Grid forming energy storage: outlook under “Notice by the National Energy Administration of Promoting the Grid Connection and the Dispatching and Use of New Types of Energy Storage”

Energy storage plays a crucial role in facilitating the wide application of renewables as part of the world’s energy transition effort. In China, supportive policies are of utmost importance. On April 2, 2024, the government issued the “Notice by the National Energy Administration of Promoting the Grid Connection and the Dispatching and Use of New Types of Energy Storage” (hereafter as the Notice), marking a significant progress in promoting grid connection and dispatch of new energy storage. The following paragraphs explain the pros, cons, and market outlook of grid forming energy storage under current policy frameworks. 
 

Serving as a voltage source, the advantage of grid forming energy storage lies in its ability to operate independently from the external grid, providing voltage and frequency support when necessary.

Grid forming energy storage stands out for its millisecond-level response speed, providing instant power adjustments to combat fluctuations in grid frequency and voltage. This technology operates independently during grid faults, significantly improving the stability and reliability of power systems. Due to its high energy efficiency and robust system support capabilities, such as voltage and frequency support, grid forming energy storage has become an essential complement to the grid, especially for rapidly changing grid environments. 

However, initial construction and maintenance costs of grid forming energy storage are high and may prolong the payback period, resulting in inferior economic benefits compared to grid following energy storage, which is less costly, more mature, easy to maintain, can stabilize the grid but operates dependently on external grids. 

Although grid forming energy storage has advantages in complex grid environments, its application in specific markets may be limited due to high costs and complicated maintenance requirements. Therefore, supporting policies, such as technology requirements accelerating technology transition and subsidies relieving economic burdens for project developers, are essential for grid forming to popularize. 


 

The Notice proposes four grid-connecting and dispatching technical requirements for new ESS:

1. Standardizing the access to new ESS: Ensure all new ESS have undergone performance and grid connection tests and meet safety and stable power system operation standards.
2. Clarifying dispatching requirements: New energy storage equipment must be equipped with highly automated power control systems capable of precisely adjusting active and reactive power according to dispatch instructions.
3. Encouraging retrofitting of existing plants: Encourage existing power plants to enhance the dispatch response capability of their ESS through technical transformations.
4. Promoting innovation of system control technology: Support the technical innovation of the new ESS under various scenarios to enable market-oriented operation.

 

How the Notice supports the development of grid forming energy storage

The Notice provides a clear framework for developing new energy storage technology, facilitating the promotion and application of grid forming energy storage. 

      1. Clarifies pre-connection  technology requirements for new ESS:

• Policy clarity: All new ESS, including grid forming ones, must meet strict performance and safety standards before grid connection to ensure reliability and enhance competitiveness.

• Unified technical standards: With unified technical standards, grid forming energy storage can easily integrate with grid systems, improving efficiency and safety.

      2. Clarifies dispatching technology requirements and highlights the importance of system control:

• Optimizing control system: The core advantage of grid forming energy storage lies in its voltage source characteristic of being able to control  frequency and voltage independently. The Notice mandates that all ESS be equipped with advanced power control systems, which is direct advocation for the core advantage of grid forming energy storage.

• Automatic regulation capability: Grid forming energy storage with advanced automatic regulation capabilities can respond to power dispatch instructions more effectively, enhancing system efficiency and response speed.

      3. Encourages retrofitting existing power plants and innovation of control technology:

• Retrofitting: The Notice encourages technical upgrades of existing power stations by equipping them with grid forming energy storage, which will significantly enhance flexibility and peak-regulation capability.

• Technology innovation: The development of grid forming energy storage requires continuous technological innovation, particularly smart control technology. The Notice provides momentum and direction for the research and implementation of these advanced technologies, enabling grid forming energy storage to better meet diverse, market-driven operational needs.
   

Grid forming on the rise, industry investment increases 

In recent years, many regions in China have proposed policies encouraging or mandating the integration of grid forming energy storage in renewable energy projects, such as the “2023 Independent New Energy Storage Construction Plan for Xinjiang.” The plan mentioned the active exploration of grid forming energy storage, with at least 20% of new ESS installations integrating grid forming energy storage in Kashgar, Hotan, and Kizilsu Kirghiz Autonomous Prefecture. 

In April 2024, State Grid Ningxia Electric Power connected the 100-MW/200 MWh Phase 2 energy-storage project in Ningdong, China’s largest grid forming project, to the grid. 

Tibet initiated a tender for the 3 GW wind, solar, and thermal project, with grid forming energy storage (20%, 4h). The result was announced in May, with the CNNC's 500 MW/2000 MWh grid forming energy storage project in Wushi, Xinjiang securing the EPC contract.

In February 2023, Wärtsilä deployed a 300 MW/ 600 MWh grid forming battery energy storage station in Scotland. In June 2023, Australia commissioned its first grid forming, MW-scale, solar-diesel hybrid storage station with black start technology. In Northern Germany, a local power company used grid forming ESS to provide a 100% renewable energy supply to the entire town during grid failures.

With grid forming projects increasing, more and more manufacturers started investing in this technology. 


 

Driven by the Notice, grid forming energy storage technology will play a pivotal role in the Chinese power system. Its unique technical attributes and advantages make it unneglectable in future power markets and technological innovations. Considering policy guidance and market developments, the number of grid forming energy storage projects will further increase in 2024 as they provide firm support for new ESS. As global energy storage capacity expands, the future of grid forming technology is bright.