The new energy storage technology will profoundly change the structure of the future power system and the pattern of electricity production and consumption.
With the booming development of the new energy industry, the energy storage industry has become one of the hot topics of attention this year.
Recently, the China Energy Research Association and the Natural Resources Conservation Association (NRDC) held a series of "New Power System Salon" events in Beijing. Industry experts discussed the development prospects of the energy storage industry, as well as the opportunities and constraints it currently faces.
Experts attending the meeting pointed out that a large proportion of renewable energy will be integrated into the power system in the future, which has become a trend. The development of energy storage will be an important support for maintaining the security and stability of the entire power system, which also brings huge opportunities for the development of the energy storage industry.
At the same time, the energy storage industry still faces problems such as cost disturbances, profitability difficulties, and technological constraints. In addition to conventional pumped storage and new energy storage technologies, vehicle network collaboration, linkage with underground gas storage, as well as biomass and waste energy storage, are also industry directions worth paying attention to.
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The energy storage industry has broad prospects
In recent years, with the large-scale development of renewable energy such as wind power and photovoltaic, coupled with the requirements of the "dual carbon" transformation, more and more renewable energy has been connected to the power grid, and the power system is facing increasing consumption pressure. How to maintain the safe and stable operation of the power system has become a challenge that needs to be solved.
In this process, the development of energy storage is highly anticipated. In March of this year, the National Development and Reform Commission and the National Energy Administration issued the "14th Five Year Plan for Modern Energy System", which proposed to accelerate the construction of pumped storage power stations and strive to achieve an installed capacity of over 62 million kilowatts of pumped storage and about 60 million kilowatts of installed capacity under construction by 2025.
The plan also points out the need to accelerate the large-scale application of new energy storage technologies, vigorously promote the development of power side energy storage, reasonably allocate energy storage scale, optimize the layout of grid side energy storage, leverage energy storage to absorb new energy, reduce peak load and fill valley, enhance grid stability and emergency power supply, and actively support the diversified development of user side energy storage.
According to the prediction of the National Energy Administration, the installed capacity of new energy storage will exceed 30 million kilowatts in 2025, with an average annual growth rate of over 50%. The relevant person in charge of the National Energy Administration stated that the new energy storage technology in China will profoundly change the structure of the future power system and the pattern of power production and consumption.
Lin Weibin, Director of the Energy Policy Research Center of the China Energy Research Association, stated at the seminar that according to the "three step" construction, it is expected that the proportion of wind and solar new energy power generation to total power generation will exceed 20% by 2030, reach around 35% by 2040, and surpass coal power as the largest main power source by 2040. To achieve an increase in the proportion from 12% now to over 20%, 35%, and even in the future, the proportion of wind and solar new energy generation will reach around 60% in a carbon neutral scenario, one of the very important supporting conditions is to rely on the development of energy storage.
Zhang Yunfei is the director of the Planning and Evaluation Center of the Pumped Storage Technology Research Institute of State Grid New Energy Holdings Co., Ltd. At this event, he stated that the new power system is a systematic engineering project that needs to handle the orderly exit of thermal power units, the orderly infiltration of renewable energy such as wind and solar, and the reasonable allocation of flexible resources.
Zhang Yunfei pointed out that China has set a goal of achieving a total installed capacity of over 1.2 billion kilowatts of wind and solar power by 2030. Based on a 15% configuration of energy storage scale, it is estimated that at least 180 million kilowatts of energy storage are needed. However, the current development scale of new energy storage and pumped storage is relatively lagging, and it is necessary to promote the coordinated development of pumped storage and new energy storage.
In addition, the diversified development of pumped storage energy should also be valued, and the development of small and medium-sized pumped storage energy should be strengthened, hybrid pumped storage energy should be developed according to local conditions, and the development and application of seawater pumped storage energy should be explored.
According to the National Development and Reform Commission in June this year, as of the end of 2021, the installed capacity of pumped storage in China has reached 36.39 million kilowatts, an increase of nearly 80% compared to 2012.
Bai Jianhua, Vice President of Beijing Zhizhong Energy Internet Research Institute, believes that the integration of a large number of wind and solar power resources that rely on the weather on the power supply side of the power system, as well as the substitution of electricity by the demand side terminal departments, have greatly changed the load curve of the power system. It is necessary to comprehensively consider the characteristics of total electricity demand, characteristics, and regional distribution, and adjust and analyze the load curve adaptively to determine the required energy storage scale.
According to Bai Jianhua's rough estimate, by 2060, the energy storage required by the power system will be around 1 billion kilowatts; Among them, pumped storage, new energy storage, and electric vehicle V2G (vehicle network collaboration) will play important roles. In terms of energy storage development, the combination development of hydropower, pumped storage, and wind and solar power, the development of two-part electricity prices, and the safety, lifespan, and cost issues of new energy storage are all worthy of special attention.
02 Industry Challenges and Constraints Urgent to Break Through
Li Zhen, Deputy Secretary General of the Zhongguancun Energy Storage Industry Technology Alliance, stated that in 2021, the Chinese energy storage market will enter a truly large-scale development stage. Among them, the cumulative installed capacity of the new energy storage market reached 5.73 million kilowatts, and the newly added installed capacity exceeded 2 million kilowatts, a year-on-year increase of 74.5%.
Li Zhen stated that the development of the new energy storage industry still faces two challenges. Firstly, supply chain price fluctuations are transmitted to the downstream energy storage market: since 2021, under the influence of the rise in upstream raw material prices, the cost of energy storage batteries has increased by over 20%; This has led to a corresponding increase in initial investment for many projects, a decrease in project returns, and many projects no longer have commercial feasibility, resulting in the suspension of execution for many energy storage projects that have already been tendered.
Secondly, the current domestic new energy storage market has not yet formed a stable revenue model. Li Zhen stated that the development of new energy storage is greatly influenced by policies, with unclear business models and difficult profitability. Currently, countries and regions such as the United States, Australia, and the European Union have regarded the development of new energy storage as one of the new driving forces for economic development, providing various support policies in terms of research and development funds, market mechanisms, electricity price subsidies, and tax refunds.
At the meeting, experts pointed out that in addition to pumped storage and new energy storage, urban electric vehicle energy storage clusters, underground gas storage depots, pipeline networks, and peak shaving power plants mixed with natural gas and green hydrogen, as well as energy storage for biomass and waste treatment, are also worthy of attention in the development direction of energy storage systems.
Since the beginning of this year, the emergence of the energy storage sector in the stock market reflects the active level of development of energy storage enterprises. Wang Ziqiang, a senior researcher at Wanli Think Tank, stated that from the perspective of the capital market, it is necessary to use market means to develop energy storage, especially new energy storage, in order to generate economic benefits. But in the process of development, we need to focus on two issues.
Wang Ziqiang stated that first of all, in order to cooperate with the development of new energy, it is necessary to develop supporting energy storage according to local conditions to avoid blind investment in new infrastructure construction, resulting in unnecessary waste; Secondly, to avoid excessive protection of energy storage technology, it is necessary to enhance its market competitiveness through market-oriented means.
Wang Wanxing, Senior Advisor of NRDC Clean Power, believes that energy storage is an important component of meeting the flexibility needs of the new power system. In order to support the healthy and orderly development of energy storage, it is necessary to fully leverage the roles of the government and the market: by introducing policies, we can mobilize the positive energy storage potential of social development; Strengthen government planning and unify the planning of new energy installation scale, transmission projects, and energy storage facility construction from a regional perspective.
Wang Wanxing pointed out that the healthy development of energy storage still requires reasonable market mechanisms and feasible business models. Although the cost of new energy storage technologies has decreased significantly, from the perspective of economy and safety, energy storage has not yet reached a stage of fair competition with other technologies.