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Storage Market Trends

China stepping up deployment of front-of-the-meter storage with clear policy

May 20, 2021 ESS InfoLink

CN TW EN

Energy storage developments 

As shown in the provincial policy chart compiled by ESS InfoLink, China’s existing energy storage policies are less focused on end users. Unlike Germany or other European countries where energy storage markets have been well developed, China is in the early deployment stage. Therefore, the country prioritizes wind and PV curtailments issues and challenges in connecting renewables to the grid over energy consumers.  

Subsidies for frequency regulation and peak shaving are regulated. Generally, storage systems with a capacity over 10 MW are eligible for compensation, which provides RMB 0-15/MW for frequency regulation and RMB 0.5/kWh for peak shaving. The current model in which compensation are calculated does not offer high profitability and can be regarded as a demonstration policy.  

210601_EN_1_Policy

Percentage of mandatory energy storage deployment in power stations across provinces 

China’s policies indicate its increasing focuses on the development of energy storage. Presently, in addition to the central government’s supports, eleven provinces have promulgated policies related to mandatory energy storage applications. The provincial governments set specific energy storage deployment percentages for wind and PV power stations (as in the following table), in order to expedite stable progresses for energy storage amid low awareness of energy storage.

210601_EN_2_Policy

ESS demand 

So far, provinces included in the following chart have mandotorized the application of energy storage in wind and PV power stations. Calculated according to the scale of power stations, there has been more than 1 GW of demand already. Chinese demand for energy storage from the generation side will see marked increases, as more provinces will follow suit and required percentages might be raised. Active implementation of policies has great impacts on the deployment of energy storage, which is hoped to see demand growth in the upcoming years.  

210601_EN_3_Policy

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