewable projects imposes significant challenges to the power market supply-demand balance and the electricity system operation.
The nation should add energy storage capacity and apply different technologies for different situations—from the short-term storage needed by the offered 5G stations to the long-term storage suitable for large-scale solar complexes in remote areas.
We believe that Beijing has opted for a “wait and see” approach toward the various technology options. Hence, the coming four years provides a great window of opportunity for embryonic energy-storage technologies to demonstrate their commercial values and quickly reduce costs.
Notably, Hydrogen (Ammonia) energy storage is mentioned multiple times in the policy.
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