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Steady policy support needed for sustainable ES growth in China
The China Energy Storage Alliance (CNESA) is a non-profit grade 5A China Social Organization dedicated to the international energy storage industry. It is committed to the healthy development of the industry through positive influence of government policy and promotion of storage applications. George Dudley, International Engagement Manager & Research Manager – CNESA, tells ETN about China's policy advancements, energy sector reforms and ES projects.
George Dudley, International Engagement and Research Manager, CNESA
How do you describe the status of energy storage in your region? What are the drivers and challenges?
China's energy storage industry is currently in a transitional stage, where we are seeing a move from primarily demonstration projects to more commercialized projects. Despite having one of the world's largest installed energy storage capacities, energy storage in China still faces many challenges due to the lack of a market mechanism, insufficient policy support, and the need to clearly define an identity for energy storage technologies. Despite these challenges, both the grid and government regulators have begun to recognize the importance of energy storage, and we are beginning to see greater policy support at the regional and national levels.
What kind of development do you expect in 5-10 years?
With power market reforms working to create mature ancillary services and spot markets, we hope to see more opportunities for flexible resources such as storage to support the grid. As China moves toward greater use of low-carbon energy technologies, we also hope to see greater use of energy storage as a supporting technology for renewable integration. We are also seeing new and innovative behind-the-meter energy storage applications, such as integration with 5G towers, solar-storage-charging stations, data center applications, and energy storage applications for green shipping ports. Finally, and perhaps most importantly, we hope to see further policy and market support which will help create a long-term mechanism for commercialized energy storage.
What has been the progress with respect to the adoption of energy storage in the region?
China is a world leader in energy storage capacity, with over 1.7GW of operational electrochemical energy storage as of 2019 end. Applications vary by region. I&C applications are found primarily in industrial areas such as Jiangsu province, and in the commercial centers of the Beijing-Hebei region. Renewable integration applications are growing in the west, where large-scale solar generation is installed. Stationary energy storage capacity continues to see steady growth, but can be sensitive to sudden policy changes. China will soon see the release of its 14th five-year plan, covering the 2021-2025 period. We expect to see energy storage incorporated as part of the plan's energy strategy, which will help promote greater use of storage at the national level.
How has the government been promoting energy projects and related R&D?
2017 saw the release of the first national-level policy on energy storage, the Guiding Opinions on Promoting Energy Storage Technology and Industry Development, which provided a great boost of support for energy storage technologies and applications nationwide. The policy was further expanded with a 2019-2020 Action Plan released in 2019. Policies enacted at the provincial level have also supported storage, both indirectly and directly. A notable recent example has been policies supporting solar+storage projects, as well as the 'shared energy storage model' launched in Qinghai last year, which allows energy storage stations paired with solar PV to be freely dispatched by the grid. Though these regional and national policies have been helpful in supporting energy storage, greater policy support is still needed to create a sustainable energy storage market.
What are the key operation projects in your region?
Energy storage applications in China can be categorized into grid-side, behind-the-meter, renewable integration, and ancillary services applications. Energy storage in China has been led primarily by the behind-the-meter market, which accounted for 44 percent of new capacity in 2019. Renewable integration, ancillary services, and grid-side applications were nearly equal in terms of new capacity added in 2019, at 17 percent, 20 percent, and 19 percent, respectively. In the future, we can expect to see continued growth in behind-the-meter storage, as well as greater growth in renewable integration projects as solar+storage and wind+storage, become increasingly popular strategies for limiting curtailment and supporting a grid with a high proportion of renewable energy.
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