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China Grid-Scale Energy Storage: Technologies & Markets, 2012-2016

Abstract

In 2012, China's electric grid will become the largest in the world in terms of both installed generation capacity and electricity produced. China also possesses the world's largest installed wind power base and the world's largest declared investment in renewable energy. These facts alone suggest that China is also the most attractive market for energy storage in the world, even though China currently has just 4% of the worldwide energy storage capacity.

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Whereas other markets have focused on power quality and ancillary services, China's grid energy storage market has developed with a focus on renewable energy integration, load-shifting and peak shaving. Azure International and GTM Research forecast that pumped hydro storage capacity will double or triple by 2016 to reach 40-60 GW, while other storage technologies will rise from currently insignificant levels to over 700 MW installed by 2016.

With strong government support and steadily improving technology, we anticipate the energy storage market will grow to a US$500 million per year market by 2016. In this 142-page report, we analyze the market's outlook with a realistic assessment of the policy, market and technical barriers that energy storage faces.

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Table of Contents

1. EXECUTIVE SUMMARY

  • 1.1 Overview
  • 1.2 Findings
  • 1.3 Electricity Market and Policy Context
  • 1.4 Energy Storage Technologies Overview
  • 1.5 Energy Storage Applications Overview
  • 1.6 Application Benefi ts and Example Implementations
  • 1.7 Industry Overview
  • 1.8 Discussion

2. ELECTRICITY MARKET AND POLICY CONTEXT

  • 2.1 Overview
  • 2.2 China's Unique Need for Storage
    • 2.2.1 Load Growth
    • 2.2.2 Changing Load
    • 2.2.3 Renewable Integration
    • 2.2.4 Infl exible Generation
    • 2.2.5 Rural Electrifi cation
  • 2.3 Power Market Context
    • 2.3.1 China's Generation Mix in Perspective
    • 2.3.2 Market Deregulation and Restructuring
    • 2.3.3 Inter-Provincial and Inter-Regional Power Exchanges
    • 2.3.4 Wholesale Energy Market
    • 2.3.5 Ancillary Services
    • 2.3.6 Payment for Services within the T&D System
    • 2.3.7 Compensation for Pumped Hydroelectric Storage
    • 2.3.8 Retail Electricity Rates
    • 2.3.9 The Evolution of China's Power Demand Structure
    • 2.3.10 Changing Structure of Generation
    • 2.3.11 Prospects for Further Power Market Reform
  • 2.4 Policy
    • 2.4.1 Renewable Energy Policy
    • 2.4.2 Policies to Directly Support Energy Storage
    • 2.4.3 Energy Storage Demonstration and R&D Projects
    • 2.4.4 Prospects for Energy Storage Policy

3. ENERGY STORAGE TECHNOLOGIES

  • 3.1 Technology Overview
  • 3.2 Chapter Scope
  • 3.3 Technologies
    • 3.3.1 Pumped Hydroelectric Energy Storage
    • 3.3.2 Compressed Air Energy Storage
    • 3.3.3 Flow Batteries
    • 3.3.4 Conventional Lead Acid Batteries
    • 3.3.5 Advanced Lead Acid Batteries
    • 3.3.6 Sodium Sulfur (NaS) Batteries
    • 3.3.7 Lithium-Ion Batteries
    • 3.3.8 High-Speed Flywheels
  • 3.4 Technology Comparisons
  • 3.5 Energy Storage Technology Tradeoff s
    • 3.5.1 Energy vs. Power Capacity
    • 3.5.2 Capital vs. Operating Cost
    • 3.5.3 Lifetime vs. Percentage of Battery Used
    • 3.5.4 Cost vs. Technology Track Record
  • 3.6 Technology Trajectory
  • 3.7 System-Level Competition
  • 3.8 Discussion

4. ENERGY STORAGE APPLICATIONS

  • 4.1 Overview
  • 4.2 Introduction
  • 4.3 Generation-Oriented Applications
    • 4.3.1 Bulk Electricity Time-Shifting
    • 4.3.2 System Capacity Payments
    • 4.3.3 Ancillary Services
  • 4.4 Transmission and Distribution Applications
    • 4.4.1 Transmission Support
    • 4.4.2 Transmission Congestion Relief
    • 4.4.3 Transmission and Distribution Upgrade Deferral
  • 4.5 Renewable Energy Integration
    • 4.5.1 Avoiding Renewable Energy Plant Curtailment
    • 4.5.2 Renewable Energy Time-Shift
    • 4.5.3 Renewable Distributed Generation Integration
  • 4.6 End-User Applications
    • 4.6.1 Retail TOU Energy Charge Management
    • 4.6.2 Retail Demand Charges
    • 4.6.3 Power Reliability (Avoided Power Outages)
    • 4.6.4 Power Quality (Avoiding Power Fluctuations)

5. APPLICATION BENEFITS AND EXAMPLE IMPLEMENTATIONS

  • 5.1 Overview
  • 5.2 Methodology
  • 5.3 Energy Storage Valuation Approaches
  • 5.4 Example Implementations
    • 5.4.1 Bulk Electricity Time-Shifting + Load Following + Capacity Payments + Black Start
    • 5.4.2 AGC Service From ES Co-Located With Generation
    • 5.4.3 Large-Scale Renewable Energy Integration
  • 5.5 Transmission &Distribution Upgrade Deferral
  • 5.6 Commercial and Industrial Energy Management
    • 5.6.1 Example Implementations
  • 5.7 Other Implementations
    • 5.7.1 Wind Solar and Energy Storage Generation Model
    • 5.7.2 Micro-Grid
    • 5.7.3 Rural Electrifi cation Through Distributed Generation and Energy Storage
    • 5.7.4 Combination EV Charging and Energy Storage Station

6. INDUSTRY DEVELOPMENT AND PROJECTIONS

  • 6.1 Overview
  • 6.2 Grid Energy Storage Industry Development in China
  • 6.3 Current Status of Grid Energy Storage Industry in China
    • 6.3.1 Market Competition and Openness
  • 6.4 Industry Distribution
    • 6.4.1 Technology Distribution
    • 6.4.2 Geographical Distribution
    • 6.4.3 Ownership Breakdown
  • 6.5 Installed Base
    • 6.5.1 Technology Breakdown
    • 6.5.2 Targeted Applications
    • 6.5.3 Selected Sub-Market Details
  • 6.6 Market Size Projections
  • 6.7 Key Technology Segments
    • 6.7.1 Lithium-Ion Batteries
    • 6.7.2 Vanadium Redox Flow Batteries
    • 6.7.3 Lead Acid Batteries
  • 6.8 Summary

7. APPENDIX: COMPANY PROFILES

  • 7.1 Amperex Technology Limited (ATL)
  • 7.2 Anhui Meineng
  • 7.3 Boston-Power (China)
  • 7.4 BYD
  • 7.5 Chengde Wanlitong
  • 7.6 China Aviation Lithium Battery (CALB)
  • 7.7 China BAK Battery
  • 7.8 CITIC Guoan Mengguli (MGL)
  • 7.9 Dalian Rongke Power
  • 7.10 Desay Battery
  • 7.11 Sail Battery (Fengfan Co., Ltd)
  • 7.12 Golden Energy Fuel Cell
  • 7.13 Horizon Batteries China (Horizon Haode)
  • 7.14 Tianjin Lishen
  • 7.15 Prudent Energy
  • 7.16 RealForce Enterprises Co., Ltd (RFE)
  • 7.17 Huanyu Power Source Company
  • 7.18 Wanxiang Group
  • 7.19 Yingli Solar
  • 7.20 Zhuhai Yintong Energy

LIST OF FIGURES

  • Figure 1-1: Worldwide Energy Storage Market Share (MW Installed)
  • Figure 1-2: Beijing Corona Energy Storage Project in Yushu, Qinghai
  • Figure 1-3: China Overall Installed Capacity (MW), 2011-2016
  • Figure 1-4: Selected Energy Storage Benefi ts for China, 2012
  • Figure 2-1: Investment in New Generation versus Electricity Consumption (2008-2011)
  • Figure 2-2: International Comparison - Power Consumption per Capita
  • Figure 2-3: China's Grid-Connected Wind Power Capacity, 2001-2011
  • Figure 2-4: Image of 1000 MW Huaneng Qinbei Ultra-Supercritical Power Plant
  • Figure 2-5: PV and Energy Storage System Installed in Hunan Province
  • Figure 2-6: China Installed Capacity by Generation Type, 2010
  • Figure 2-7: U.S. Installed Capacity by Generation Type, 2010
  • Figure 2-8: China Electricity Production by Generation Type, 2010
  • Figure 2-9: U.S. Electricity Production by Generation Type, 2010
  • Figure 2-10: Division of State Power Grid Assets
  • Figure 2-11: Installed Generation Capacity by Grid Region, 2010
  • Figure 2-12: 2010 Regional Grid Electricity Mix (Installed Capacity in GW)
  • Figure 2-13: Oversight Structure of China's Electric Power Industry
  • Figure 2-14: China Regional Power Grid Clusters
  • Figure 2-15: Wholesale Electricity Prices by Region 2010
  • Figure 2-16: Energy Saving Dispatch Rule Priority Ranking
  • Figure 2-17: Transmission and Distribution Prices by Region, 2010
  • Figure 2-18: Fixed T&D Price for Direct Bidding Pilot Program
  • Figure 2-19: Retail Electricity Rates in Beijing (for 10-kV level)
  • Figure 2-20: Average Retail Electricity Rates by Region, 2010
  • Figure 2-21: Load Growth Comparison by Load Type, 2005-2011
  • Figure 2-22: Projected Electricity Consumption Growth by Load Type, 2011-2020
  • Figure 2-23: China-U.S. Load Comparison for 2010
  • Figure 2-24: National Policies Related to Energy Storage
  • Figure 2-25: Important Provincial and City-Level Policies
  • Figure 3-1: Diagram of Pumped Hydroelectric Plant
  • Figure 3-2: Conventional CAES Plant Schematic based on McIntosh Plant
  • Figure 3-3: Diagram of Flow Battery System
  • Figure 3-4: Diagram of Lead Acid Battery System
  • Figure 3-5: Eff ect of Temperature on the Expected Life of Pb-Acid Batteries
  • Figure 3-6: Ultrabattery and Asymmetric Lead-carbon Capacitor Diagrams
  • Figure 3-7: NaS Cell and Module Schematic
  • Figure 3-8: 20 MW Li-ion Energy Storage Plant from Zhuhai Yintong
  • Figure 3-9: Diagram of Beacon Power 4th Generation Flywheel Energy Storage System
  • Figure 3-10: Technology Characterizations of Grid Applications
  • Figure 3-11: Zhangbei Wind Solar and Energy Storage Demonstration Project Costs
  • Figure 3-12: Cost Estimates Given by China Guodian, 2011
  • Figure 3-13: Energy Storage Costs based on U.S. EPRI Estimates
  • Figure 3-14: Expected Lifecycles based on State of Charge for Xtreme Power Cell
  • Figure 4-1: Application Requirements by Size and Discharge Capacity
  • Figure 4-2: Application Requirements by Discharge Capacity and Grid Location
  • Figure 4-3: Stakeholder Breakdown for China Electric Power Grid
  • Figure 4-4: Power Producer Market Share, 2010
  • Figure 4-5: Energy Storage Applications by Grid Location
  • Figure 4-6: Load Leveling Versus Peak Shaving
  • Figure 4-7: Load-Following Capacity and Load-Following Payments
  • Figure 4-8: Frequency Regulation Diagram
  • Figure 4-9: Load-following and Regulation Technology Requirements Comparison
  • Figure 4-10: Transmission and Distribution Deferral Diagram
  • Figure 4-11: Anhui TOU Pricing for Industrial 10kV Load
  • Figure 4-12: Illustration of Demand Reduction for Commercial Cooling Load
  • Figure 5-1: Selected Energy Storage Benefi ts for China 2012
  • Figure 5-2: Energy Storage Benefi t Estimates for the U.S. Market
  • Figure 5-3: Comparison of Benefi ts for China vs. U.S. - End-User Applications
  • Figure 5-4: Comparison of Benefi ts for China vs. U.S. - Ancillary Services
  • Figure 5-5: Comparison of Benefi ts for China vs. U.S. - T&D Upgrade Deferral
  • Figure 5-6: Comparison of Benefi ts for China vs. U.S. - Bulk Electricity Applications
  • Figure 5-7: Relationship between Benefi t Stacking and Operational Requirements
  • Figure 5-8: Combined Implementation for Generation Sited, Energy-oriented System
  • Figure 5-9: Combined Implementation for Generation Sited, Energy-oriented System
  • Figure 5-10: AGC Service Implementation
  • Figure 5-11: AGC Service Implementation
  • Figure 5-12: Renewable Integration Implementation: Avoiding Wind Curtailment
  • Figure 5-13: Renewable Integration Implementation: Avoiding Wind Curtailment
  • Figure 5-14: Diminishing Benefi ts of Multi-year T&D Deferral
  • Figure 5-15: T&D Upgrade Deferral Implementation
  • Figure 5-16: T&D Upgrade Deferral Implementation Benefi ts
  • Figure 5-17: Commercial and Industrial Energy Management Implementation
  • Figure 5-18: Commercial and Industrial Energy Management Benefi ts
  • Figure 6-1: Energy Storage System Value Chain
  • Figure 6-2: Number of Manufacturers Targeting Each Technology Type
  • Figure 6-3: Installed Capacity by Technology Type
  • Figure 6-4: Number of Manufacturers by Location of Headquarters
  • Figure 6-5: Ownership Breakdown of Energy Storage Manufacturers
  • Figure 6-6: Worldwide Energy Storage Market Share(MW Installed)
  • Figure 6-7: China 2011 Installed Capacity by Technology Type
  • Figure 6-8: Installed Capacity (MW) BY Primary Application
  • Figure 6-9: Pumped Hydroelectric Storage Installed Capacity 1990-2020
  • Figure 6-10: Centralized, Power-Oriented Energy Storage Installed Capacity (MW) 2011-2016
  • Figure 6-11: Centralized, Energy-oriented Energy Storage Installed Capacity (MW) 2011-2016
  • Figure 6-12: Distributed, Energy-oriented Energy Storage Installed Capacity (MW) 2011-2016
  • Figure 6-13: China Overall Installed Capacity (MW) 2011-2016
  • Figure 6-14: Annual Energy Storage System Sales (MW) 2011-2016
  • Figure 6-15: Annual Energy Storage System Sales (million US$/yr) 2011-2016
  • Figure 6-16: Installed Lithium Ion Projects by Manufacturer (2012E)
  • Figure 6-17: Installed Flow Battery Projects by Manufacturer (2012E)
  • Figure 7-1: Overview of Companies Profi led
  • Figure 7-2: Companies by Technology Type and Development Stage
  • Figure 7-3: ATL Energy Storage Projects
  • Figure 7-4: BYD Energy Storage Projects
  • Figure 7-5: CALB Energy Storage Projects
  • Figure 7-6: Dalian Rongke Energy Storage Projects
  • Figure 7-7: Prudent Energy Projects
  • Figure 7-8: Wanxiang Energy Storage Projects
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