Recent Developments in energy storage power station

As of 2018, the cumulative installed scale of global commissioned energy storage projects is 180.9GW, of which pumped storage has the largest installed scale of 170.7GW, accounting for 94% of the total installed capacity of global energy storage, and the cumulative installed scale of electrochemical energy storage is the second largest, 4.9GW, accounting for 3.6%, of which lithium-ion batteries account for 86%.

With the continuous expansion of application needs, countries continue to support the introduction of policies and manufacturing processes continue to improve, in recent years the rapid development of energy storage battery technology, battery safety, cycle life and energy density and other key technical indicators have been significantly improved, the application of the cost of a rapid decline.

Among them, lithium battery energy density over the past five years has increased by a factor of 1, cycle life increased by 2 to 3 times, the application cost decreased by 60%; lead-carbon battery cycle life than the traditional lead-acid batteries to enhance the 3 to 4 times, the regeneration utilization rate of 97%, the integrated cost of electricity is about 0.6 yuan / kWh – times, are close to the break-even point, the large-scale commercialization of the application of the beginning of the beginning.

With small household energy storage system is different, energy storage power station refers specifically to the grid-oriented scale energy storage facilities, its capacity in several megawatts to hundreds of megawatts, to a certain extent, to reach the scale of the power station level. The focus on scaled energy storage power plants is due to their significance for the energy transition, their role in various segments of the power system, and changing the shape of the grid.

In the summer of 2018, the Zhenjiang electrochemical energy storage power plant project with a total investment of 785 million yuan and a total scale of 101MW/202MWh was put into operation, playing an important role in easing the local summer load peak. The project is China’s first truly large-scale independently operated energy storage power station serving the grid, and it has caused a whirlwind in the energy storage sector, and in less than a year, Henan, Changsha, and Gansu hundred megawatt-class energy storage power stations have been launched.

Although the price of energy storage has dropped a lot, it is still very high compared with alternative measures and has not yet reached the point of competing with other traditional energy sources. Energy storage power plants have been commercially deployed in a number of areas, and their drivers are distinctive.

Energy storage has become an important option for diversifying and securing power supply capacity

On January 31, 2012, Southern California Edison announced that the No. 3 reactor at the San Onofre Nuclear Generating Station, which the company is primarily responsible for operating, has been shut down because of a leak in an internal steam pipe.

With two operating nuclear reactors and an installed capacity of 2,200 megawatts (MW), the San Onofre Nuclear Power Plant is the largest source of electricity in Southern California, meeting the power needs of 1.4 million households. This shutdown of the nuclear plant’s reactors has raised concerns about the reliability of the power supply.

The Aliso Canyon natural gas field leaks in California (Aliso Canyon) caused by the crisis of power shortages, accelerated the pace of California for the installation of energy storage systems to ensure the security of power supply.

The Aliso Canyon natural gas underground storage facility is part of the Southern California Gas Company, a subsidiary of Sempra Energy. Between October 2015 and February 2016, 107,000 tons of natural gas leaked from the storage wells, making it the largest natural gas leak in U.S. history, leading to the evacuation of 11,000 nearby residents from their homes and total losses of about $1 billion. The total damage was approximately $1 billion.

The Aliso Canyon natural gas field meets 20 percent of the peak load in the CEC’s jurisdiction in the winter and 6 0 percent of the peak load in the summer. Without Aliso Canyon’s natural gas reserves, there would be serious challenges to regional power, heating and gas supplies. To make up for the power shortfall, California deployed 100 megawatts of energy storage at several locations over a six-month period.

As the value and importance of energy storage applications become increasingly apparent, in order to cultivate diversified energy storage technologies, create a long-term stable market conducive to the development of energy storage technology companies and system integrators, and safeguard the supply of electricity and power to California’s electric power system, the state of California has been studying the implementation of a mandatory procurement program for energy storage for utilities since 2010, and, through successive legislations, has required that the three major system operators in California (PG&E, SCE, and SDG&E) to deploy a target of 1. 8GW of energy storage by 2020.

As of the end of 2017, the U.S. had 708MW/867MWh of installed high-capacity energy storage, of which California had approximately 127MW with 380MWh of capacity, accounting for 44% of the energy scale and 18% of the power scale of commissioned projects.

Fair and Open Electricity Markets Provide Platform for Energy Storage

PJM is responsible for the operation and management of the U.S. electric power system in 13 states as well as the District of Columbia, centralized scheduling of the U.S. currently the largest and most complex power control area, with an independent FM market.

PJM is also the largest region in the United States of America energy storage power plant power installed, accounting for nearly 40% of the power scale and 31% of the energy scale of the project has been put into operation, the average power size of 12MW, the average storage charge and discharge time is 45 minutes, and most of the independent energy storage operators. The reason why energy storage power plants have been better commercialized in the PJM FM market is due to the fair market environment and pay-for-performance pricing mechanism.

The Federal Energy Regulatory Commission (FERC) has passed legislation since 2007 requiring organizers of various power markets to modify market rules, eliminate discriminatory provisions, and allow emerging facilities, including energy storage, to connect to the power system and participate in the power market, and in 2011, it issued Order No. 75 5 to develop a compensation mechanism for pay-for-performance FM ancillary services. On this basis, the PJM market created a fast FM market in 2012.

Energy storage, with its fast response characteristics, came out on top of all types of FM resources, replacing gas-fired units as the largest source of FM in PJM.Approximately 17 7 MW of energy storage participated in the PJM FM market in 2015. By the first half of 2016, capacity had increased to 265 MW, and total PJM FM costs for the first half of 2016 were $42.95 million, a 62.4% decrease from the same period in 2015.

The application of energy storage in the PJM FM market has not been smooth sailing, energy storage is responsive, but there is a limit to the time it can continue to provide FM service, and PJM has found that energy storage may reverse charge and discharge when the system needs to be regulated, increasing the FM burden on the system, for which PJM has had to pay more FM charges to other FM resources to deal with the above situation.

PJM lowered the benefit factor for fast FM resources in late 2015, resulting in fewer storage FM services being cleared by PJM and a 32% drop in total revenues in 2016, which directly discouraged energy storage operators from investing.

UK de-nuclearization and de-coalization energy plans increase capacity market demand for energy storage

The UK’s electricity market-oriented reform is a model for reference in many countries around the world, and has also profoundly influenced the path of electricity reform in our country. The UK has implemented three major reforms since 1989, and in 2011, the UK Department of Energy officially released the White Paper on Electricity Market-based Reform (2011), which started the third round of electricity market reform centered on the promotion of low-carbon power development, and the capacity market was proposed as an important part of this reform.

The establishment of the capacity market is also based on a certain background of energy development, the EU is determined to promote new energy changes, the Paris Agreement, the 2030 Framework Agreement on Climate and Energy, the Renewable Energy Development Guidelines continue to promote the UK’s energy renewal, new energy to crowd out the share of traditional fossil energy power generation, to accelerate the decommissioning of coal-fired, nuclear and other units.

Between 2010 and 2016, a total of 23GW of installed capacity of coal-fired power stations and nuclear power plants were decommissioned, which, in addition to the normal decommissioning of the unit, also includes some of the units decommissioned early due to environmental requirements; it is expected that in the next 10 years, there will be 24GW of coal-fired power stations and nuclear power plants facing decommissioning.

In 2013, the UK Department of Energy and Climate Change issued the UK Electricity Market Reform Implementation Program, which aims to provide a stable and sustainable new stimulus for capacity through the establishment of a capacity market, to ensure the profitability of existing capacity units, to maintain investor enthusiasm for new capacity units, and to reduce the capital drain from the current higher capacity reserves.

The UK has allowed emerging resources, including electrochemical storage, to participate in the capacity market since 2016, and the capacity market allows resources participating in capacity auctions to also participate in the wholesale electricity market, which has greatly contributed to the rapid rise in installed storage capacity in the UK.

In 2016, more than 500MW of energy storage resources won bids in the Capacity Market auction, accounting for 6% of the total capacity bid that year, and this auction cleared at £22 per kW per annum, up from £18 per kW per annum the previous year.

Similarly, participation in the market for energy storage, a newcomer, has not been plain sailing. The large number of winning bids for energy storage plants in the capacity market has caused some traditional power operators to question them.

At the beginning of 2017, they pressured the authorities that energy storage does not have long-term power supply capacity and would pose a risk to the security of power supply.In December 2017, the UK capacity market modified the derating factor for storage batteries, which characterizes, to a certain extent, the value of the capacity contributed by energy storage in power system emergencies, and directly affects the revenue of energy storage in the capacity market.

The adjustment of the derating system is mainly for energy storage systems with a discharge time of less than 4 hours, especially for energy storage systems with a discharge time of about 30 minutes. The adjustment makes energy storage systems with shorter continuous discharge times significantly less profitable in the capacity market.

In November 2018, the European Court of Justice ruled to suspend the UK Capacity Market auction after demand management provider Tempus Energy challenged the UK Capacity Market rules as biased in favor of traditional generating units and discriminating against emerging resources such as demand response and energy storage. As costs come down, energy storage will play an important role in more applications, and the game with traditional gensets has just begun.

Energy storage is the best support technology for new energy high percentage system

To cope with intermittent, random new energy large-scale grid, the grid needs more flexible regulation resources. Energy storage system can effectively smooth the new energy field station power fluctuations, reduce new energy randomness and volatility on the grid operation, significantly improve the ability to track the plan; energy storage system can improve the new energy field station reactive power regulation ability, suppress the grid point voltage fluctuations, improve the stability of the local grid voltage; in the case of wind abandonment and abandonment of the light to store the remaining power, to ensure that the green power is fully consumed.

Independent energy storage power station may not be able to compete with the traditional power supply, but the future of new energy and energy storage combined with the impact of traditional power supply will be revolutionary.

South Australia has a high proportion of renewable energy power generation, which is the state with the highest proportion in Australia, a large scale of natural gas power generation but a tight gas source, a high degree of uncertainty in power supply, and a weak external connection to the grid, which makes it difficult to rely on grid interconnections for mutual support, and the need to build a highly flexible power source such as energy storage.

As of the end of 2017, South Australia had a total installed power supply of 5.44 million kilowatts (kW), including 1.7 million kW of wind power and 780,000 kW of photovoltaic (PV), which together accounted for 46%; and 2.67 million kW of gas-fired power generation, which accounted for 49%. South Australia is connected to Victoria by only two lines (transmission capacity of 820,000 kW).
In March 2017 the South Australian government introduced the Energy Plan, proposing the establishment of an Energy Storage and Renewable Energy Technology Fund to partially fund the construction of energy storage projects, with a total budget of A$150 million. The Tesla Battery Energy Storage Project in South Australia receives economic funding from the government and profits from participation in the electricity market and ancillary services market.

The project, located near the Hor nsdale wind farm in South Australia, was invested in and operated by the owner of the wind farm, and constructed by Tesla, using lithium-ion battery technology, with a total capacity of 10 0 MW/12 9 MWh, and was commissioned on December 1, 2017, at the same time as the third phase of the wind farm project.

At the end of 2017, non-consumer-side energy storage in Australia reached 174MW, with more than 575MW of planned and constructed storage capacity, with the majority of projects related to new energy generation.

The continuous growth of renewable energy power generation in Italy in recent years, especially in southern Italy and Sicily and Sardinia, wind and solar power generation is developing rapidly, and the penetration rate of the grid is getting higher and higher, of which the wind and solar power generation in Sicily and Sardinia has reached 36% and 41% of the total local power generation, respectively, and the liaison between the power grid of the island and the main grid is relatively weak, and the system stability margin is relatively small, in order to improve the grid renewable energy acceptance capacity, reduce the abandoned wind and light power due to grid reasons, the Italian national transmission grid company Ter na in Italy Sardinia, Sicily, respectively, installed 8.65MW, 7.3MW energy storage system, in the south-central grid in three locations installed six sets of energy storage system, size 35MW/23MWh.

At the regulatory level, Italy’s electricity regulatory policy allows Terna to build and operate generation facilities for the safe operation of the transmission grid, to increase the penetration of renewable energy and for dispatch services. And after the project is included in the grid plan and approved by the Ministry of Economic Development and the regulator, the corresponding investment can enjoy the corresponding return on assets.

From the experience of the development of energy storage power plant: First, demand-driven, rational guidance. Second, it is appropriate to the market is the market, appropriate regulation is regulation. Third, the establishment of a sound market mechanism, a reasonable price formation mechanism. Fourth, the development of energy storage power plant is not overnight, but the interests of the main body of the process of mutual games, the nature of the energy technology and economy of the game.

Policy

Although many countries have introduced a number of policies and documents have emphasized the need to actively develop energy storage, play the role of energy storage in the field of grid peaking, renewable energy grid, etc., but these policies and documents are only clear that the “importance” of energy storage, there is no supporting the introduction of operational “practicality “Policies. The industry commented that China’s energy storage is in the situation of hot investment by manufacturers, hot research comments, the authorities reacted to the situation of bland.

Price mechanism

Grid-side independent energy storage power plant feed-in tariffs, charging tariffs have not been clearly positioned, the price mechanism as the lifeline of the energy storage project directly determines the sustainable development of the project. In terms of market access, independent energy storage plant can participate in a limited type of market, the spot market has not yet been built, the auxiliary services market is a single variety, and lack of operability, there has not been an actual case of independent energy storage plant to participate in the market.

Investment main body

Grid companies are still mainly invested in, less social capital participation, grid-side energy storage power plant investment intensity will also directly affect the development of business model innovation. Profit model, grid companies invest in energy storage facilities lack of cost channeling mechanism, social capital investment in energy storage projects lack of predictable profit space.

Currently the mainstream view is to improve the technical performance of energy storage and reduce costs to achieve commercial operation through the market-oriented approach. China is in the transition period of electric power system reform, the market mechanism is not perfect, and large-scale large-capacity energy storage power plant investment, application specialization, more need to improve the market mechanism to be guaranteed. As stated in the beginning of this paper, the energy storage power plant on the energy transition, the role of each link in the power system, as well as changing the shape of the power grid are of great significance, the future will be of great concern to all walks of life

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