On October 27, 2024, the State Grid Energy Research Institute held a release conference in Beijing for its "2024 New Energy Storage Development Analysis Report." The report was published by the Institute’s New Energy Research Center.
Based on a thorough analysis of the development status of new energy storage over the past year, the report provides updated insights into the policy environment, technological and economic characteristics, and development trends of new energy storage. In collaboration with provincial companies from Shandong, Xinjiang, Qinghai, Hunan, and Zhejiang, the report explores the effectiveness of new energy storage applications within the power system, examines feasible business models, and summarizes the trends and rules of new energy storage development through think-tank and industry research. The report also conducts in-depth research on key issues, such as the role of new energy storage in power supply security, distributed solar storage integration, and the source-grid-load-storage system.
The scale of new energy storage in China continues to grow steadily, maintaining the rapid development trend of 2023. By the end of June 2024, the cumulative installed capacity of new energy storage projects nationwide had reached 44.44 million kW / 99.06 million kWh, an increase of over 40% compared to the end of 2023. Among these, the State Grid operating area has an installed capacity of 36.8 million kW, mainly distributed in Xinjiang, Shandong, Gansu, Ningxia, and Hunan provinces.
The utilization level of new energy storage stations is gradually improving. In the first half of 2024, new energy storage stations in the State Grid operating area charged a total of 7.7 billion kWh and discharged 6.6 billion kWh, achieving an average of 459 hours of utilization, which is a 140-hour increase year-on-year.
Policy support for new energy storage remains strong, with a focus on promoting efficient utilization and comprehensive participation in various market transactions. In terms of grid scheduling and utilization, market-based approaches are emphasized to facilitate the use of new energy storage, supporting “multiple uses and time-based reuse.” In power market development, new energy storage is encouraged to independently select participation in energy markets and ancillary services markets for revenue. By June 2024, 8 provinces within the State Grid operating area had allowed energy storage to participate in the spot market, 12 provinces allowed participation in peak-shaving, and 9 provinces allowed participation in frequency regulation. Ancillary services such as primary frequency regulation, black start, ramp-up, and backup have also opened up to energy storage. Regarding electricity pricing, local authorities are actively exploring capacity compensation and leasing models to compensate for the costs of new energy storage capacity and are refining time-of-use pricing policies to promote the development of user-side energy storage. Additionally, some provinces allow independent energy storage to receive compensation through special charging and discharging price policies.
Technological innovations continue to make breakthroughs, and pilot demonstrations of new energy storage are showing initial results, revealing a trend of diversification. Lithium-ion battery energy storage cells, with a mainstream capacity of 280 Ah, are progressing toward larger capacities, higher safety standards, and longer lifespans, with system integration reaching the gigawatt-hour level. Vanadium redox flow batteries are currently in the stage of megawatt-class pilot demonstrations, with key materials such as battery stacks and essential raw materials being independently controlled, overcoming challenges related to battery separators. New compressed air energy storage is transitioning from demonstration to marketization, focusing on key technical optimizations such as compression and expansion, with the first 300 MW advanced compressed air energy storage expansion machine launched, reducing system costs by 20%-30% and improving efficiency by 3%-5%. Flywheel energy storage has made breakthroughs in array integration design, and a 30 MW single-station demonstration project for grid-side frequency regulation has been officially put into operation. Sodium-ion battery energy storage is in the pilot testing phase, and the technology has been innovatively applied for the first time in a 100 MW large-scale storage station.
New energy storage’s role in regulation continues to grow, effectively supporting the integration of renewable energy and ensuring power supply security. In terms of renewable energy integration, regions rich in renewable resources, such as Xinjiang, Gansu, and Tibet, have seen the integration of energy storage with large renewable energy bases, supporting efficient absorption and large-scale transmission of renewable energy. In provinces with more challenging renewable energy absorption, such as Ningxia, Qinghai, and Tibet, the energy storage capacity of new energy storage stations has reached over 85% of their installed capacity. During the summer and winter peak seasons of 2023, provinces such as Hebei, Jiangsu, and Hunan, with tighter power balance, saw peak simultaneous rates of new energy storage exceeding 80%, ensuring effective power supply with no power rationing.
The report analyzes the new energy storage landscape in 2023 and the first half of 2024, considering the scale and progress of projects under construction, alongside the synchronization of some projects with the integration of renewable energy projects. Based on this analysis, it is estimated that by the end of 2024, the installed capacity of new energy storage in the State Grid operating area will reach 60-64 million kW, with a national scale of 72-75 million kW.
The recent development of new energy storage has shown three major trends:
a. From focus on configuration to focus on application: The approach has gradually shifted from being policy-driven to market-driven, with a stronger emphasis on practical applications.
In terms of promoting new energy storage's role in power supply security, the report examines the challenges and opportunities faced by new energy storage and provides recommendations.
Role in Power Security: New energy storage can play a key role in peak shaving, security support, and backup assurance.
Challenges in Power Security Participation: There are issues such as insufficient charging windows in some provinces, the need for optimization of the dispatching and operational mechanisms for new energy storage, a lack of economic incentives in operational mechanisms, and limited market participation.
Recommendations for Improving Market Participation: Improvements are needed in coordinating various regulatory resources, optimizing scheduling and operational mechanisms, and enhancing grid integration management to facilitate new energy storage’s participation in power supply security.
Regarding distributed photovoltaic energy storage integration, the study analyzed the necessity of energy storage for distributed PV projects, including national policies and the economic feasibility of various distributed PV energy storage technologies. The following recommendations are proposed:
Supportive Policies: Develop differentiated management policies for energy storage configuration based on the type of photovoltaic project.
Market Mechanisms: Promote the development of market mechanisms to encourage storage to play a regulatory role and generate reasonable returns, motivating investment.
Management of Rural Energy Storage: Strengthen the management of dispatch and operations for rural solar storage integration to improve storage utilization.
On the integrated source-grid-load-storage development, the study analyzed the concepts and typical business models of integrated projects, offering suggestions for high-quality development:
Project Standardization: Standardize the construction of integrated projects to ensure fairness in basic rules and regulations.
Grid Connection Management: Strengthen the management of grid connection operations to ensure the safety and reliability of the power system.
Clarification of Market Participants: Clearly define the market participants' roles to ensure fair participation in the market for integrated projects.
This report offers a comprehensive and forward-looking analysis of the state of new energy storage development in China, identifying challenges, proposing solutions, and outlining key trends to guide future policies and investments in the sector.
