Navigant Research Blog

China Launches Major Energy Storage Project

Anissa Dehamna — January 17, 2012

China made news earlier this month in the energy storage sector with the announcement that a 6-megawatt (MW)/36 megawatt-hour battery has been installed alongside a 40-MW solar PV installation and a 100-MW wind installation in Hebei Province.

The storage system may seem oversized, but according to the State Grid Corporation of China, which is one of the two major utilities in China (China Southern Power Grid Company is the other) and Chinese battery manufacturer Build Your Dreams (BYD), the site will eventually incorporate 300 MW of wind and 100 MW of solar.  Pike Research has hypothesized that China will be a great market for energy storage if vendors can get the secret sauce right: reasonable value for energy, power and a proven ability to deliver renewables integration services, and ideally, a manufacturing presence in China.

China’s energy mix is dominated by coal, followed by hydro and nuclear.  Although the country has a significant installed capacity of renewables, not all of this capacity is online.  Overall, renewables in China currently account for a small portion of energy generation (approximately 2%). 

China does not have significant natural gas resources, and as a result has prioritized coal as its primary fuel, including so-called clean coal plants.  The country’s leaders seem to have seen the writing on the wall where energy security is concerned. China is aggressively pursuing wind, even though two-thirds of its current wind installations are not connected to the grid for fear of the instabilities wind can cause on the system.

In China, the opportunity for storage might not only be a wind integration benefit, but also a transmission benefit – which is typically easier to attach a dollar value to. It will be interesting to see which benefits China decides are most valuable – and in turn which technologies end up as winners in the Chinese market as a result.

With $500 million in state funding, this isn’t exactly a commercial project. But it is the next step beyond the energy storage technology being tested at the China Electric Power Institute (CEPRI), which is coincidentally a subsidiary of State Grid.  CEPRI has experimented with several different technologies and renewables.

It’s no big surprise that State Grid has chosen to install a 6 MW iron phosphate battery from a domestic manufacturer. What’s encouraging is that China is trying to understand storage technologies and their benefits.

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