Costs of cells decreased 90% over the decade, but energy storage is still expansive. Provided with one to four hours of storage time, cost per kWh sits at around USD 270-330/kWh, whilst prices for residential ESS could step higher than USD 700/kWh. High preliminary cost of investment and long payback period of ESS put off many investors, let along individual users. Against this backdrop, energy storage has, just like some renewable energies, saw the birth of sharing economy mode, forming peer-to-multiple or multiple-to-multiple electricity trading systems.
Shared energy storage
Shared energy storage (SES), also known as cloud energy storage, unlike the traditional self-consumption ESS, stores electricity from various sources and distributes them to many different households. For instance, manufacturers who want to install ESS but have different power demand find it unsatisfactory due to lofty costs and insufficient ESS use rates. This is where SES comes in handy. With its complementarity, SES reduces installation cost per kWh, caters to electricity demand of every business and user, whilst passes risks to energy storage companies. Costs for operation and maintenance are lower, thanks to high system concentration and the standardization of components.
Qinghai’s SES program
Chinese province of Qinghai has been dedicated in deploying renewable energy since 2017. The State Grid Qinghai Electric Power Company introduced a shared energy storage program, under which 347 renewable power plants were involved as of August 2021, including wind and solar energy power plants. With this program, electricity is saved during peak curtailment period, and distributed to the grid during valley load period.
Qinghai’s SES program mainly runs with peak shaving and electricity trading. The peak shaving service had a pilot run in June 2019 and has achieved 80.78% of charge and discharge efficiency as of August 2021, accumulating 2,509 of trading volume, with 543 hours of annual usage and 68.15 GW more of electricity generation.
As of August 2021, China had drawn up plans for 33 SES projects, including the 400-MW (800-MWh) SES project in Youyu of Shanxi Province and the 300-MW (600-MWh) SES pilot project of Shanxi Huadian Fuxin Energy, each received RMB 1.8 billion and RMB 997 million of investments.
The Sonnen Community
Besides Qinghai, Germany-based Sonnen developed its own sharing mode – the Sonnen Community. After storing certain amount of solar energy from end users, the company distributes electricity to households in need within the community. Sonnen provides various charging program for users to choose from. The success of Sonnen can be attributed to Germany’s high electricity bill. The Sonnen Community effectively reduces the cost of electricity and maximizes the benefits solar energy can bring.
SES reduces electricity cost, transfer risks, and makes maintenance easier. However, as a peer-to-multiple and multiple-to-multiple system, each user generates different amount of electricity, resulting in inconsistent charging for both peak and valley load periods. Therefore, a comprehensive charging guideline is necessary. As huge peak-valley load price differences can accelerate the development of SES, the future focus of SES is to get more distributed ESS involved and to integrate data, providing more digitized services.
* For more solar-plus-storage market analysis, contact [email protected] for the 2H21 Solar-plus-storage Global Market Report