It has become a consensus that achieving the "double carbon target" requires a completely new power system.
In the previous "How to pull a new power grid for new energy?" In the article, we have detailed what kind of power system can be called a "new grid", and what challenges are faced to build such a grid and three basic solutions, namely "accurate, adjustable, and stored". However, due to space limitations, the article does not discuss the "energy storage" link in detail - but this is not because energy storage is not important, but it is too important to sort out in a limited space.
This article will focus on the current technical route and business model of energy storage, and analyze this popular industry for readers.
After all, it's the first year of energy storage.
Frost and light rain | Contributing Author
Chen Minlei | edit
The magnifying light team | mastermind
Why should we develop energy storage?
A power system that can achieve "carbon peaking and carbon neutrality" must be a new power system with new energy as the main body.
This solution means that in the future, the energy supply body of our power system will become new energy sources such as wind and light, but its biggest problem is instability. The following is a typical output and load power consumption of the scenery in different seasons in a certain place, and it can be seen that the obvious fluctuations are large and unstable, which is very unfriendly to the power system and even harmful.
Typical output and load power consumption of scenery in different seasons in a certain place[1]
In the past, thermal power plants with stronger regulation capabilities could still ensure the balance of electricity, but with the continuous increase in the proportion of "new energy" power generation, relying on the traditional regulation mode of thermal power plants, it has been unable to adapt to the fluctuations of the power system and the new regulation and control methods of power grid demand.
The significance of energy storage is that by integrating energy storage facilities with wind and light, when the power generation is too much, it will charge the energy storage equipment to stabilize the peak, and when the power generation is insufficient, the energy storage equipment will discharge to make up the gap, and the "uncontrollable" of the new energy system will become "controllable".
What are the ways to store energy?
Since energy storage is so important, what technical routes are worth developing and laying out?
In the general direction, according to the "Opinions of the CPC Central Committee and the State Council on The Complete, Accurate and Comprehensive Implementation of the New Development Concept to Achieve Carbon Peak carbon neutrality"[2], China's current energy storage technology route is roughly divided into two categories: pumped storage and new energy storage.
Comparison of technical characteristics of different types of energy storage[3][4]
Pumped storage: mature and reliable, low price and sufficient
The principle of pumped storage is very simple, build two reservoirs on the mountain and under the mountain, install a water turbine that can be used as both a pump and a generator, pump the water under the mountain to the mountain when there is more electricity, and put the water on the mountain to generate electricity when there is less electricity.
Schematic diagram of pumped storage
The advantage of pumped storage is first of all the large scale.
A pumped storage power station, just a few units can achieve hundreds of megawatts of energy storage scale, and it is not uncommon for gigawatts (large-scale energy storage is very rare). What is valuable is that the unit cost of the pumping route is not high, about 500 yuan to 1000 yuan / kWh (about a quarter to half of the lithium battery), but the service life can reach 40 to 60 years (lithium battery is only about 10 years).
In addition, pumped storage is very mature, the world's first pumped storage power station was built in Switzerland in 1882 (the eighth year of Qing Guangxu), and China also built the first pumped storage power station as early as 1968.
Pumped storage diagram
But pumped storage is also flawed. One is that the site selection is harsh, there must be mountains, lakes (rivers), mountains can be built reservoirs, to be able to pull the power lines over; the other is the destruction of the natural environment, splitting mountains and rivers can not be without negative impact. Of course, these problems are expected to be solved through technical means.
It is foreseeable that pumped storage will remain the main force of energy storage in the power system for a long time. At present, the total scale of pumped storage power stations in China is 32.49 million kilowatts, far exceeding the sum of all other energy storage methods, mainly distributed in East China, North China, Central China and Guangdong; the total scale of pumped storage power stations under construction is 55.13 million kilowatts, about 60% of which are distributed in East China and North China。 Both the scale of construction and under construction ranks first in the world.
From the perspective of long-term planning, according to the "Medium- and Long-term Development Plan for Pumped Storage (2021-2035)", by 2025, the total scale of pumped storage production in China will reach more than 62 million kilowatts (doubled), and by 2030, the total scale of production will reach more than 120 million kilowatts (doubled again), and the industry prospects are considerable [5].
New energy storage: a hundred flowers bloom for the future
At this stage, people's cognition of the concept of "new energy storage" mainly comes from lithium batteries, but in fact, all energy storage methods except pumped energy storage can be included in the category of "new energy storage". There have been a large number of analytical articles on lithium battery energy storage, and will not be repeated, this article mainly talks about several other energy storage methods promoted by the state.
In July this year, the National Development and Reform Commission and the Energy Administration issued the Guiding Opinions of the National Energy Administration on Accelerating the Development of New Energy Storage (hereinafter referred to as the "Guiding Opinions"), which emphasizes four energy storage technologies: compressed air, flow batteries, flywheel energy storage and sodium-ion batteries, which we will highlight below [6].
Source: National Development and Reform Commission"National Energy Administration "Guiding Opinions on Accelerating the Development of New Energy Storage"
Although there are many types of energy storage technologies, according to the energy storage method, it can be roughly divided into two types: physical energy storage and electrochemical energy storage. Physical energy storage is the conversion of electrical energy into mechanical energy, gravitational potential energy and other physical energy, typical of which is the pumped storage energy (gravity potential energy) above; electrochemical energy storage is the conversion of electricity into chemical energy, which is the current hot lithium battery.
Looking back at the "Guiding Opinions" according to this classification method, it can be found that these four energy storage methods are exactly two or two groups. Among them, compressed air and flywheel energy storage belong to mechanical energy storage, while flow batteries and sodium-ion batteries are electrochemical energy storage.
Physical energy storage: Compressed air energy storage
Compressed air energy storage, as the name suggests, is to compress the air to store energy when there is a lot of electricity, and when electricity is needed, it uses compressed air to generate electricity, and according to the way of power generation, it can be divided into "supplementary combustion" and "non-supplementary combustion" two.
"Supplementary combustion" compressed air storage technology mixes compressed air with natural gas when generating electricity, and then fully burns in the combustion chamber to drive the generator to generate electricity. This method is currently the most mature compressed air energy storage technology, with power of up to hundreds of megawatts. As early as 1978, Germany built the Huntorf compressed air storage power station with a capacity of 290 megawatts.
But the disadvantages of this model are also obvious, strictly speaking, this energy storage is a "gas-fired power generation amplifier", which is essentially a gas-fired power plant, which requires fuel and has carbon dioxide emissions. Therefore, this technology has been gradually eliminated.
Schematic diagram of the principle of supplementary combustion type compressed air energy storage[7]
Another compressed air energy storage technology is the "non-supplementary combustion" type, which directly uses compressed air to promote the generator to do work, will not produce additional carbon emissions, and at the same time, in the process of air compression and expansion, additional cold and heat will be generated, which can provide cooling and heating for surrounding users, further improving the efficiency of energy utilization. Therefore, this technical route has also become the preferred development direction for compressed air energy storage technology in China, and is gradually maturing. At present, Jiangsu Jintan (60 MW) and Guizhou Bijie (10 MW) have built compressed air storage power stations and achieved grid-connected power generation[8].
Schematic diagram of non-supplementary combustion compressed air energy storage principle[7]
Physical energy storage: Flywheel energy storage
The main body of the flywheel energy storage is composed of a large flywheel, which uses electricity to drive the flywheel to rotate when there is a lot of electricity, and when electricity is needed, it uses the flywheel to drive the generator to generate electricity and transmit the electricity back to the power grid.
Schematic diagram of flywheel energy storage structure
In terms of the ability of the flywheel to store energy, it is completely incomparable with pumped water storage and compressed air, but the biggest advantage of the technology is that it responds quickly, can start quickly in a short period of time and immediately emits a large amount of electricity, so it can be excellent to match the "fast response" and "high power" scenarios, such as subways.
Subway trains are always stop-and-go, each braking will waste a lot of kinetic energy, flywheel energy storage can store the kinetic energy of the vehicle when stopping, and supply energy for the subway when starting, so as to achieve the purpose of power saving. Such equipment has been applied on the Fangshan line of the Beijing subway, according to estimates, a station can save about 1500 kWh of electricity per day, which is 500,000 kWh a year.
Flywheel energy storage application examples [9]
Electrochemical energy storage: flow batteries
Schematic of a flow battery
Flow batteries are different from conventional batteries as we understand them in that they consist of a stack cell (where the battery reacts), an electrolyte (the raw material for the chemical reaction of the battery), an electrolyte storage and supply unit (two large tanks, and a water pump that drives the flow of the electrolyte), and a management control unit (controller).
To put it simply, it is to put the electrolyte into two large tanks, and when needed, the electrolyte in the tank is pumped into the stack unit, charged or discharged, and then the tank is withdrawn after the reaction is completed. This technology is suitable for building ultra-large-scale battery energy storage facilities - as long as the tank is large enough, the energy storage capacity is strong enough, and large-scale energy storage is the most scarce capacity at this stage.
According to the different electrolytes, the flow battery can be divided into iron chromium flow battery, sodium polysulfide bromine flow battery, full vanadium flow battery, zinc bromine flow battery and other systems. Among them, the all-vanadium flow battery technology is the most mature and has entered the industrialization stage. The all-vanadium flow battery uses an aqueous solution as the electrolyte and the charge and discharge process is a homogeneous reaction (all liquids, no gas and solids are generated), so the safety is high (no explosion occurs), and the cycle life is very long (more than 10,000 times), which is very advantageous in the field of large-scale energy storage. In December 2021, China has built the first phase of the national demonstration project of the liquid battery energy storage power station in Dalian, with a project investment of 1.9 billion yuan, a construction scale of 100 MW/ 400 MWh, and a total future scale of 200 MW / 800 MWh, with a total investment of 3.8 billion yuan.
Electrochemical energy storage: sodium-ion batteries
Sodium-ion batteries can be understood as batteries that use sodium salts as electrode materials, and there is no novelty in technical principles, and the core reason for promoting the development of such batteries is not technology, but the industrial chain. Regarding the technical route, the amplified lamp's "Lithium resources are not enough, "sodium" will be replaced? " article, there is a more detailed introduction.
As the core raw material of batteries, lithium has been relatively scarce. Especially in China, in 2019, the domestic use of its own lithium resources to process the basic lithium salt is only 65,000 tons, the rest of the lithium concentrate depends on imports, a total of 1.72 million tons of spodumene concentrate imported, and the imported ore is mainly from Australia.
In recent years, the explosive growth of new energy vehicles has further significantly pushed up the price of lithium ore, and the price of lithium carbonate in December 2021 has reached 4 times that of last year. Academician Chen Liquan of the Institute of Physics of the Chinese Academy of Sciences mentioned that the current global proven reserves of lithium resources available for exploitation can only meet 1.48 billion electric vehicles, in 2020, China's motor vehicle ownership reached 372 million, the proportion of electric vehicles is still relatively low, the pressure of lithium resources has not yet appeared, with the further rise of electric vehicles, the hidden dangers of lithium resource supply will be highlighted. It can be seen that if lithium-ion batteries continue to be relied on, the development of the energy storage industry will be seriously constrained.
Lithium carbonate price trend
Sodium-ion batteries are different, sodium reserves are extremely rich, there is no scarcity problem, as long as the technology passes, we can reduce external dependence. Relying on the technology of the Institute of Physics of the Chinese Academy of Sciences, Zhongke Hai Sodium Company has developed a 145Wh/kg sodium-ion battery, which is lower than the 180Wh/kg of lithium iron phosphate, but has certain commercial value. CATL also issued an announcement in August that a 160Wh/kg sodium-ion battery has been developed, although there is still a gap between the absolute performance and the lithium battery, but at least it has the potential for initial commercialization, and the overall technical route is still worth looking forward to in the future growth.
From the perspective of industry prospects, if the future growth of pumped storage is called "considerable", then the development of new energy storage can be described as "outbreak". According to the zhongguancun energy storage industry technology alliance global database statistics, as of the end of June this year, the cumulative installed capacity of the new energy storage is 3571.4 MW / 7683.0 MWh, that is, about 3.571 million kilowatts, and the planned target for 2025 is as high as 30 million kilowatts [6], ten times the growth space - and this plan is still relatively conservative.
According to the "14th Five-Year Plan for the Development of the 14th Five-Year Plan for the Power Grid" issued by China Southern Power Grid, during the 14th Five-Year Plan period, China Southern Power Grid alone will promote 20 million kilowatts of new energy supporting new energy storage, while China Southern Power Grid only covers 5 provinces, and it can be estimated what kind of incremental space will be available in the 26 provinces, municipalities and autonomous regions covered by the State Grid [10].
This is also why although scale and commercialization are still on the way, the energy storage industry has already started in the capital market - sufficient market space has brought extremely optimistic growth, and many related secondary market investment targets have soared in situ.
Energy storage ETFs
How to make money with energy storage?
The energy storage industry is excellent and indeed critical, but it still needs commercial value to be developed. Only when "energy storage to make money" is deeply rooted in the hearts of the people, a huge amount of social capital will be truly invested, and it is possible to usher in the explosive development of the industry.
Then in the power system, who will pay for this energy storage, and how to make profitable energy storage projects have naturally become two key issues.
Who will build the energy storage?
From the role of construction to distinguish, the energy storage in the power system can actually be roughly divided into three types: source-side energy storage, network-side energy storage and load-side energy storage, each of which has different construction subjects and their construction purposes.
Source-side energy storage
Source-side energy storage is also called power generation side energy storage, as the name suggests, the main body of his construction is a variety of power generation companies, including thermal power plants, wind farms, photovoltaic power plants and so on.
In order to improve the controllability of wind and photovoltaic power stations, provinces often require them to be equipped with energy storage ranging from 5% to 10%, and the investment subject of this part of energy storage is naturally the corresponding wind and photovoltaic power station. For traditional thermal power plants, energy storage can strengthen their regulation performance, and the power grid will be directly linked to the regulation performance of the power plant when calculating the compensation cost of frequency regulation, so in order to obtain higher frequency regulation compensation costs, the power plant also has the power to equip its thermal power unit with energy storage.
Grid-side energy storage
The main body of construction of network-side energy storage is generally a power grid company, and the main purpose of its construction is to regulate peaks and frequencies, so as to ensure the safe operation of the power grid.
The most important form of grid-side energy storage is still a pumped storage power station, and the State Grid and china Southern Power Grid have established "State Grid Xinyuan Holding Co., Ltd." and "China Southern Power Grid Peak Regulation and Frequency Regulation Power Generation Co., Ltd." respectively to be responsible for the operation of pumped storage.
Load-side energy storage
The above two types of builders and the energy storage construction involved are often closer to a supporting facility, creating commercial value is not the core appeal, and its commercialization potential is not strong. However, load-side energy storage is the link with the highest commercial potential, and profitability is also the core goal of participants, so unlike the previous two, the construction of load-side energy storage has shown a diversified trend. Power generation companies, power grid companies, and all companies that want to earn income from energy storage operations have a certain layout on the load side.
What is the business model?
From the perspective of the basic business model, the main way for energy storage to make profits can be divided into two ways: peak-to-valley price difference and auxiliary service market.
Buy low and sell high, cut the peak and fill the valley
Due to people's natural electricity habits, sometimes more electricity is used (generally in the morning and afternoon), sometimes less electricity is used (generally at night), and "peaks" and "valleys" are formed in a day.
However, the power system does not like such peak-valley fluctuations, which often means that the frequent start-stop of the generator, which not only increases the start-stop cost, but also causes the reduction of the efficiency of the generator, so in order to try to smooth the peak-to-valley difference, the power grid will often set the peak-to-valley electricity price, the peak time electricity price is high, and the electricity price is low during the valley period. This creates opportunities for energy storage arbitrage, which can be charged at low prices at night, and then sold at high prices to earn the difference.
Peak shaving and valley filling
Take the simple calculation, relatively mature lithium battery as an example, the total cost of the current lithium battery energy storage is about 1500 yuan / kWh, the cost of investing in a 1 MW / 2 MWh energy storage station is about 3 million, the efficiency is about 90%, according to the number of cycles for 4000 times, the energy storage station can be discharged 7200 MWh during the whole life cycle, then the average cost of electricity can be calculated, about 0.42 yuan / kWh, that is to say, as long as the peak-to-valley difference is greater than 0.42 yuan / kWh, The project has profit margins.
So what is the level of peak-valley price difference in different parts of the country?
Peak and valley electricity prices across the country[11]
As can be seen from the above figure, the peak-to-valley electricity price difference in most areas meets this requirement. Even if you take into account factors such as battery decay and inflation in the later period, the actual cost of energy storage is half higher than our estimate, reaching 0.63 yuan, then there are still a large number of regions with sufficient profit margins.
Moreover, with the advancement of technology, the cost of energy storage will also be further reduced, according to the 2021 national key research and development plan "energy storage and smart grid technology" "GWh lithium-ion battery energy storage system technology" assessment indicators, the project at the end of the lithium-ion battery energy storage system equivalent electricity cost is not more than 0.1 yuan / kWh [12], and on December 9, this project has been won the bid by the Ningde era, looking forward to the Ningde era to bring us more advanced energy storage technology [13].
Peak shaving and frequency modulation, auxiliary services
As we mentioned in the previous article, the power grid needs to adjust the frequency and voltage through technical means, where the frequency regulation requires the adjustment equipment to quickly emit (increase the frequency) or absorb (reduce the frequency) power, and the service provided to the power grid is collectively referred to as "auxiliary service", and energy storage is an excellent auxiliary service provider.
Unfortunately, at present, China's power system has not yet established a unified auxiliary service market, and the work of providing auxiliary services for a long time has been regarded as the obligation of power plants, which is directly implemented after being ordered by the power grid dispatch. This leads to energy storage as a high-quality resource for peak regulation and frequency regulation, but it cannot achieve profitability in this scenario, and can only make a profit by buying low and selling high through the previous "peak and valley electricity price", reducing the profit means of energy storage.
But that's also changing. Since 2015, the state has successively issued relevant documents on the establishment of a power auxiliary service mechanism based on the principle of marketization, and has gradually developed and improved in recent years. By the "Measures for the Administration of Auxiliary Services in the Power System" in August this year, the policy level has clearly divided power auxiliary services into two categories: basic services and paid services, and pointed out that paid power auxiliary services can be provided through fixed compensation or market-based methods.
Since then, energy storage has added another profit model, providing more impetus for long-term development. In fact, energy storage can also achieve profitability through various innovative business models in the future, such as cloud energy storage, shared energy storage, etc., but space limitations are not expanded in this article.
Acknowledgements: Thank you for the technical support provided by Remote Vision for this article.
References：
Liu Dunnan, Xu Erfeng, Xu Xiaofeng. Integrated Source-Network-Load-Storage Operation Model for Campus Microgrid[J]. Power System Technology, 2018, 42(3):9.
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Chen Haisheng, Ling Haoshu, Xu Yujie. Physical energy storage technology in the energy revolution[J]. Journal of Chinese Academy of Sciences, 2019(4):10.
Li Xianfeng, Zhang Hongzhang, Zheng Qiong, et al. Electrochemical energy storage technology in the energy revolution[J]. Journal of chinese Academy of Sciences, 2019(4):7.
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CCTV Finance: China's new energy storage technology has made a major breakthrough. 2021.09.30 https://www.yicai.com/news/101188443.html
[9] CCTV: Flywheel energy storage is first commercialized in the subway: one station can save 500,000 kWh of electricity per year| flywheel. 2019.07.09 https://news.sina.com.cn/c/2019-07-09/doc-ihytcerm2324933.shtml
[10] China Southern Power Grid News: China Southern Power Grid's "14th Five-Year Plan" power grid development plan was released to comprehensively promote the construction of new power systems and serve the goal of carbon peak carbon neutrality. 2021.11.12 https://www.csg.cn/xwzx/2021/gsyw/202111/t20211111_323490.html
[11] Polaris Energy Storage Network: 2021 Provincial Peak-Valley Electricity Price Difference Summary! Shanghai/Beijing/Hubei/Zhejiang/Jiangsu/Shandong ranked high!.2021.08.09 https://chuneng.bjx.com.cn/news/20210809/1168511.shtml
[12] Ministry of Science and Technology: "14th Five-Year Plan" National Key R&D Program "Energy Storage and Smart Grid Technology" Key Special Project Application Guidelines for 2021 (Draft for Comments).2021.02.02 https://shupeidian.bjx.com.cn/html/20210202/1133827.shtml
[13] Ministry of Science and Technology: Announcement of the 2021 proposed project arrangement of the national key research and development plan "energy storage and smart grid technology" 2021.12.13 https://shupeidian.bjx.com.cn/html/20211213/1193225.shtml