On June 7, 2022, the National Development and Reform Commission and the National Energy Administration jointly issued a notice on further promoting the participation of new energy storage in the electricity market and dispatch, clarifying the positioning of the new energy storage market, establishing and improving relevant market mechanisms, price mechanisms, and operating mechanisms, improving the level and efficiency of new energy storage utilization, and guiding the healthy and rapid development of the industry.
New energy storage has advantages such as fast response, flexible configuration, and short construction period. It can play various roles in power operation, such as peak shaving, frequency regulation, slope climbing, and black start. It is an important component of building a new power system and a key to achieving the "dual carbon" goal.
Definition and classification of energy storage
Energy storage refers to the process of converting electrical energy into other forms of energy through physical or chemical means for storage, and releasing it when needed, similar to a large power bank. Compared with traditional fossil fuels, wind and photovoltaic power generation have unstable and intermittent problems that need to be solved through the peak shaving and frequency regulation capabilities of energy storage equipment.
According to energy storage methods, energy storage can be divided into three categories: physical energy storage, chemical energy storage, and electromagnetic energy storage. Physical energy storage mainly includes pumped storage, compressed air energy storage, flywheel energy storage, etc. Chemical energy storage mainly includes lead-acid batteries, lithium-ion batteries, sodium sulfur batteries, flow batteries, etc. Electromagnetic energy storage mainly includes supercapacitor energy storage and superconducting energy storage. New energy storage projects are energy storage projects other than pumped storage, and currently common ones are lithium battery energy storage and hydrogen energy storage.
Industry development status
Multi line parallel development, rapid development of electrochemical energy storage
The energy storage industry as a whole is in a stage where multiple technological routes coexist. Pumped storage has the most mature development and installed capacity, and electrochemical energy storage is the fastest developing technology among new energy storage. Different new energy storage technologies can achieve optimal energy storage effects in different application scenarios based on their output power, energy density, energy storage capacity, charging and discharging time, and other characteristics.
Pumped storage and compressed air are suitable for energy storage scenarios with long-term and large-scale energy allocation, mainly used for large-scale renewable energy grid connection, grid side power auxiliary services, etc. to achieve long-term energy management; Lead acid batteries, flow batteries, lithium batteries, and other electrochemical energy storage systems have a power range of kilowatts to megawatts, flexible discharge times, and are suitable for short-term power grid frequency regulation and energy scheduling scenarios; Flywheel and supercapacitor energy storage technologies have fast response speed and high flexibility, and are generally used in emergency uninterrupted power supply and other fields.
Current Development Status of Pumped Storage Energy
In order to achieve the "dual carbon" goal, China has proposed to strictly control coal-fired power projects and requires strict control of coal consumption growth during the 14th Five Year Plan period and gradual reduction during the 15th Five Year Plan period. The high proportion and large-scale development of new energy sources such as wind and light have become inevitable. As one of the best ways to accept new energy generation capacity, pumped storage has a place to be used.
According to the Plan, by 2025, the total scale of pumped storage production will be over 62 million kilowatts; By 2030, the total production scale will be around 1.2 trillion kilowatts; By 2035, meet the high proportion and large-scale development needs of new energy. Therefore, in addition to actively promoting the construction of ongoing projects and accelerating the commencement of new construction projects, the Plan also requires the development of small and medium-sized pumped storage construction according to local conditions. According to the China Renewable Energy Development Report 2020, as of the end of 2020, China has built 31.49 million kilowatts of pumped storage power stations and is currently under construction with 53.73 million kilowatts, ranking first in the world in terms of development scale. However, considering the demand of the power system, the installed capacity of pumped storage power stations in China will still be significantly increased in the medium to long term.
Current Development Status of Compressed Air Energy Storage Technology
Compressed air energy storage technology has the advantages of large energy storage capacity, long energy storage cycle, high system efficiency, long operating life, and low investment. It is one of the large-scale physical energy storage technologies that is very suitable for long-term energy storage. In the past three years, compressed air energy storage technology has achieved significant results in system integration demonstration by domestic research institutions and enterprises. The energy storage R&D team of the Institute of Engineering Thermophysics of the Chinese Academy of Sciences built the world's first 10MW salt cavern advanced compressed air energy storage commercial demonstration power station in Feicheng, Shandong Province in September 2021; The power station has successfully passed the grid connection acceptance and officially connected to the grid for power generation, with a system efficiency of 60.7%. The 10MW advanced compressed air energy storage system located in Bijie, Guizhou completed grid connected power generation in October 2021. The first international 100MW advanced compressed air energy storage national demonstration project has been constructed in Zhangbei County, Zhangjiakou City, Hebei Province. The system development and demonstration system integration construction have been completed, and system debugging is currently underway. The project is planned to be put into commercial operation by the end of 2022.
Current Development Status of Lithium Electronic Energy Storage
According to the distribution of energy storage project operations, China, the United States, and Europe held the dominant position in the global energy storage market in 2020, accounting for a total of 86% of the total newly added global operations. Among them, China's newly added operational projects account for the largest proportion, accounting for 33% of the total scale.
Against the backdrop of the continuous promotion of new energy vehicles and the continuous progress of battery technology, electrochemical energy storage has developed rapidly in China. At present, electrochemical energy storage is mainly based on lithium batteries, with a market share of about 90%. The domestic energy storage market was in the demonstration application period from 2018 to 2020. At this stage, the commercial model of electric energy storage is still being explored. Driven by China's "new infrastructure" and stimulated by overseas demand markets, the energy storage lithium battery industry has entered its initial stage, and the construction of demonstration application projects is accelerating. With increasing policy support for new energy storage, the establishment of commercialization mechanisms in the electricity market, clear energy storage business models, and the continuous decrease in lithium battery costs, the shipment volume of energy storage batteries will continue to rise.
Industry development trends
The obvious advantages of new energy storage technologies promote the consumption of renewable resources
Energy storage technology is an effective technology to solve the volatility and intermittency of new energy systems mainly composed of wind and light. The future energy system will be a diversified energy system composed mainly of new energy and various forms of energy. The volatility and intermittency of wind and photovoltaic power generation determine that flexibility will be an essential component of new energy systems.
From a technical perspective, energy storage can precisely meet the flexibility requirements of new energy systems. Therefore, the technology path of achieving large-scale access to renewable energy through energy storage technology and promoting low-carbon energy transformation is highly anticipated by the industry. New energy storage can achieve energy transfer, charging during low grid loads and discharging during peak loads, reducing peak loads, filling power generation valleys, promoting the consumption of renewable energy, and effectively reducing wind and solar curtailment rates.
Further Accelerating the Marketization of Energy Storage in National Strategic Layout
In February 2022, the National Development and Reform Commission and the National Energy Administration issued the "14th Five Year Plan for the Development of New Energy Storage", proposing that by 2025, new energy storage will enter the stage of large-scale development from the initial stage of commercialization and have the conditions for large-scale commercial application; By 2030, the comprehensive market-oriented development of new energy storage will fully support the achievement of the carbon peak target in the energy sector as scheduled. The national policy emphasizes the importance of new energy storage in achieving the "dual carbon" goals, clarifies the development goals of the new energy storage industry at each stage, and has a guiding role for industrial development.
The demand for new energy generation in the market is strong, and the industry is developing rapidly
In recent years, with the continuous development of renewable energy, especially after the establishment of the "dual carbon" (carbon peak and carbon neutrality) goals, the urgency of building a new power system has increased, and the development process of China's energy storage industry has accelerated. Since 2010, the installed capacity of new energy in China has been continuously increasing, reaching 63741MW in 2021, with a CAGR of 32.1% from 2010 to 2021. The proportion of new energy installed capacity to the total installed capacity in China has been steadily increasing year by year, reaching 26.7% in 2021. The 2021 China New Energy Power Generation Analysis Report predicts that this proportion will reach 41% by 2030.
