Chinese Energy Storage Overview

With the proposal of the dual carbon goals, accelerating the development of renewable energy has become a crucial task for the current energy industry development in China. During the Chinese "14th Five-Year Plan" period, we will continue to adhere to market-oriented principles and policy-driven approaches, emphasizing coordinated planning and diversified development. We encourage innovative demonstrations and pilot projects to promote the scale, industrialization, and market-oriented development of new energy storage technologies. As national policies are implemented and local governments take action, the proportion of renewable energy generation has been increasing year by year, leading to explosive growth in the energy storage market. Demonstrative projects for various types of energy storage have emerged both domestically and internationally, driving the advancement of energy storage technologies.

Energy storage refers to the process of storing energy through mediums or devices and releasing it when needed. It is an urgent necessity to address the intermittency and instability of renewable energy, as well as to improve the efficiency, safety, and economy of conventional power systems and regional energy systems. Energy storage enables the smoothing of fluctuations in renewable energy, tracking dispatch outputs, peak shaving, and frequency regulation, thereby stabilizing the controllable output of renewable energy generation. This fulfills the requirements for large-scale integration of renewable energy into the grid, which is crucial for building new power systems primarily based on clean energy and achieving carbon peak and neutrality goals.

The domestic energy storage market is developing rapidly, with various new technologies emerging and collectively driving the continuous development of the energy storage industry. High-voltage cascaded energy storage demonstrates significant advantages in large-capacity scenarios. The rapid development of new electrochemical energy storage technologies, such as sodium-ion battery energy storage, flow battery energy storage, and hydrogen storage, is accelerating industrialization. Additionally, various new physical energy storage technologies, such as solar thermal energy storage, compressed air energy storage, and flywheel energy storage, are gradually being implemented through demonstration projects.

Electrochemical Energy Storage

Electrochemical energy storage refers to the technology and measures of storing electrical energy using chemical batteries and releasing it when needed. In the global electrochemical energy storage market, it is mainly divided into five categories: new energy + energy storage, power supply-side auxiliary services, grid-side energy storage, distributed and microgrids, and user-side load shifting scenarios.

Lithium-ion Battery Energy Storage

The lithium-ion battery energy storage material system primarily consists of lithium iron phosphate, and batteries are continuously evolving towards larger capacities. According to the requirements of the Ministry of Industry and Information Technology, energy storage batteries should have an energy density of ≥145Wh/kg, battery pack energy density of ≥110Wh/kg, a cycle life of ≥5000 times, and a capacity retention rate of ≥80%. Currently, electrochemical energy storage, especially lithium-ion energy storage technology, has entered a new period of transformation. New products and technologies such as large cells, high voltage, water-cooling/liquid-cooling, are gradually emerging, driving the continuous evolution of energy storage systems towards larger capacities.

In 2022, the annual shipment volume of lithium-ion battery energy storage reached 130GWh, marking a year-on-year growth of 170.8%, surpassing the growth rate of power batteries. Within the segmented tracks, shipments of electric energy storage, household energy storage, and portable energy storage batteries have surged. Among them, household energy storage experienced the fastest growth, with a growth rate exceeding 3.5 times, while electric energy storage and portable energy storage both achieved growth rates of over 2 times. However, the shipment volume of communication energy storage batteries has slowed down, experiencing negative growth in 2022, with a year-on-year decrease of 25%.

Sodium-ion Battery Energy Storage

Compared to lithium resources, sodium resources are abundant, making sodium batteries less constrained by resource availability in large-scale applications. Additionally, the theoretical cost of positive electrode materials and current collectors for sodium batteries is lower than that of lithium batteries. After achieving industrial cost reduction, the initial investment cost of sodium batteries is expected to be lower than that of lithium batteries. They can achieve 70% of the performance of lithium batteries with a cost advantage of 40-50%, making them suitable for markets with low energy density requirements, such as energy storage.

Technical Features: Low cost, high safety, good performance in high and low temperatures; low energy density, low cycle life.

Applications: Mainly used in backup power supplies, electric tricycles, peak shaving, frequency regulation in power systems, communication base stations, etc.

Key Technologies: New electrode materials, high-rate hard carbon, electrolytes with high electrochemical stability voltage, dry electrode manufacturing processes, etc.

Flow Battery Energy Storage

A flow battery is a high-performance rechargeable battery where the positive and negative electrode electrolytes are separated and circulated independently. It boasts high capacity, wide application areas, and long cycle life. Depending on the active materials in the electrodes, flow batteries can be categorized into iron-chromium, all-vanadium, zinc-bromine, etc., with iron-chromium and all-vanadium being the current mainstream commercial directions.

Technical Features: Large-scale, long life, separate power and capacity; relatively high price, low energy density, and efficiency.

Applications: Used in backup power supplies, electric vehicles, peak shaving, frequency regulation in power systems, integration of renewable energy into the grid, distributed energy supply, etc.

Key Technologies: All-vanadium flow battery technology, zinc-bromine flow battery technology, iron-chromium flow battery technology, organic system flow battery technology.

Mechanical Energy Storage

Pumped Storage

The main principle of pumped storage is to utilize off-peak electricity to pump water back up, then release the water to generate hydropower. When there is excess electricity production, the surplus power is used to operate electric pumps, transporting water to higher elevation reservoirs. When electricity demand increases, the water gates are opened, and water flows downhill from the reservoirs to the original pumping locations, utilizing the potential energy of the water to drive turbines and generate electricity, thus achieving energy storage.

Technical Features: Large-scale, long life, small unit investment, mature technology; limited by geographical conditions, long construction cycle, high construction environment requirements.

Applications: Mainly used for peak shaving, load following, frequency regulation, standby, reactive power regulation, black start, and other auxiliary service tasks.

Key Technologies: Pump-turbines, dam construction, variable speed control, micro-pumping, seawater pumping, etc.

Gravity Storage

The basic principle of gravity storage power generation is similar to pumped storage technology. The basic process of energy storage and generation involves: using surplus electricity to lift heavy objects, storing potential energy; and releasing the potential energy of the heavy objects when needed, driving generators to generate electricity. Currently, there are mainly four types of gravity storage power generation technologies: piston-type gravity energy storage, suspended gravity energy storage, concrete block energy storage towers, and mountainous gravity energy storage.

Technical Features: Low initial investment cost, high safety, long life, not highly demanding on construction environment.

Applications: Used for peak shaving, load balancing, and standby power generation.

Key Technologies: Gravity turbines, pump-turbines, efficient transmission systems, operation control technologies, etc.

Compressed Air Energy Storage

Compressed air energy storage refers to a method of storing energy by compressing air during periods of low grid demand and releasing it during peak demand to drive turbines for power generation. Unlike traditional methods involving pressure vessels like steel tanks, constructing large-capacity stations in underground caverns such as salt caves significantly reduces material and land costs. It can be categorized based on working medium, storage medium, and heat source into traditional compressed air energy storage systems (requiring combustion), compressed air energy storage systems with thermal storage devices, and liquid-gas compressed energy storage systems.

Technical Features: Large storage capacity, long storage cycles, high efficiency, and relatively small investment; relies on gas storage chambers and fossil fuels.

Applications: Used for peak shaving, load balancing, frequency modulation, distributed storage, and backup power generation.

Key Technologies: Compressors, expanders, combustion chambers, thermal storage techniques, supercritical air energy storage systems, etc.

Flywheel Energy Storage

Flywheel energy storage is one of the emerging energy storage technologies, still in the early stages of commercialization. It involves the mutual conversion and storage of electrical energy and the mechanical energy of a high-speed rotating flywheel through bidirectional electric motor/generator systems. Flywheel energy storage offers advantages such as long service life, high energy density, no limitation on charge-discharge cycles, easy installation and maintenance, and minimal environmental impact. It can be used for uninterrupted power supplies, emergency power sources, grid peak shaving, and frequency control. However, flywheel energy storage currently has limitations such as relatively low energy density and significant static losses, and is still in the early stages of commercialization.

Technical Features: High power density, high number of charge-discharge cycles, low working environment requirements, pollution-free.

Applications: Suitable for grid frequency modulation, grid safety and stability control, and power quality improvement.

Key Technologies: High-speed flywheel bodies, high-speed motors and bearings, energy storage arrays, operation control technologies, etc.

Thermal Energy Storage

Thermal energy storage technology utilizes thermal storage materials as a medium to store solar thermal energy, geothermal energy, industrial waste heat, low-grade waste heat, or to convert electrical energy into heat energy for storage. It is released when needed, resolving issues arising from mismatches between the supply and demand of thermal energy in terms of time, space, or intensity, thus maximizing the energy utilization efficiency of the entire system.

Technical Features: Large-scale, long life, relatively small unit investment; low energy storage density, susceptibility to high-temperature corrosion, etc.

Applications: Sensible heat storage is the main thermal storage technology currently, while latent heat storage is becoming mature, often used for building thermal storage or participating in grid peak shaving; thermochemical storage is not yet mature.

Key Technologies: High-performance thermal storage materials, thermal storage units, system control, etc.

Electromagnetic Energy Storage

Supercapacitors

Supercapacitors are a novel power-type energy storage device mainly composed of positive and negative electrodes, electrolytes, and separators. The electrode materials have high specific surface area characteristics, while the separator is typically a fibrous structure electronic insulating material, and the electrolyte is selected based on the properties of the electrode materials. Taking double-layer capacitors as an example, during charging, positive and negative ions in the electrolyte quickly migrate towards the electrodes under the action of the electric field, storing charges by forming a double layer at the interface between the electrode and the electrolyte.

Technical Features: Fast charging and discharging, long service life, good temperature characteristics, environmentally friendly; low energy density, high cost, etc.

Applications: Suitable for grid frequency modulation, absorbing and supplying load power changes, etc.

Key Technologies: New electrode materials, electrolytes with high electrochemical stability voltage, dry electrode manufacturing processes, etc.

Energy Storage Applications

Generation Side

Energy storage on the generation side refers to the construction of energy storage facilities within the power generation network interface of thermal power plants, wind farms, photovoltaic power stations, or within the collection station network interface. The application of energy storage on the generation side in thermal power plants can significantly improve the efficiency of the units and play a very positive role in assisting dynamic operation. This ensures the quality and efficiency of dynamic operation, postpones the use of new units, or even replaces them. Additionally, during the electricity generation process, power generation units can timely charge the energy storage system, improve the efficiency of load discharge during peak electricity demand periods, and discharge to the load at a faster rate, promoting the safe and stable operation of the grid. In new energy generation units such as wind power and photovoltaics, energy storage can ensure the stability and continuity of renewable energy generation while enhancing the flexibility of the grid and the local capacity to digest renewable energy. In wind farms, energy storage can effectively enhance wind power regulation capabilities to ensure smooth wind power output. In centralized grid-connected photovoltaic power stations, energy storage can enhance the effectiveness of peak load regulation and improve the quality of electric energy, reducing the likelihood of anomalies during power system operation.

Grid Side

Energy storage integration into the grid can play various valuable roles, with different types of energy storage having different time scales. They can be synergistically optimized with traditional grid construction, power source construction, and emerging grid load interaction systems, phase-shifting devices, and other grid regulation technologies. With the large-scale development of renewable energy, the continuous deepening of energy transformation, and the continuous maturity of energy storage technology, energy storage will deeply integrate with the power system in the future. It will exhibit a coordinated development trend with various types of power sources and power flows in terms of scale and layout. This requires considering energy storage on the grid side as an optional solution from the perspective of the overall development of energy and power, coordinating energy storage planning, construction, and operation, optimizing the overall operation efficiency of the power system, ensuring system operation safety and power supply reliability, enhancing grid flexibility, incorporating peak shaving, frequency regulation, black start, and other functions, and improving system economy.

Four main scenarios for grid-side energy storage layout include: critical grid nodes with dense loads, large-scale renewable energy aggregation, large-capacity DC input, difficulties in peak shaving and frequency regulation, and insufficient voltage support capabilities; areas with scarce resources along station corridors; weak grid areas such as remote areas with insufficient power supply capacity or areas not covered by the grid; and emergency backup power sources for important power users such as governments, hospitals, data centers, etc. By reasonably laying out new energy storage facilities on the grid side, the safety and stability of the large power grid operation, supply capacity, emergency response capabilities, and the burden on transmission and distribution facilities investment can be improved.

User Side

Commercial and industrial users utilize user-side energy storage projects to store off-peak electricity for peak usage, reducing electricity costs. Particularly, if energy storage systems are matched with electric vehicle charging stations, they can exploit the price difference between peak and off-peak electricity, as demonstrated by leading charging operators in China such as TELD, Star Charge, and China Putian. They have initiated pilot projects to verify the feasibility and synergistic effects of energy storage charging stations or solar + energy storage charging stations.

User-side energy storage has a wide range of applications, and in the future, more and more stations will be constructed and put into operation. On one hand, energy storage stations help improve residents' lives and provide value to businesses. On the other hand, they also contribute to the concepts of energy conservation, environmental protection, and green low-carbon initiatives.

Finally

The future of the power storage market in various regions will further open up, with policies expected to focus on the following three aspects:

Increased openness of the power storage market: Further opening up of distributed energy and user-side storage projects stimulates corporate participation in the storage market.

Relaxation of policies regarding storage participation in power trading: Currently, in some provinces, stored power from storage systems cannot be put onto the grid. However, if storage participation in power trading is further opened up in the future, and stored power is approved for grid access, the channels for realizing the value of storage systems will significantly expand.

Improvement of compensation mechanisms for storage participation in power ancillary services: The country is promoting pilot projects for storage participation in power ancillary service compensation mechanisms. In the future, there may be establishment of corresponding storage capacity electricity fee mechanisms and comprehensive supplementary and regulatory mechanisms.