We have Good News for battery storage in China, and we have Bad News, and we have Good News again. Production is going up. Installations are going up. Costs are coming down. But covid-19 and erratic policy changes are temporary roadblocks.
China reaches 1.7 GW of electrochemical storage capacity
According to new numbers released by the China Energy Storage Alliance, the country’s storage capacity topped 32.4 GW at the end of last year. The association said the storage market is expected to continue to grow steadily in the years ahead.
China’s electrochemical energy storage market grew 59.4% thanks to 636.9 MW of newly installed capacity last year, according to figures released by the China Energy Storage Alliance (Cnesa) from its Global Energy Storage Project Database.
Overall energy storage growth was particularly strong in China in the last two years, with 8.1 GW of new capacity, of which around 1.45 GW was electrochemical. “The cause of this rapid growth was not just a small base in the initial development stages, but the creation of conditions conducive to industry development,” said the industry body.
Mar 3, 2020 — China’s energy storage industry entered a period of “rational adjustment” in 2019, as overall growth in new projects and capacity slowed down, yet deployed around 519.6MW/855MWh of new electrochemical energy storage capacity domestically.
China also saw its first front-of-meter grid-scale storage systems deployed that will perform grid-balancing services on a market basis, as well as the launch of financial products funded to the amount of US$750 million which the Alliance said “should help alleviate some of the financial difficulties within the industry and boost development”.
May 6, 2020 — Shifting policies and an unstable economy have put energy storage on an unsure footing.
Businesses can install storage to benefit from cheap night-time electricity. The bigger the difference with the daytime rate, the bigger the benefit. In China, electricity prices by and large are set by the government and cannot float freely as in other countries. Facing slower economic growth, the government has sought to help businesses by lowering their electricity costs, first by 10.6% in 2018 and by another 10% in 2019. Ostensibly to weather the coronavirus pandemic, prices were lowered a further 5% in February for the first half of 2020.
Battery energy storage has experienced a fantastic year with record-breaking growth in 2018. But the good days may come to an abrupt end now, as the critical investors announced to scrap investment plans and leave the sector.
The two power grid companies in China are the investors we refer to. They have become the most significant spenders on battery energy storage (BES) since last year, and the reason for an over 300% growth of the sector.
However, the two “big brothers” of the power market, China State Grid (SGCC) and China Southern Grid (CSG), recently launched similar investment strategies that demand strict caps on capital expenditure.
The China Energy Storage Alliance is a non-profit industry association dedicated to promoting energy storage technology in China.
In 2019, China’s solar industry transitioned from an era of subsidized solar to a new era without subsidies. Solar power has now reached a state of near grid parity, meaning that solar generation must now face direct competition with conventional fossil fuel generation. Those in the energy industry are aware of the challenges of solar generation, including instability and intermittency, sensitivity to weather changes, and the difficulty of the grid to consume solar generation on a large scale. These issues put solar power at a disadvantage when compare to conventional generation and pose a challenge to the entire energy system. Energy storage offers one method of confronting these challenges. Energy storage can stabilize generation, improve power quality, provide storage of excess generation, help increase the grid’s consumption of renewable generation, and increase the flexibility of grid dispatch. Through grid parity, solar power generation may now pave the way for development of the “solar-plus-storage” market.
Analysts: China's Energy Storage Market to "Skyrocket" by 2024 — Green Tech Media
Jul 10, 2019 — Wood Mackenzie:
China’s cumulative energy storage capacity is projected to skyrocket from 489 megawatts or 843 megawatt-hours in 2017 to 12.5 gigawatts or 32.1 gigawatt-hours in 2024. This represents a 25-fold increase in the installed base.
China added as much battery-storage capacity in 2018 as all previous years combined — Quartz
Aug 27, 2018 — “China isn’t building gigafactories,” says Patrick Hurley, chief technology officer of A123, a lithium-ion battery company. “It is building gigacities.”
Gigafactories are named for their capacity to build batteries in tens of gigawatt-hours (GWh) every year, which is about a million times the amount of energy consumed by a typical US household in a day. What Hurley meant by gigacities are complexes that include not just the gigafactory but everything else needed to support it: housing, infrastructure, research and development centers, and universities to train staff.
China’s battery ambition can be seen in the speed at which the country is adding battery-storage capacity. At the start of 2018, China had an operational battery-storage capacity of 389 megawatts (MW). By August, China had added another 340 MW of additional capacity. That’s why the China Energy Storage Alliance (CNESA) declared 2018 to be “one of the most significant years yet for the industry.”
Mar 20, 2020 — The novel coronavirus (Covid-19) outbreak has caused a slowdown of China’s economic growth, and with China being a global manufacturing hub, is having a negative impact on the world economic growth as well. The majority of the factories remain closed or are not able to attain full production capacity due to shortage of staff and raw materials. These actions have negatively impacted stock markets across the world. Corresponding to the spread of this coronavirus outbreak, risks are on the rise.
China’s battery manufacturers, supported by the government’s industrial expansion vision, are coming up with massive battery production plants. CATL and BYD, two of the largest battery manufacturers in China, are widening their production capacities abroad backed by the Chinese Government. Lithium-ion (Li-ion) batteries are the undisputed market leader in the electrochemical storage projects across the world. The global lithium-ion battery market is dominated by players such as Panasonic, LG Chem, Samsung SDI, BYD and CATL. Their position will strengthen over the next five years but with a tilt towards Chinese suppliers, led by BYD and CATL.
As of December 2019, the number of Li-ion battery megafactories that are in pipeline to 2029 stood at 115, with 88 of them in China. Europe’s planned Li-ion battery capacity is 348GWh by 2029, while China’s pipeline stands at 564GWh by 2028. The total Li-ion battery capacity which is under pipeline is equivalent to 39 million electric vehicles (EVs) by 2029. Encouraging government policies, huge manufacturing base, protectionist measures, along with rising demand for batteries augur well for the Chinese battery market.
China embraces grid-sited energy storage | IHS Markit
May 28, 2019 — In many ways, 2018 was the year of grid-sited energy storage inChina. One after another, grid companies announced massive batteryenergy storage procurements to install in their transmission anddistribution grids—many of these surpassing the 100 MW-scale.The sudden onset of additions has spurred rapid growth in China'stotal installations. By the end of 2019, grid-sited projects areexpected to reach a cumulative 838 MW, up from only 7 MW in2017.
Apr 17, 2019 — China Energy Engineering Group Shanxi Electric Power Engineering has started building a 500MW solar PV project, split between two separate 250MW plants, located in Licheng County and Pingshun County in Shanxi Province. No further details were provided in the filing.
Meanwhile, China Energy Engineering Group Jiangsu Electric Power Design Institute has started building a huge energy storage system in Jiangbei New District, Nanjing, in Jiangsu Province.
The 130.88MW/268.6 MWh grid-side electrochemical energy storage system is claimed by the company to have the largest capacity and the highest power in China, but no further details were released on the specific storage technology – presumably lithium-ion batteries – being used for the two-hour duration system.
The 130.88MW/268.6 MWh grid-side electrochemical energy storage system is claimed by the company to have the largest capacity and the ...
Jul 10, 2019 — The world’s biggest solar market could be about to replicate that feat in energy storage, provided it manages to reform the payment system for rewarding the grid services offered by batteries.
The current flat payment system will, according to WoodMac, change “to a market integrated with spot energy prices by 2020” and that change, together with technology advances and cost reductions, will pave the way for China to supplant South Korea as the biggest energy storage market in the Asia Pacific region.
The consultant predicted the 489 MW/843 MWh of installed energy storage in China two years ago would rise to 12.5 GW/32.1 GWh in 2024.