【New Energy Applications】How to Better Integrate Distributed Solar Energy with Energy Storage Technologies
Thread Content
Distributed solar and energy storage technologies play a key role in reducing greenhouse gas emissions, enhancing grid flexibility, and improving access to energy. A series of dynamic trends will gradually determine the development and application of distributed solar and energy storage technologies, as well as whether their potential value can be realized. Multiple advantages of combining distributed solar energy with energy storage technologies. Solar energy and energy storage technologies each have their own advantages. Solar power generation can achieve zero carbon emissions without any additional costs. Energy storage technologies can provide backup power, frequency regulation, and other grid services. Combining the two yields further advantages, especially by enabling continuous power supply at night, increasing output during the available generation period, and enhancing grid flexibility. In distributed communities and rooftop systems, the combination of solar energy and energy storage technologies can also reduce the strain on distribution networks, thereby delaying or minimizing infrastructure investments. At the macro level, energy storage and solar power generation can increase the adoption of solar installations without requiring major changes, thereby reducing carbon emissions. The combination of energy storage technology and solar power generation can also serve as a fast track to electrification in emerging markets.
The photovoltaic + energy storage model is gaining momentum. Since 2013, energy storage has been increasingly used in renewable energy power generation and microgrid projects, a trend that is particularly evident in the Chinese market. According to incomplete statistics from CNESA, the share of energy storage projects in the field of distributed power generation and microgrids among all energy storage projects in China increased from 24% in 2013 to 46% in 2015. There are mainly four reasons for this: **very proactive plans for the development of rooftop photovoltaic systems have been established, along with electricity price subsidies; distributed projects are more suitable for the use of energy storage technologies at the current stage, both in terms of cost and technical characteristics; from international experience, the ultimate goal of distributed energy generation is self-use, making the use of energy storage essential; the photovoltaic-plus-energy-storage model offers many opportunities for innovation and potential profits, and it is an area that attracts significant interest and participation from investment and financing institutions.** According to GTM/ESA, in 2014, storage systems used at the consumer level in the United States accounted for only 10% of all storage projects, but their growth rate was faster than that of storage systems used in power grids and for power generation; they are expected to account for 45% of the total installed capacity by 2019. Electricity cost management (including usage-based charges and capacity-based charges) is an important factor in the application of energy storage at the user side. Recently, the consumer-side energy storage market in Germany has also become very active. Thanks to policies such as subsidies for energy storage installation costs, exemption from value-added tax, and low-interest bank loans, the economic viability of home energy storage systems has become quite evident. It is predicted that the number of photovoltaic + energy storage systems will rise from 10,000 in 2014 to 13,000 in 2015, with an expectation of reaching 60,000 by 2017.
From the perspectives of wide application and cost-effectiveness, there is still much room for improvement in the development of the photovoltaic-storage model in our country. Firstly, if photovoltaic power generation in our country is to develop into a sustainable new energy industry, it is necessary to improve policies and subsidy measures, as well as innovate business and financing models. At present, the mainstream business model for distributed photovoltaic projects in China still follows the approach used for ground-mounted power plants, that is, a combination of the project owner’s own capital and bank financing. There are limited opportunities for new financing channels, and no connection has yet been established between photovoltaic assets and private capital. The idea of using industrial investment funds to facilitate project development is still under discussion. Secondly, from the perspective of energy storage’s role in photovoltaic projects, the lack of relevant policy support for energy storage, coupled with high costs, renders projects that incorporate such storage unprofitable; furthermore, there are no sufficient returns to attract investment from capital markets. Finally, some of the additional benefits associated with user-side energy storage, such as leveraging large price differences between peak and off-peak times to achieve arbitrage by storing energy at low prices and selling it at high prices, or earning extra income by participating in demand response, are also difficult to realize in China in the short term.
Therefore, policy support, including increasing the price difference between peak and off-peak electricity rates, subsidies for energy storage installation, and subsidies for electricity prices related to energy storage, is an essential factor in the development of photovoltaic and energy storage projects. It is also hoped that the new round of electricity reform initiatives will provide a more flexible and market-oriented platform for the use of energy storage, thereby enabling it to fulfill its role as a rapid-response power source to a greater extent. The improvement of energy storage technologies and the reduction in their costs are also important factors driving the application of energy storage. The development of electric vehicles has promoted the industrial production of power batteries, helping to reduce costs. The development of various energy storage technologies in fields such as telecommunications, transportation, mining, and logistics will also help to reduce technical costs and improve performance metrics. Only within the framework of subsidy policies, by working together closely, can technology manufacturers and financial institutions make full use of their expertise, financial resources, and market experience to foster the development of energy storage solutions suitable for the Chinese market.
The prospects for energy storage are promising. Recently, various research institutions have predicted the future capacity of energy storage systems from different perspectives; although their definitions vary, they all reflect confidence in the rapid growth of the energy storage market in the future. According to CNESA’s projections, by 2020 the scale of China’s energy storage market will reach 66.8 GW, of which 35 GW will be dedicated to pumped storage. The market size for other energy storage technologies, including battery packs used in electric vehicles that are part of vehicle-to-grid systems, is expected to exceed 31 GW. 100% of pumped storage is used on the grid side, nearly 14% of energy storage is used for connecting centralized renewable energy sources to the grid (centralized photovoltaic plants, CSP plants, and wind farms), 20% of energy storage is utilized at the customer side, and it is estimated that 12% of the energy storage capacity will come from power batteries used in vehicle-to-grid applications. From an application perspective, driven by relevant **departments in our country, the development of an energy internet system centered on power grids will be a key focus for future progress. The development of the energy internet will facilitate the widespread use of energy storage technologies and drive rapid growth in installed capacity. Furthermore, in the energy internet, not only battery storage technology, but also heat storage, gas storage, hydrogen storage technologies, etc., will play an important role. Combined with the revolution in energy consumption and electricity reform, China is expected to take the lead in achieving an initial integration of energy and the Internet in areas such as distributed energy, microgrids, demand-side management, contract energy management, and data-driven energy services in the near future.
Against the backdrop of increasing efforts to promote and deploy electric vehicles in recent years, as mobile energy storage units, they will also play a greater role within the framework of the energy internet. In recent years, the large-scale integration of renewable energy sources and new energy vehicles has been impacting and threatening the structure and operational safety of traditional power grids, from the transmission side and the distribution side respectively. As an effective approach to balancing power supply on the generation side with power demand on the consumption side, demand response enables the effective integration of renewable energy sources and new energy vehicles. It is significant for addressing the charging demands of electric vehicles, helping power grids manage peak loads and fill capacity gaps, as well as for incorporating more renewable energy sources. Although China’s energy storage industry currently faces issues such as a lack of relevant policies, needs for improved technical standards, limited system capacity, high costs, unclear application potential, and inadequate mechanisms for participating in the electricity market, its rapid development in the future is inevitable, as it represents an effective means of integrating large-scale renewable energy sources and improving energy efficiency on the consumer side. If 2015 was a year when the energy storage industry began to develop gradually and its technologies started to mature, then the 13th Five-Year Plan period marked a new era in which energy storage achieved significant value, established sustainable development models, and entered commercial operation.