According to data from the National Energy Administration (NEA), China’s new energy storage capacity increased by 40 percent in the first half of the year to 44 gigawatts. The currently available capacity has already exceeded the target that the Middle Kingdom has set for 2025, Bloomberg reported.
Currently in China renewable energy installation costs have fallen to the point where the combined cost of generating solar energy and storing it is almost as low as the cost of generating energy from coalaccording to SooChow Securities Ltd.
Unused capacity
Yet China’s energy storage capacity remains largely untapped. In the area served by State Grid Corp. of China, which covers more than 80 percent of the country, In the first six months of this year, the system was used for an average of 390 hours and had 93 charge and discharge cyclesaccording to NEA data.
Compared to the previous year, these numbers mean a twofold increase in the use of energy storage. However, this is still not enough. In the first half of the year On average, the system only ran once every other day, and the remaining 91 percent of the time it remained idle.
Most energy storage facilities in China are being built due to local government requirements to To obtain a building permit, large wind and solar farms must either build or rent energy storage space. This gives companies a reason to build systems to deliver profitable renewable power plants, but little incentive to ensure that energy storage will be used.
Energy market reform needed
China will need further energy market reforms to incentivize storageBloombergNEF believes. Such a solution could be, for example, the introduction variable electricity prices depending on the time of day. Such solutions, which are already being tested by many provinces, can enable energy trade arbitrage (in simpler terms, buying energy from the grid when prices are low), which can be used by storage systems. Thanks to variable prices, energy storage systems will not only act as a grid stabilizer, but will also generate additional profits. Operators could buy energy when there is too much of it in the grid and the price is low, and sell it at a profit, for example, at night.
China’s Renewable Energy Explosive Growth: Energy Storage Needed to Meet Growing Intermittent Generation / Bloomberg
China’s Clean Energy Boom
China is currently in the midst of a clean energy boom. So far, the grid has managed to use most of that energy, although some renewables have been temporarily shut down. Solar and wind curtailments have increased in the first half of the year, but are still at relatively reasonable levels of no more than 4%, according to the NEA.
Ultimately, however, generating so much energy that is only available for a few hours a day will cause serious problems for a grid designed to distribute it around the clock. To make sure that doesn’t happenChina needs to rely more on its energy storage fleet.
