continuously and rapidly decreasing costs. As
costs fell, new technologies and materials were
developed.
Second, pilot applications gradually evolved
into commercial demonstration and the most
promising energy storage applications were
identified. There were two stages to this process.
In 2011–13, demonstration projects were
designed mainly to verify the technology and
application—they lacked financial considerations. By 2013–15, the projects began to explore
business models and payback periods, gradually
transiting to commercial demonstration. At the
same time, it became clear which applications
held the most promise for development: power
generation, ancillary services, power transmission and distribution, renewable energy and user
consumption, electric vehicles and the Energy
Internet.
Third, the energy storage industry explored
pathways to large-scale commercial development. In 2015, China’s installed electrochemical
energy storage capacity was 141.1 MW, compared to only 2.4 MW in 2010. As installed
capacity grows, the energy storage value chain
improves, and manufacturers are motivated to
invest.
The energy storage industry is now using
three mainstream commercial application models, each of which offers several market opportunities. For example, wind farms equipped with
energy storage can reduce wind curtailment and
increase revenues by providing ancillary services. And consumers can use energy storage to
save money by not using electricity—or they can
earn money by releasing stored energy into the
grid—at peak periods.
Energy storage is growing rapidly. In 2017,
the cumulative installed capacity of energy storage projects in China was 27.7 GW. Of this,
pumped storage had by far the largest share at
99%, followed by electrochemical energy storage
at 318.1 MW or 1% of the total, an increase of
18% on the previous year. The installed capacity
of China’s newly opened energy storage projects
was 22.8 MW, up 114% year-on-year.
By region, east China has the largest installed
capacity of newly opened energy storage projects
at 12.2 MW, which is 53% of the total. All these
projects were deployed by users, mainly by
industrial parks, helping companies reduce their
electricity costs by adapting to peak and off-peak
prices.
By application, the newly opened projects
were deployed in grid-connected centralised
renewable energy plants and end-user applications. End-user installed capacity was the largest
at 17.8 MW, 78% of the total. This equates to
67% growth year-on-year and 287% month-onmonth (Table 12).
6.3.3 The Role of Energy Storage
Technologies in China’s
Energy Revolution
First, energy storage may be the best solution to
address the grid connection challenge facing
large-scale clean energy. Energy storage is an
important factor in the energy transition, because
when large-scale renewable energy enters the
transmission system, it impacts the entire power
system due to its unstable supply. China has
severe wind, solar, hydro and nuclear curtailment
problems, with more than 100 GWh of electricity
wasted annually. Energy storage can help coordinate unstable renewable energy supply with
energy consumption and smooth over fluctuations in production and demand. It shares this
role with IT technologies like the smart grid,
Internet of things, and big data analysis and
management.
Second, energy storage is a key enabler for the
deep integration of IT and energy technologies.
Unlike other types of energy—oil, gas and coal
—electricity is used as soon as it is produced.
Historically, it could not be stored cost effectively, with the exception of pumped storage,
which is costly and is used in hilly and mountainous regions. Energy storage has the potential
to break this constraint, allowing electricity to be
stored until needed or when prices are lowest.
When integrated with the Energy Internet, it
enables generation, distribution and consumption
to be optimised in a way not previously possible.
Third, energy storage will be a key enabler to
start the smart electricity revolution. As electricity is a carrier of both energy and information,
350
S. Zifeng and N. Dickens
costs fell, new technologies and materials were
developed.
Second, pilot applications gradually evolved
into commercial demonstration and the most
promising energy storage applications were
identified. There were two stages to this process.
In 2011–13, demonstration projects were
designed mainly to verify the technology and
application—they lacked financial considerations. By 2013–15, the projects began to explore
business models and payback periods, gradually
transiting to commercial demonstration. At the
same time, it became clear which applications
held the most promise for development: power
generation, ancillary services, power transmission and distribution, renewable energy and user
consumption, electric vehicles and the Energy
Internet.
Third, the energy storage industry explored
pathways to large-scale commercial development. In 2015, China’s installed electrochemical
energy storage capacity was 141.1 MW, compared to only 2.4 MW in 2010. As installed
capacity grows, the energy storage value chain
improves, and manufacturers are motivated to
invest.
The energy storage industry is now using
three mainstream commercial application models, each of which offers several market opportunities. For example, wind farms equipped with
energy storage can reduce wind curtailment and
increase revenues by providing ancillary services. And consumers can use energy storage to
save money by not using electricity—or they can
earn money by releasing stored energy into the
grid—at peak periods.
Energy storage is growing rapidly. In 2017,
the cumulative installed capacity of energy storage projects in China was 27.7 GW. Of this,
pumped storage had by far the largest share at
99%, followed by electrochemical energy storage
at 318.1 MW or 1% of the total, an increase of
18% on the previous year. The installed capacity
of China’s newly opened energy storage projects
was 22.8 MW, up 114% year-on-year.
By region, east China has the largest installed
capacity of newly opened energy storage projects
at 12.2 MW, which is 53% of the total. All these
projects were deployed by users, mainly by
industrial parks, helping companies reduce their
electricity costs by adapting to peak and off-peak
prices.
By application, the newly opened projects
were deployed in grid-connected centralised
renewable energy plants and end-user applications. End-user installed capacity was the largest
at 17.8 MW, 78% of the total. This equates to
67% growth year-on-year and 287% month-onmonth (Table 12).
6.3.3 The Role of Energy Storage
Technologies in China’s
Energy Revolution
First, energy storage may be the best solution to
address the grid connection challenge facing
large-scale clean energy. Energy storage is an
important factor in the energy transition, because
when large-scale renewable energy enters the
transmission system, it impacts the entire power
system due to its unstable supply. China has
severe wind, solar, hydro and nuclear curtailment
problems, with more than 100 GWh of electricity
wasted annually. Energy storage can help coordinate unstable renewable energy supply with
energy consumption and smooth over fluctuations in production and demand. It shares this
role with IT technologies like the smart grid,
Internet of things, and big data analysis and
management.
Second, energy storage is a key enabler for the
deep integration of IT and energy technologies.
Unlike other types of energy—oil, gas and coal
—electricity is used as soon as it is produced.
Historically, it could not be stored cost effectively, with the exception of pumped storage,
which is costly and is used in hilly and mountainous regions. Energy storage has the potential
to break this constraint, allowing electricity to be
stored until needed or when prices are lowest.
When integrated with the Energy Internet, it
enables generation, distribution and consumption
to be optimised in a way not previously possible.
Third, energy storage will be a key enabler to
start the smart electricity revolution. As electricity is a carrier of both energy and information,
350
S. Zifeng and N. Dickens