China’s energy storage battery market boosting in 2018 03-28-2018

China's energy storage battery market developed vigorously in 2017 and will begin to grow rapidly from 2018. The middle kingdom drives to be the leader in new energy production and storages.


The Chinese government aims to increase its large-scale energy storage capacity over the coming years. So far, the country generated a total of 5.9 trillion kWh of energy in 2016, a quarter of which was generated by green energy methods like hydro, wind, nuclear and solar power stations. 

Energy storage technology, which is mostly developed in the USA but manufacturers in China, helps to preserve renewable power when the demand is lower than the supply and save it for distribution when consumption gets higher again. Sufficient storage would prevent power generation being curtailed due to surplus supplies. 

China's electric power network is the biggest one in the world. Home to some of the largest wind and solar farms globally, China has set aggressive renewable energy targets to further grow clean sources of energy. Currently, China has a total 90 of electrochemical battery energy storage projects either in operation, under construction or planned with a total capacity of 90MW. 

To capture most of the energy storage business, China has told its battery manufacturers to double their production capacity by 2020, created hurdles for foreign competitors and introduced subsidies for both electric cars and batteries. The country’s 13th five-year plan, which guides policy through 2020, guarantees a payout if manufacturers meet targets. Its battery industry also benefits from domestic lithium mining and mass electric-vehicle manufacturing. 

According to market intelligence firm CCM, China's energy storage battery market developed vigorously in recent years. In 2017, the output of energy storage batteries increased by 13% YoY, and the corresponding output value was rising up by 7% YoY. Though its future potential is predictable, the energy storage battery market is still restricted by relevant policies, pricing, electricity supply, among others. That is to say, energy storage batteries are still applied in a small range of areas. Its production capacity and growth rate both remain relatively small. Currently, the China-made energy storage battery is mainly used in communication base station, user-side peak shaving, off-grid power station, micro-grid, rail transit and UPS. 

However, according to CCM, China's energy storage battery segment is now in a critical period. This year, 2018, will be a start for its rapid development.

First of all, the energy storage guideline has been issued, a move intended to speed up its commercialized application. In Oct. 2017, 5 government departments jointly released the Guidelines to Facilitate the Energy Storage Technology and Industry Development, which is a state level plan for the energy storage battery business. It, aimed at accelerating the growth of energy storage battery business, consists of 2 phases and 10 years.


Secondly, the development of power battery business contributes to the growing energy storage battery. In China, the alternative energy vehicle industry is developing rapidly, which is a reason for the performance improvement and price falls of power batteries. In the meantime, the integration of new energy vehicle and distributed energy storage starts, a movable charger is an effective measure to ease the current deficiency in charging points. In 2018, large quantities of power Li-ion batteries will be scrapped, which can be dismantled and remade into energy storage batteries. The integration of power Li-ion batteries and energy storage batteries will enable the improvement in battery performance and meanwhile the accelerated reduction in cost. 

The period, from 2015 to 2017, witnessed frequent expansions of power battery production capacity along with structural overcapacity. As of the end of 2017, the effective production capacity of power battery throughout the country was 110 GWh and would exceed 160 GWh by the end of 2018. However, the utilization rate is now less than 40%. In regard to the demand from buyers, they are increasing their demand for power battery performance. This will force battery manufacturers unable to meet the requirements to seek for other application fields such as energy storage which, compared to power battery has lower requirements on battery performance, so as to increase the utilization of production capacity. 

Thirdly, the requirements on the energy storage battery performance such as safety, lifespan and efficiency are being quantized. Under this, the R&D and production of energy storage batteries will be clearer. 

Lastly, the energy revolution is promoting the establishment of energy internet where energy storage is a key technical support. Energy internet, based on "Internet + Intelligent Energy", is an advanced form of energy exploitation and utilization, and energy storage is a hub for energy conversion and utilization. The energy storage battery is excelling chemical battery such as lead-acid battery, lead-carbon battery and sodium-sulfur battery, due to its excellent performance such as high energy density, long lifespan and high rate discharging. 

About the article

The information for this article comes from CCM, China’s leading market intelligence provider for the fields of chemicals, energy, agriculture, food and feed. 

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