New energy storage report: green power + energy storage, the ultimate dream

1 Energy storage: It is a key part of the construction of new power systems
Since 2020, first, the price of "traditional power generation energy" represented by global coal and natural gas has increased sharply, and second, the proportion of "unstable power generation" such as wind power and photovoltaic has increased, and the imbalance between global power supply and power demand has been accompanied by problems.

This imbalance is reflected in three aspects:

1) The imbalance in "quantity", that is, the problem that the new energy generation and electricity consumption curves cannot match in real time. Subject to the resource endowment itself, natural resources such as scenery are unevenly distributed in a day, and the peak of power generation is different from the peak of electricity consumption.

2) Imbalance in "quality", that is, instantaneous fluctuations in power generation, intermittency and mismatch in grid regulation capacity. New energy power generation forms such as wind power and photovoltaic have aggravated the intraday volatility, instantaneous fluctuation and intermittency of power generation, and put forward higher requirements for the frequency regulation capacity and safety and stability of the power grid.

3) The imbalance in "price", that is, there is a certain lag between benchmark electricity prices and medium- and long-term trading electricity prices. On the one hand, the high cost of coal used by traditional thermal power enterprises cannot be achieved through the immediate transmission of electricity prices on the income side, and passively "cut off electricity"; On the other hand, the price of new energy electricity cannot fully reflect the real-time power supply and demand structure.

Energy storage systems provide conditions to solve the above three imbalances.

In terms of the amount of electricity used, energy storage realizes the process of storing energy when it is not needed and releasing it when needed. Energy storage technology is changing the mode in which all aspects of electricity production, transmission and use must be completed simultaneously. Just like the large-capacity version of the "power bank", it can be used as a load charge when the electricity consumption is low, and it can be used as a power source to release electric energy when the electricity consumption is peaking.

In terms of power quality, energy storage can achieve rapid, stable and accurate charge and discharge regulation, and can provide various services such as peak shaving, frequency regulation, backup, and demand response for the power grid, which is an important part of building an elastic power system construction and realizing more friendly interaction between "power grid and energy storage".

In terms of electricity prices, as energy storage projects gradually participate in electricity spot market transactions, in the future, in addition to participating in auxiliary services such as peak shaving and frequency regulation for revenue, they can also use the purchase and discharge of electricity at different periods of negative electricity prices and high electricity prices to obtain electricity price difference revenue. Solve the problem of large peak-valley price difference, reduce the cost of electricity charges on the user side, and promote the further development of electricity spot trading marketization.

As an important part of the construction of a new power system, energy storage is an important link of "source-grid-load storage". Energy storage connects energy production and energy consumption on the other, covering all aspects of power production and distribution, realizing service upgrades and service value-added for traditional power grid systems, and providing important supplements to the traditional power production-transmission-consumption system with "source grid load" as the main body. In the power system where the proportion of new energy is gradually increasing, it has played an important role in further optimizing the allocation of system resources.

2 Energy storage technology: multi-technical route coordination to accelerate application landing
During the 14th Five-Year Plan period, higher requirements were put forward for the construction of new energy technologies, new models and new formats. National and local departments have successively issued a number of energy storage industry development support policies to vigorously promote the development of the energy storage industry, focusing on a variety of technology promotion, energy storage project landing, electricity price mechanism improvement and other major areas.

According to the "14th Five-Year Plan" for scientific and technological innovation in the energy field, by 2025, mainstream energy storage technology will generally reach the world's advanced level, and electrochemical energy storage and compressed air energy storage technologies will enter the commercial demonstration stage. China's new energy storage construction mainly covers two major goals:

First, for application scenarios such as grid peak shaving and valley filling, renewable energy grid integration, etc., large-capacity, long-term energy storage devices and system integration, that is, energy-based and capacity-based energy storage. Including lithium-ion batteries, lead-carbon batteries, high-power flow batteries, sodium-ion batteries, large-scale compressed air, mechanical energy storage, heat and cold storage, hydrogen storage, etc.

The second is to carry out research on long-life, high-power energy storage devices and system integration, that is, power type and backup energy storage, for application scenarios such as enhancing grid frequency regulation, smoothing intermittent renewable energy power fluctuations, and capacity backup. Including electromagnetic energy storage such as superconducting and dielectric capacitors, electrochemical supercapacitors, high-rate lithium-ion batteries, flywheel energy storage, etc.

Energy storage facilities of different technology categories have different application scenarios. For example, capacity energy products such as lithium batteries and pumped storage are suitable for peak regulation scenarios, and power types such as flywheel energy storage are suitable for frequency regulation scenarios. Due to the different charge-discharge ratios and terminal requirements, the versatility between various types of technology energy storage systems is limited, and it is necessary and urgent to develop diversified energy storage routes.

 

From the perspective of technical principles, the current energy storage technology path mainly includes several key categories such as physical mechanical energy storage, electrochemical energy storage, electrical energy storage, and thermal energy storage. Physical and mechanical energy storage covers pumped storage, compressed air energy storage and flywheel energy storage; Electrochemical energy storage is divided into lead-acid batteries, lithium-ion batteries, sodium-sulfur batteries and flow batteries according to the different materials of positive and negative electrodes, among which lithium-ion batteries are the current mainstream choice; Electrical energy storage includes superconducting energy storage and supercapacitor energy storage; Chemical energy storage mainly includes hydrogen energy storage from electrolysis of water, energy storage for synthetic natural gas, etc.; Thermal energy storage includes molten salt energy storage and cold storage.

Among many technologies, pumped storage in physical mechanical energy storage and lithium battery energy storage in electrochemical energy storage are the mainstream choices for the current development of energy storage. From the perspective of the mainstream degree of the market, first, in the stock installed capacity, pumped storage accounts for the highest proportion. According to the CNESA Global Energy Storage Database, in 2021, the total installed capacity of global energy storage was 205GW, and pumped storage accounted for 86%, reaching 177GW. Electrochemical energy storage accounted for 10% of the installed capacity, about 21GW. Second, in the new installation, electrochemical energy storage has the fastest increment. In 2021, 13GW of new energy storage capacity will be installed globally, pumped storage will account for 40%, 5.3GW will be added, and electrochemical energy storage will account for 57%, adding 7.5GW.

 

 

Pumped storage is the use of water as an energy storage medium to realize the storage and management of electric energy through the mutual conversion of electric energy and potential energy. When electricity consumption is low, excess electricity is used to pump water from low-elevation reservoirs to high-elevation reservoirs; When the power grid is peaked, water is released from high-elevation reservoirs and reflows back to low-elevation reservoirs to push hydroelectric generators to release electric energy. Specifically, pumped storage is the most mature and economical energy storage method at present, which is suitable for large-scale peak shaving and long-term frequency regulation. Pumped storage mainly revolves around power grid companies, which is subject to geographical constraints and long construction periods.

Electrochemical energy storage is divided into lithium-ion batteries, lead-acid batteries, sodium-sulfur batteries, flow batteries, etc. according to the different materials of positive and negative electrodes, lithium ion is the current mainstream route, sodium-ion batteries, all-vanadium flow batteries and other energy storage technology routes are also booming. Electrochemical energy storage has high energy conversion efficiency and fast response speed, which can effectively meet the peak regulation and frequency regulation needs of the power system, and the power and energy can be flexibly configured according to different application needs, almost not affected by environmental factors such as geographical location. In addition, vanadium battery electrolyte is safer, sodium battery sodium resource storage is rich, the future of multiple types of electrochemical energy storage technology will be coordinated development, CATL and other enterprises began to lead the layout in the field of new technology routes.

 

 

3 China's energy storage: breaking through the shortcomings of power generation and consumption in the new energy era

In the new power system, new energy storage can be deeply applied in various scenarios on the power generation side, power grid side, and user side.

 

3.1 Power-side energy storage: "clean power porter"

New energy wind power and photovoltaic power generation are rising, accounting for a high proportion of social electricity consumption. In 2021, the national photovoltaic power generation capacity will be 325.9 billion kWh, a year-on-year increase of 25.1%; The national wind power generation capacity was 652.6 billion kWh, a year-on-year increase of 40.5%. The cumulative power generation of wind power and photovoltaic totaled 978.5 billion kWh, a year-on-year increase of 35.0%, accounting for 11.7% of the total social electricity consumption, exceeding 10% for the first time.

But at the same time, the absolute amount of curtailed wind and photovoltaics increased significantly. In 2021, 20.61 billion kWh of wind power and 6.78 billion kWh of solar power were abandoned nationwide. The total amount of curtailed electricity was about 26.748 billion kWh, a year-on-year increase of about 22.7%. Tibet, Qinghai and other provinces have high curtailment rates, and the photovoltaic utilization rate is only 86.2% and 80.2%. In the future, as the power supply structure tilts towards wind and solar, the amount of new energy power generation will rise sharply, and the abandoned wind and abandoned solar power will maintain an upward trend in the future, and the problem of new energy generation consumption on the grid is still not to be underestimated, and it is necessary to actively use the energy storage system to solve the problem of curtailment.

On the power supply side, the energy storage system will be an important starting point for power supply peak shaving, peak shaving and valley filling, and become a "clean power porter". In the future, China's power supply structure will still be dominated by coal-fired power generation, and the "traditional + new energy" hybrid power generation mode will be parallel. In the trough of electricity consumption, coal-fired units can be flexibly adjusted, and the overall power generation can be reduced to near the minimum output limit. However, if the power generation supply at this time is still higher than the electricity demand, the traditional energy side cannot be further adjusted, and can only choose to abandon light and wind from the new energy side. After the addition of the energy storage system, flexible scheduling and source-grid-load-storage interaction are possible. During the peak hours of wind power and photovoltaics, the energy storage system "charges" to absorb new energy electricity and effectively reduce the curtailment rate; When there is no wind and no light, the energy storage system "discharges" to support the normal operation of the power system.

Energy storage is conducive to smoothing the output of renewable energy, reducing the abandonment of wind and light of new energy wind power and photovoltaics, and improving the level of grid-connected consumption of new energy electricity. The "Guiding Opinions on Accelerating the Development of New Energy Storage" proposes to "vigorously promote the construction of power-side energy storage projects", layout new energy power stations equipped with energy storage, ensure the efficient consumption of new energy, and provide capacity support and certain peak regulation capacity for the power system.

 

 

3.2 Grid-side energy storage: "safe, stable and guaranteed"

In traditional thermal power and hydropower systems, the generator is strongly coupled with the power system, which can provide system inertia and maintain a relatively stable frequency. In the wind power and photovoltaic power generation system, the new energy power is connected to the power grid through the power electronic controller equipment, firstly, the inertia of the system itself is weak, the frequency regulation ability is poor, and second, the new energy power generation itself has the characteristics of instantaneous fluctuations, intermittent, and unpredictable. When a large number of new energy power generation is connected to the grid, the fluctuation of the power grid will increase, and if the grid regulation capacity does not match, the frequency stability of the power grid will face challenges, and the security of the power grid will be impacted.

Compared with traditional frequency regulation, the energy storage system has strong climbing ability, fast response rate and adjustment rate, and high adjustment accuracy, which can effectively avoid problems such as adjustment delay, adjustment deviation, and adjustment reverse, and the comprehensive frequency regulation ability is better. The addition of new energy storage systems such as flywheel energy storage to the frequency regulation auxiliary market can effectively ensure the safe and stable operation of the power grid. The "Guiding Opinions on Accelerating the Development of New Energy Storage" proposes to "actively promote the rational layout of grid-side energy storage", and improve the flexible adjustment ability and safety and stability of the system after large-scale and high-proportion new energy and large-capacity DC access.

Energy storage frequency regulation, as an important part of the auxiliary services of the power grid, has a high degree of market-oriented transactions. Energy storage entities can implement grid frequency regulation instructions through market-oriented bidding, and the excellent frequency regulation performance determines the profitability of the project. The comprehensive frequency regulation capability of the energy storage system is mainly measured by the k value, which is mainly affected by the response speed (K1), regulation rate (K2) and adjustment accuracy (K3), of which the regulation rate (K2) is the most important index. Secondary frequency regulation is the main link of energy storage participating in frequency regulation at present, and the price mechanism is relatively mature. In the future, relevant entities will participate in a frequency regulation in the market, and relevant mechanisms will gradually land. In June 2022, the Implementation Rules for the Management of New Energy Storage Grid-Connected Operation and Ancillary Services in the Southern Region clarified the principle of "who provides, who benefits, who benefits, and who bears", and the compensation costs of power users participating in auxiliary services such as primary frequency regulation, secondary frequency regulation, and peak shaving shall be jointly shared by all grid-connected entities such as power generation enterprises and market-oriented power users. The Notice on the Implementation Rules for Shanxi Electric Power Primary Frequency Regulation Market Transaction (Trial) proposes to encourage new energy enterprises to purchase primary frequency regulation services from independent energy storage operators through bilateral negotiation transactions.

 

 

3.3 User-side energy storage: "multiple scenarios promote development"

Under the trend of energy transition, there are more new energy grid-connected terminals, the demand for terminal electricity is wider, and user demand will also upgrade from "using electricity" to "using electricity well". In the first half of 2022, the growth rate of production and sales of new energy vehicles continued to grow, with a market penetration rate of more than 20% and a market ownership of more than 10 million units. In the future, the market potential of diversified power demand side response such as industry and commerce, industrial parks, port shores, air conditioning, electric heating, electric vehicles, and charging piles is huge. In the future, the load structure of the new power system will be more diversified, the demand for intelligent power control and two-way interaction on the user side will be more in-depth, and it is inevitable for the user-side energy storage to lead the transformation of the power demand side.

European and American household storage scenarios drive new demand, and global user-side energy storage has great potential for development. Since 2020, global energy prices have soared, overseas inflation has been high, and electricity prices in Europe and the United States have increased significantly. In this context, the high cost of residential electricity has intensified the outbreak of overseas household energy storage demand. According to IHS Markit data, the installed capacity of household energy storage in Europe reached 1717MWh in 2021, a year-on-year increase of 60.2%. According to the American Clean Energy Association ACP data, the United States added 5GWh of battery energy storage in the first half of 2022, a year-on-year growth rate of more than 30%. Through the "photovoltaic + energy storage" model, household energy storage greatly saves the cost of electricity purchase and consumption of overseas households. Chinese suppliers occupy an important position in the core links of photovoltaic modules, inverters, battery cells and other core links in global household energy storage systems. From January to June 2022, the cumulative export value of solar cell modules was 22.3 billion US dollars, a year-on-year increase of 96%; inverter exports were US$3.1 billion, a year-on-year increase of 47%; Lithium battery exports increased by more than 75% year-on-year.

The integrated development of user-side energy storage in multiple scenarios covers various end users such as industrial parks, commercial centers, data centers, 5G communication base stations, charging facilities, distributed new energy, and microgrids. For example, in industrial and commercial scenarios, energy storage as a backup power source not only ensures the power supply under special circumstances, but also saves electricity costs for industrial and commercial enterprises. The National Energy Administration requires that "the total roof area of industrial and commercial plants can be installed with photovoltaic power generation ratio of not less than 30%", photovoltaic storage synergy to promote the basic balance of local energy production and energy load, photovoltaic storage integration is an important direction in the future.

The deepening development of user-side energy storage has spawned new technologies and new business models, such as virtual power plants. Virtual power plants can focus on user-side resources, rely on big data, cloud computing, artificial intelligence, blockchain and other technologies, and use communication, measurement, algorithm scheduling and other means to intelligently connect energy storage system resources such as residential users, industrial and commercial users, and distributed new energy facilities. Unified dispatch management, analysis, control and optimization of system operation, participation in power grid services to obtain application benefits, and finally achieve efficient utilization of power generation and electricity resources.

 

4 Future energy storage: development trend and prospects

1. Standardizing and improving the standards for promoting the development of the energy storage industry and creating a good development environment are the foundation for the long-term and healthy development of China's energy storage industry.

Deepen research and improve the corresponding industry standards to promote the development of energy storage, including product equipment technical quality standards, safety mandatory testing and certification system standards, planning design and scheduling operation standards, etc., and fully consider the collaborative integration of new energy storage in generation, transmission and distribution.

On the one hand, according to the needs of energy storage development and safe operation, improve industry access conditions and trading mechanism standards. Establish and improve the technical standard system of the whole industry chain of energy storage, and the safety standards and management systems for the manufacturing, construction, installation, and operation monitoring of energy storage equipment should be specifically targeted at different application scenarios, and strengthen the connection between energy storage applications and the relevant standards of the current energy and power system. In June 2022, the National Energy Administration's "Twenty-five Key Requirements for Preventing Power Production Accidents" proposed that medium and large chemical energy storage power stations should not use ternary lithium batteries and sodium-sulfur batteries, and should not use echelon-utilization power batteries.

On the other hand, standardize the operation standards of multi-type battery energy storage power station big data centers, and build battery traceability mechanisms, big data remote control and intelligent operation and maintenance systems. For energy storage batteries, especially echelon utilization energy storage batteries, the establishment of a battery consistency management and traceability system, the acquisition of safety assessment reports issued by corresponding qualification institutions, and the establishment of an online monitoring platform to monitor battery performance parameters in real time, regular maintenance and safety assessment are an important part of ensuring the safety and reliability of energy storage configuration.

Establish a carbon footprint that can be traced and queried throughout the life cycle, and promote the export of energy storage batteries. From upstream material manufacturing, transportation to the full life cycle use and decommissioning of energy storage batteries, focusing on controlling carbon emissions, which can effectively meet the needs of overseas markets with strict carbon emission policies, the carbon footprint certification system of the energy storage battery industry chain is an important indicator to measure international competitiveness.

2. Exploring new business models of energy storage, such as shared energy storage, cloud energy storage, and energy storage aggregation, is a key innovation to accelerate the pace of marketization in the future.

In terms of operation mode, in addition to self-construction and purchase, new energy power stations can also be equipped with energy storage in the form of leasing, giving play to the sharing role of energy storage "one station with multiple uses". Through the construction of a shared energy storage trading platform and operation monitoring system, and the reasonable distribution of income through market-oriented methods, new energy power stations can reduce the initial capital expenditure, and investors can obtain later operating lease fees.

In terms of investment entities, attract a variety of entities to enter, carry out the exploration of new models, and accelerate the progress of marketization. For example, power generation enterprises and energy storage operators can jointly invest. In this way, the energy storage originally built by the new energy power station can be transferred to the centralized construction of social capital.

On the user demand side, explore new power information management modes such as virtual power plants, and use digital technology to carry out platform aggregation and utilization of distributed energy storage facilities. For example, enterprise users and integrated energy service providers can independently build user-side energy storage according to user load characteristics; Third-party virtual power plant operators can aggregate large-scale but scattered small and micro entities to achieve demand-side response, actively cut peaks and fill valleys, optimize regional power grid loads, and realize two-way interaction between source and load.

3. The development of energy storage technology routes with high resource self-sufficiency rates, such as sodium-ion batteries, all-vanadium redox flow batteries, hydrogen energy storage, etc., is an important part of strengthening China's energy security and strengthening the control ability of the whole energy storage industry chain.

At present, China has built an energy storage industry chain with pumped storage and lithium batteries as the main body, but the scarcity of nickel and cobalt resources in lithium batteries and the high degree of external dependence will become potential risk factors for continuing to choose the development path of energy storage dominated by lithium batteries. Therefore, the development of diversified energy storage technology routes with high resource self-sufficiency rate is an inevitable choice in the future.

The diversified technical route for the development of energy storage batteries should take into account multiple levels such as resource availability, cost control and market-oriented commercial processes. First, we should pay attention to resource availability, sodium-ion batteries, magnesium-ion batteries, all-vanadium flow batteries are rich in raw material resources, of which, China's magnesium, vanadium resources are rich, magnesium production accounts for more than 70% of the world, vanadium production accounts for up to 66% of the world. Hydrogen energy storage can produce hydrogen by electrolysis using excess electricity and use it to generate electricity, and the raw materials are readily available and can be recycled indefinitely. The resource end is guaranteed, which can effectively disperse the dependence of the current industry on lithium, nickel, cobalt and other resources. The second is to break through the shortcomings of multi-battery technology in the market-oriented commercial promotion level, such as finding sodium-ion battery anode materials that take into account both economy and safety; It effectively solves the problems of voltage hysteresis and passivation of cathode materials in magnesium-based batteries, making them chemically more stable and having higher safety; Effectively solve the problem of hydrogen energy storage losing about 60% of the initial electric energy in the energy storage cycle, and improve the safety and storage efficiency of hydrogen storage. It can not only realize the development of energy storage technology with high resource self-sufficiency rate, but also achieve breakthroughs in key technical links and promote large-scale commercialization.

Focus on supporting the development of energy storage technology with high resource self-sufficiency rate, increase resource exploration, and mobilize production enterprises, scientific research institutions and other entities to participate in development and commercialization. Based on resource endowments, improve the ability of independent supply of resources, promote the development of relevant technologies through policy preferences and investment support, and help energy security and energy transformation go hand in hand.

Dig deep into key energy storage technologies for system integration. Deepen the collaborative innovation of production, education, research and application, carry out demonstration applications, and focus on promoting large-capacity, long-term energy storage, core technology and equipment research and development and system integration, and technical research and protection of energy storage.

 

4. Deepening the development of market-oriented electricity pricing mechanisms and further improving electricity spot trading are effective guarantees for adding diversified auxiliary varieties and accelerating the entry of multiple energy storage subjects.

Due to its real-time trading and real-time settlement characteristics, electricity spot trading can better reflect market supply and demand and costs, and better discover prices. Improve the peak-valley electricity price policy, implement time-of-use electricity prices and peak electricity prices, promote electricity spot trading, effectively use peak-valley price differences, and create greater market space for the development of user-side energy storage. On the one hand, spot trading of electricity promotes the consumption of new energy generation by energy storage entities, and on the other hand, it opens up space for the profitability of energy storage projects by effectively using the market peak-valley price difference.

Improve the market mechanism for energy storage entities to participate in power auxiliary services, and allow new energy storage to be registered and traded as market entities. Establish a power price mechanism on the power grid side and user side, and on the grid side, formulate the verification price range of energy storage charging electricity prices on the grid side, and establish a capacity electricity price mechanism for independent energy storage power stations on the power grid side. Promote new and diversified energy storage varieties such as fast frequency regulation, climbing, inertia support, and standby to participate in electricity market transactions as market entities. On the user side, establish a new sharing mechanism for users with adjustable load participation in the electricity market, support the participation of user-side energy storage resources in power system regulation services, clarify the scope of service compensation and shared responsibility, and cultivate more qualified participants in the electricity spot market.