Energy Storage is the Keystone and Landmark for Building the New Type Power System: An Interview with Wang Zhixuan

June 2021 /CEC/ - Wang Zhixuan, the former Vice President of CEC talks to China Electric Power (CEP) about his approach of the role the energy storage may play for the new type power system in China.

The energy storage industry has been developed for years in China. Is it already the time for its booming? 

Since October 2017 publication of the government’s‘Guiding Opinion on Promoting the Development of the Energy Storage Technology and Industry’document, the energy storage industry has become a new hot pot in the energy and power field and we can also see a lot of ups and downs of the whole industry accordingly. As China aims to reach the goal of hitting peak emissions by 2030 and achieving carbon neutrality by 2060, thus the hot words such as “trillion-dollar energy storage market” and “carbon neutrality with great investment potential” are frequently seen in the local media.

Recently, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly solicited public opinion on the‘Guiding Opinion on Accelerating he Development of the New Type Energy Storage Industry and Technology (Draft)’document. The mentioned document said, "by 2025, it is planned to develop the new type energy storage market from the initial stage to a major one and to encourage the enterprises and organizations from the industry to improve their innovative capabilities of the new type energy storage technology. Moreover, the installed capacity of the new type energy storage facilities is going to reach more than 30GW" according to the document. This guiding opinion ignites once again people’s enthusiasm to be involved into the energy storage industry.

To build the new type power system in China, the energy storage plays a very important role and therefore receives a high attention from the market. But we all know that every industry has its own developing progress. While we accelerate the development of the energy storage industry, we also need to consider the possible problems in a careful and rational way, namely the economic performance, safety, scenarios, technologies and scale advantages. 

To achieve the nation‘s “30/60” carbon peak and carbon neutrality goal, why is it important to develop the energy storage industry? 

The main task of China’s energy transition is to accelerate the transformation from the fossil fuel-based energy system to the renewable-based one. The developed countries' energy transition is progressive and following the naturally formed path (from coal to oil, from oil to gas and then to the renewable energy), while China will  skip the mentioned path and switch to the renewable-based energy system directly. However, the rapid energy transition has caused problems to the power system like the lacking of the flexibility adjustment resources. If our country would like to achieve the “30/60” goal in only half the time the developed countries spent, the energy storage is a key to unlocking the decarbonisation and economic growth potential of the energy transition.

Over the past few decades, the quickly increased coverage and the falling costs of the wind power and the photovoltaic power were beyond the expectation and exceed the construction speed of the power grid network and the flexible power system resources. In the future, the energy storage will be a key component of the new type power system construction and plays an important role to meet the new safety, low-carbon and economic performance requirements of the power industry. 

What is the key point affecting the development of the energy storage industry? Is China’s energy storage industry ready for the commercialization? 

During the history of more than 100 years, the power industry faced always the unsolved hardship of the high-power and high-capacity power storage technologies lasted for almost a century. And the mentioned technical problem is the key point affecting the development and the commercialization of the energy storage industry. But some general techniques of the energy storage were renovated fast in recent years. 

First of all, to strength the security management and supervision of the energy storage facilities. According to the recent reports in China and abroad, more than 30 fire accidents happened to the energy storage power stations and it shows the specialty and complexity of the energy storage security management and supervision. In recent years, the rapid developed electrochemical energy storage power stations accelerate the widespread application of the battery energy storage system with lithium-ion batteries. However, on one hand the present policies, regulations and technical standards for energy storage security management and supervision are not mature, and in the other hand that the check and the certification systems of the energy storage are also not established, which may cause the problems for the operation of the energy storage power stations. 

Secondly, to strengthen the energy storage standard setting. Currently, a standard system has been initially established in the field of electrochemical energy storage. On the one side, due the rapid development and widespread application of the energy storage technology, some of the conditions of the standard urgently need to be refined. And the key technical standards including the construction acceptance, the inspection and maintenance, and the security management are still not comprehensive. On the other sides, there are still the existed cases of non-compliance with standards, lax implementation of the standard, low down the security standard for reducing the costs. 

Thirdly, the energy storage industry faces great challenge for its commercialization. China’s energy storage market is lack of clear and quantifiable pricing system and market mechanism. The role of energy storage is reflected in the overall power system, serving the grid, power generation, and users. It is difficult for anyone of the mentioned parties to invest the new energy storage power station alone, as it is difficult to cover the costs only with the revenue from the generation price margin. Moreover, the ancillary service in power market and the spot market are still at the initial stage for the energy storage industry to be involved. There are not so many sustainable business models for the energy storage industry, however, the energy storage service still has some way to realize "independent market entitles" participation in the market transaction. The application mode of combined frequency modulation of thermal power and energy storage is obviously restricted by geographical conditions and market capacity. 

Do you have any suggestions on our country's energy storage industry development? 

Regarding to the security management and supervision, my advice is to pay more attention on the electrochemical energy storage power stations. To enhance the supervision and inspection of the industry and project quality and improve the regulations of the construction, acceptance, operation, maintenance and safe exit. 

In terms of standard specifications, to speed up the review of existing energy storage standards, to follow up the development of industrial technology and to carry out the formulation and revision of the important standards such as energy storage power station construction, key equipment technical requirements, testing, and safety in a timely manner, and to promote the implementation of the standards. 

As of the commercialization, to recommend the government to support on the subsidies and specific policies according to the different application scenarios and different roles played by the energy storage on the power generation, grid and user sides.

For the power supply side, to accelerate the construction of the power spot market and the ancillary services in power market. Then use the market mechanisms to reflect the reasonable value of electric energy and various auxiliary services. Innovate new energy distribution and construction forms of the energy storage power stations and build the shared energy storage power stations according to the local conditions.

For the grid side, to ensure that the power grid energy storage be constructed as a public infrastructure, with reference to water pumping energy storage planning and construction model, and compile specific energy storage planning, finally conduct the implementation after the approval of the government. 

For user side, to build the user side energy storage systems in grid areas with high power supply pressure and much difference between peak and valley load of electric power. To accelerate the energy storage application on the pilot distribution projects. Through optimal allocation of the energy storage and clean energy, distributed energy and other resources, we will improve the interaction between electric vehicles and power grids, and integrate energy storage into a wider range of user-side power conditioning resource allocation to meet different market demands.