By Liu Chang, Shi Hongyu, Sinopec Economics & Development Research Institute
Energy storage is one of key technologies in the energy sector. It is important for incorporation of new energy sources and has major implications for the current revolution of energy production and consumption. Industrialization of energy storage in China is, however, still at the initial stage. On October 11, 2017 the National Development and Reform Commission, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology and the National Energy Administration jointly issued the “Guiding Opinions on Promoting the Development of Energy Storage Technology and Industry”, defining overall requirements, main tasks, safeguard measures and development routes for the sector.
Energy storage technology will march towards a period of rapid development
In a broad sense, energy storage means the storage of energy. In a narrower sense, however, energy storage usually specifically refers to electrochemical energy storage. Electrochemical energy storage technologies such as lead acid battery, lithium battery, flow battery and sodium sulfur battery have already passed the initial R&D stage and gained successful applications in electric vehicles. They will very likely become technologies with the most promise in larger scale power energy storage.
Lead acid battery
The lead acid battery is a traditional storage battery. It has the highest maturity and the lowest cost, but the energy density is low and the cyclic life is short. It is therefore not qualified for use in the grid. With the addition of active carbon into the cathode of a lead acid battery, lead carbon battery has a much longer service life and can be used in the storage of energy from new sources. It is an energy storage technology with quite mature technology and has the lowest cost today. The cost of lead carbon batteries is around RMB1 200/kWh. A type of lead carbon battery developed by Zhejiang Narada has already gained several applications such as the wind/photovoltaic/diesel energy storage power station and seawater desalination system on Dongfushan Island of Zhejiang, the new energy city micro grid demonstration project in Turpan of Xinjiang and the 4mWh new energy micro grid energy storage project on Luxi Island of Zhejiang.
Lithium battery
The lithium battery has high energy density, rapid charging/discharging, long service life and no environmental pollution and is therefore called a “green battery”. It is a major battery type used in electric vehicles. The cost of a lithium battery is higher than a lead carbon battery today, but there is space for reduction. The highest energy density of lithium battery used in electric vehicles can reach 170W.h/kg today and the cost is around RMB1 200/kWh. It is expected that the average manufacturing cost can be reduced by around 9% each year in next 3-5 years. (The cost of raw materials changes with their market prices.) The charging/discharging cycle is still the major bottleneck in the development of the lithium battery.
Vanadium flow battery
The vanadium flow battery is a flow battery produced on the basis of metal vanadium redox. Vanadium flow energy storage batteries, wind power and photovoltaic power jointly form an off-grid or micro grid power generation system which is the best choice in remote areas. A 2kW vanadium flow energy storage battery developed by CAS Dalian Institute of Chemical Physics has already achieved over 10 000 charging/discharging cycles with no evident attenuation of energy efficiency. A 200kW/800kWh vanadium flow energy storage battery system of Dalian Rongke Power Co., Ltd. is already incorporated into renewable energy smart micro grids and has started successful grid-connected operation. High cost is the major barrier to the market success of vanadium flow batteries. The cost of a vanadium flow battery can be as high as RMB2 700/kWh.
Sodium sulfur battery
In the world today, more than 200 sodium sulfur battery energy storage stations with a power of over 500kW are used in commercial, industrial and renewable energy power generation sectors. The largest scale has reached 34mW and the average energy efficiency is over 80%. Nevertheless, factors such as high cost (around RMB2 000/kWh), strong corrosion of anode/cathode substances, frequent malfunction and stringent operation conditions have constrained the development of the sodium sulfur battery. It is expected that the cost of the sodium sulfur battery can be reduced to RMB1 300/kWh by 2020, being basically competitive with the lead carbon battery and the lithium battery.
The scale of electrochemical energy storage in the world is around 3.30GW today. The scale of electrochemical energy storage in China is around 260MW and there are around 50 demonstration projects here. The biggest project is the 200MW vanadium flow battery project in Dalian that was put on stream in June 2016. The development of energy storage technologies is still restricted by various factors such as high cost, charging/discharging cycle, scale and safety. Some technologies have however already got onto the track of stable progress and cost reduction. It can be foreseen that next 5-10 years will bring rapid development of energy storage technology. It is expected that by 2024 the installed capacity of electrochemical energy storage in the world will reach 45GW and the installed capacity in the Asia-Pacific region will account for 53% of the world total.
Energy storage technology promotes energy reform
Energy storage technology in China is still at the initial stage, but it already promotes energy reform, mainly in the following aspects:
1. Energy storage technology can facilitate the incorporation of wind power and photovoltaic power, and promote the development of renewable energy sources. If the installed capacity proportion of wind and photovoltaic power generation is below 10%, the grid is basically safe and stable. If the proportion is above 15%, energy storage has to be used to reduce fluctuations in grid-connected operation. Renewable energy sources have developed very rapidly in China. The installed capacity proportion of wind and photovoltaic power generation was 6.8% in 2017. Energy storage technology is an effective approach for stabilizing wind and photovoltaic resources and enabling utilities to better adapt them to present power distribution mechanisms.
2. Energy storage technology can promote the development of distributed energy sources and an energy internet. It can effectively match supply and demand, guarantee the quality of the energy supply, change the traditional “independent + stock” supply pattern of cold, heat and power systems, achieve energy connection among various buildings and tap the potential of energy stocks. Energy storage is also a necessary vehicle for connecting distributed energy sources with traditional sources and is a core technology in the energy internet. Energy internet will in turn be one of the major profit-earning points in energy storage.
3. Energy storage technology can help government formulate better targeted and differential power pricing policies, optimize the allocation of power resources and enhance the overall generation efficiency of power systems. By means of energy storage technology control of peaks and lows of energy consumption can be achieved, power from different power generation types can be shunted and dispatched, accurate tracking and real-time control can be conducted and specific targeted pricing schemes can become possible.
4. Energy storage technology can boost the development of electric vehicles. Battery technology is a core technology for electric vehicles and directly influences the performance of vehicles. Pushed by energy storage technology, grids and charging facilities will be quickly improved, vehicle charging and battery renewal will be facilitated and electric vehicles will therefore be further popularized.
5. Energy storage technology can stimulate energy innovation and foster the birth of new business types and new commercial modes in the energy sector. Energy storage will greatly promote local production and incorporation of electric power, change routine energy consumption modes and even life modes of people and increase the proportion of renewable energy sources in the energy consumption structure of conventional businesses and residents.
Development of the oil/gas sector
Develop a comprehensive energy supply system: In China the oil/gas sector holds an important position in the energy structure. The proportion of primary energy consumed from the oil/gas sector is around 25%. Crude oil is very irreplaceable in the communication and chemical sectors. Natural gas is an important energy source for restructuring the energy economy and for supply-side reform; it is also a choice for development of the distributed energy system. To restructure the energy economy, distributed natural gas facilities and large-scale natural gas based electric power generation projects should be actively launched to push natural gas to become a major energy source in China. Moreover, various energy sources can be combined to create a comprehensive energy supply system network so as to accelerate the progress of lowering carbon output in the entire energy system.
Expand new energy businesses: Crude oil and natural gas will remain important energy sources for the whole world in the next 30 years. While maintaining existing businesses, the oil/gas sector should actively enter new oil/gas-related energy sectors. Energy from new sources can be used to make up for the internal oil/gas consumption in oilfields. The oil/gas sector itself is a big energy consumer. It is therefore necessary to develop energy from new sources such as wind energy, photovoltaic energy and geothermal energy, according to local conditions.
Get involved in energy storage technology: Energy storage technology is one of key technologies for power development. It is also an investment sector with high returns. The development of energy storage technology has already promoted the replacement of traditional vehicles by electric vehicles and in turn produced impacts on oil demand. Oil/gas companies can participate in the research of energy storage through research of electric vehicle mileage and natural gas power generation systems. The effort can also help cope with the replacement of oil/gas by electric power.
