CNESA Newsletter_201109_EN

MONTH
CHINA
09
ENERGY STORAGE
ALLIANCE
YEAR
2011
CNESA
Industry
Trends
this issue
RUBENIUS’s Approach to ES P.1
Project Updates
China’s Wind Power Problems P.4
◆
Hulunbeier, Inner Mongolia—
Tech Insights (Zinc Air) P.6
China State Grid announced a
rural micro-grid project that
China’s Generation Makeup P.8
will use 150 kW PV, 100 kW
wind and 50kW/100kWh Li ion
Important News P.10
energy storage
◆
RUBENIUS’s Approach to Energy Storage: A View Into the Future
Zhangbei, Hebei —Prudent Ener-
Considering that energy storage has over twenty
operational uses, ten applications, and more technologies and possible system configurations than
one could hope to count, it is hard not to reply “its
complicated” when asked the simple question:
“What is the value of energy storage?” To deal
with this complex maze of possibilities, most companies and research reports have focused on smaller more easily digested bits of the energy storage
industry. This has served to forward technological
understanding but has left the general public and
government officials in the dark concerning what
energy storage means to them.
gy will provide a 2MW/8MWh
v a n a d i u m r e d o x fl o w b a tt e r y
s y s t e m f o r p a r t o f n a ti o n a l
w i n d , s o l a r i n t e g r a ti o n p r o j e c t
◆
Albuquerque, NM—East Penn’s
500kW/2.5MWh advanced lead
acid solar and energy storage
i n t e g r a ti o n p r o j e c t b e g a n o p e r a ti o n
◆
United States —ZBB Energy will
p r o v i d e i t s ZBB EnerStore™ V3 Zincbromide flow battery f o r a s o l a r
Among the crowd of energy storage producers and
system developers RUBENIUS has emerged to fill
this need. RUBENIUS is not only pushing the limits
of energy storage development through building
and EV fast charging demons t r a ti o n p r o j e c t a t a m a j o r
s p o r ti n g v e n u e
Status of Worldwide Projects
As of September 1, 2011:
(proposals not included)
Worldwide Energy Storage In Operation
(2000– Present) 455 MW
Other
29%
NaS
71%
New Project Announcements: 4
NiCd
6%
Li-ion
8%
Total MW to be Added: ~2.5MW
Lead Acid
7%
Technologies to be used: Lithium
ion, zinc bromide flow and Vanadium redox flow
Projects Beginning Operation: 2
Flywheel
6%
CAES, pumped hydro and thermal energy storage not
included. Based on projected operational dates.
Flow
2%
Total MW added: 2.5
Ultracapacitor
<1%
Technologies Used: Lithium Ion,
Advanced Lead Acid
the world’s largest distributed network of energy
storage systems, it is providing a compelling story
that could sway the opinion of even the sternest
luddite. Their core belief is that energy storage is
not simply a technology that can slightly improve
the operation of the electric grid. It is a transformational technology that allows one to “rethink
grid design.”
The RUBENIUS Group was founded by Claus
Rubenius with the goal of minimizing energy waste
through the developing holistic approaches to the
smart grid for water and electricity. In 2004, the
RUBENIUS group formed the Amplex Group in Abu
Dhabi, a joint venture designed to address the Arab
Emirates’ growing water and energy demands.
Since its founding, this JV has successfully implemented an automated reading meter system consisting of 600,000 water and electricity meters as
well as a smart streetlight system that reduces
electricity usage by up to 25%. In 2009, RUBENIUS
began focusing on energy storage.
RUBENIUS is currently working on a 350 MW distributed energy storage project in Abu Dhabi. It
has already taken delivery of 110 MW of NGK NaS
Energy Storage systems and deployed ~40 MW.
These systems, which are being installed in 2-4 MW
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RUBENIUS’s Approach to Energy Storage: A View Into the Future
blocks at 11 KV distribution substations, provide much needed peak shaving service to meet Abu Dhabi’s growing power demand.
There are many factors driving the need for energy storage in this region:
◆
◆
◆
◆
◆
High Growth Economy: Abu Dhabi’s rapid economic growth has led to increased power demand, forcing the government
to discourage new manufacturing in order to ensure adequate power for residential and commercial loads.
Very “Peaky” Load: A majority of peak load comes from air conditioner use during the midday heat. Peaky loads entail
high power demand for a relatively limited part of the day. The generation and transmission infrastructure peak to match
this peaky load is not needed most of the time, which leads to waste.
Water Scarcity: Almost 100% of water in Dubai is from desalination plants. The desalination process is very energy intensive. As such, every liter of fresh water produced is strongly tied to price of electricity used to produce it.
Generation Transition: A large nuclear plant will come online in 2018 that will provide 25% of Abu Dhabi’s power needs.
Instead of building new coal plants that would primarily be used during this interim period, energy storage is being used
to bridge this gap.
Vertically Integrated Utilities: With vertically integrated or state-owned utilities there are fewer regulatory barriers and
fewer parties to split the benefits that energy storage can provide.
RUBENIUS is also actively developing a 1 GW “energy storage warehouse” in Baja, Mexico. This project, which is in the development phase, has received strong support from Mexico’s Federal Electricity Commission (CFE) and has even been endorsed by Mexico’s President Felipe Calderon. RUBENIUS will look to carry over it engineering and system control experience from the Abu Dhabi
project to accelerate the development of this massive undertaking. In addition to providing peak shaving services, energy storage
systems are expected to provide valuable renewable energy stabilization services to both the Mexican and North American power
markets.
RUBENIUS’s Vision
“It’s about avoiding investment in assets you don’t use.”- Jacob Rikard Nielsen, RUBENIUS
RUBENIUS is championing the “peak to average” concept. Since the beginning of the electric grid system, transmission and generation have been built to match peak load. However, this approach is very wasteful as hundreds of billions of dollar are being invested in grid assets that are not being used most of the time. Researchers estimate that 25% of distribution and 10% of transmission
and generation assets are used less than 400 hours per year. RUBENIUS wants to break from this trend and more effectively utilize
existing grid assets to meet growing power demand.
Total
Load
Total Generation
Required without Storage
System
Discharging
Total Generation
Required with Storage
System
Charging
Time (24 hour period)
Figure 1: RUBENIUS’s “peak to average” concept utilizes wide-scale load shifting to lessen the generation
requirement of the overall grid.
Under RUBENIUS’s approach, generation and transmission are scaled down to match “average demand” – reducing the size and
scale of required grid assets. A distributed network of energy storage systems is used to supplement the need for new generation
and transmission by charging during off-peak hours and discharging during on-peak hours – effectively doubling the amount of
power that some generators can contribute to peak load. Under this approach, existing generators will provide more energy
throughout the day while maintaining more stable power outputs, which boosts CCGT plant efficiency around 10-15%. In China,
where coal plants provide a vast majority of load following and frequency regulation services, this efficiency boost will be even
higher. By boosting power plant efficiency, energy storage reduces fuel costs and greenhouse gas emissions on a per kWh basis.
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RUBENIUS’s Approach to Energy Storage: A View Into the Future
RUBENIUS’s “scaled down” approach also realizes benefits associated with distributed generation. By locating energy storage systems near load centers, distribution losses resulting from congestion during peak load can be avoided. Localized energy storage
systems also provide power backup in the event of large scale grid blackouts. Finally, these energy storage systems can help to
stabilize power from local sources of renewable energy, increasing the utilization of clean energy while maintaining power quality.
RUBENIUS is demonstrating that current energy storage technologies are ready to enter the grid and earn profit. As an early entrant in the market, RUBENIUS has the luxury of starting with the low hanging fruit – the high value niche markets. RUBENIUS not
only plans and implements large-scale energy storage projects, it also participates as an investor. Pioneering projects in these markets establish a technology track record, which is needed to convince conservative grid operators to adopt storage in other parts of
the world.
Figure 2: Artist representation of RUBENIUS’s “Energy Storage Warehouse” in Baja, Mexico. Image from RUBENIUS.
Through working to transform the modern grid into one that is smaller, more efficient, more environmentally friendly and better
suited to handle renewable sources of energy, RUBENIUS is providing a way forward. RUBENIUS is doing more than adding energy
storage to the grid; it is using energy storage to rethink the basics of grid design.
Looking Ahead
Although RUBENIUS is very busy with its Abu Dhabi and Baja, Mexico projects, it is eyeing growth in several emerging markets, including China. Many of the key benefits realized under RUBENIUS’s “peak to average” concept ring true in the Chinese market.
China is faced with growing power shortages, fuel shortages, rising greenhouse gas emissions, an overtaxed transmission and distribution system and renewable energy integration issues. All of these problems can be addressed by RUBENIUS’s “peak to average”
concept. When considering the alternative – continued coal power plant build up, increased curtailment of wind power, factories
shutting down due to power shortages, and an increasingly inefficient power grid – the case seems strong.
As a technology agnostic company, RUBENIUS is constantly evaluating new and upcoming technologies. There will be opportunities for Chinese and international energy storage producers to work with RUBENIUS, provided that they can meet RUBENIUS’s production specifications and reliability standards.
Realizing a distributed network of energy storage systems, however, is not trivial. Through its Abu Dhabi project, RUBENIUS has
encountered and worked through a number of engineering challenges that have required solutions “that extend way beyond the
box,” according to Senior Vice President Jacob Rikard Nielsen. RUBENIUS is hoping to use its knowledge, experience, and creativity
to help electric utilities skip these growing pains and catalyze growth in their domestic market.
The Value of Energy Storage
Energy storage increases the utilization of assets at all levels of the grid. It minimizes the need for generation, transmission and
distribution upgrades. It also boosts the profitably of power production by allowing existing plants to provide more energy while
using less fuel and producing less emissions. RUBENIUS is proving that energy storage can transform overbuilt, inefficient grids into
ones that are smaller, smarter and less wasteful.
-The CNESA would like to thank Jacob Nielsen of RUBENIUS for the interview upon which this article is based
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Wind Power Development Driving Need for Energy Storage
During the “Eleventh Five-Year Period,” China’s installed wind power capacity grew rapidly. By the end of 2010, total installed capacity reached 44,773 MW, surpassing the U.S. to become number one in the world. According to China Electricity Commission
statistics, grid-connected capacity reached 29,560 MW – 32 times the 2005 capacity. This amounts to a compound annual growth
rate close to 100%. In looking at China State Grid press releases, grid-connected wind power capacity is expected to reach 100 GW
in 2015. Furthermore, wind power development will be concentrated in eight wind power bases, each with an installed capacity
greater than 10 GW. These wind power bases are Hebei Province, Eastern Inner Mongolia, Western Inner Mongolia, Jilin Province,
Jiangsu Province, Shandong Province, Jiuquan Prefecture in Gansu Province and Kamul City in Xinjiang Autonomous Region.
Unresolved Issues
The proliferation of wind power on the Chinese grid has exposed several problems. In looking at data concerning 2010 wind development, it is easy to see that
only 66% of installed wind capacity has been grid-connected. China State Grid is
working quickly to resolve this problem and improve its grid connection process.
In addition, there have been a number of power security issues resulting from
wind farms unexpectedly tripping off the grid. During the first half of 2011, China
experienced over 35 wind power fault events. The six largest events amounted to
3848 turbines dropping off the grid. For example, on April 17 th, 702 wind turbines
dropped off the grid in Gansu and 644 wind turbines dropped off the grid in Hebei.
These events caused hundred of MWs of generation to suddenly drop off the grid
and threatened the stability of the national power system. The lack of low voltage
ride-through capability for most grid-connected turbines in China has been given
as the primary cause of these events.
Worker Connects Wind Farm in Anhui Province. Image
from China Daily
The nature of wind power production has increasingly frustrated power producers and grid operators. In general, wind produces
power countercyclical to load – it produces best at night when power demand is low. Because the Chinese grid is primarily composed of large coal-fired power plants that have high base load outputs, the combination of peaking wind farms and base load coal
plants leads to an excess of generation at night – causing grid operators to curtail wind power. This problem is especially significant in regions that rely heavily on nuclear and cogeneration plants, which have a base load output even higher than coal-fired
plants. In addition, thermal plants operating near minimum load have very poor ramping capabilities and struggle to counteract
wind’s variable output. This exacerbates power quality issues. Without a means to shift power generated at night to peak load
times (via energy storage) these problems will likely worsen.
Finally, grid operators and dispatch authorities have been increasingly confronted with the variable nature of wind power output.
Coal-fired power plants are struggling to counteract the variation in wind farm power output. Although wind power production
forecasting technology can help, it is generally considered too immature to represent an adequate solution. The inability to
smooth out wind power output has led to lower power quality in regions of the grid with a high wind power penetration.
Policy Action
To address the above problems, China’s regulatory bodies have released several new policies. The National Energy Administration
issued “Interim Wind Power Forecasting Measures” this June. According to this policy, all grid connected wind farms must install
wind power forecasting systems and regularly submit reports to the appropriate dispatch authority by January 1, 2012. The NEA
also issued the “Large-scale Wind Power Technical Specifications and Standards” this August, which contains 18 new wind farm
standards. Although the details of the 18 new standards have not been publicly released, it is known that they will cover large-scale
wind farm development, off-shore wind development, wind turbine status monitoring, power quality, and wind turbine and related
equipment manufacturing. More specifically, these standards put penalties in place for wind farms that drop off the grid as well as
extend forecasting guidelines from 48 to 72 hours. Finally, the State Electricity Regulatory Commission carried out national wind
farm inspections this August. The results of these inspections will guide future regulation policy beyond the recently released
measures.
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Wind Power Development Driving Need for Energy Storage
These measures are expected to quickly and significantly transform China’s wind power development. According to the NEA’s Deputy Director Liu Qi, upcoming changes to China’s “Renewable Energy Law” will force grid operators change their practices in order
to better utilize power generated from wind farms. Such a policy would implore grid operators to find new ways to speed up their
grid connection process and minimize wind power curtailment. It should also serve to boost revenues for wind farm operators.
Industry Response
A number of research programs are already underway in order to meet these newly declared standards and prepare for upcoming
policy releases. With respect to wind turbine manufacturing, many of China’s largest producers have shifted their focus to larger
permanent magnet direct drive wind turbines, which offer superior LVRT performance over doubly-fed induction turbines. With
respect to transmission, China State Grid is building ultra-high voltage transmission lines across the country. Through connecting
wind farms to a larger grid, State Grid expects to more than double the amount of wind power the grid can withstand without compromising power quality. Finally, power producers are investigating energy storage as a means of improving power quality, adding
LVRT capability, avoiding power curtailment and improving the accuracy of their wind power production forecasts. China Guodian
is the first of the major five power producers to launch a large-scale energy storage demonstration project.
Recently released measures should accelerate the development of energy storage. Wind power providers that cannot bring their
power forecasts within defined accuracy standards or solve their LVRT problems in time to avoid penalties will find energy storage
an increasingly attractive solution. In a limited sense, these measures will act as subsidies for energy storage because they will
drive up the value of the services energy storage can provide.
The Need for Storage
A 2008 report released by the American Wind Energy Association and the National Renewable Energy Laboratory concluded that as
wind penetration increases, energy storage will eventually be required to ensure the stability of the electric power system. In several part of the world, including California, the critical penetration level is expected to be around 20% of installed power capacity.
In evaluating this critical percentage, one must consider the correlations in power production between different grid-connected
wind farms, the nature of the wind resources in the regions (average speeds, variability) and the dynamic performance of generation providing frequency regulation services. In China, this percentage will likely be lower because its generation is primarily composed (73.43% of installed power capacity) of coal-fired power plants, which are not nearly as flexible as California’s combined cycle gas turbines. Even though China’s national wind power installed capacity makes up only 3.06% of the total grid, it is highly concentrated in several regions, some of which are expected to exceed 20% capacity in 2015. For example, in western Inner Mongolia,
the installed wind capacity will reach 20 GW in 2015, accounting for ~20% of installed power capacity. The need for energy storage
in this region is very near.
The energy storage community should closely track wind turbine manufacturers’ and power producers’ reaction to China’s latest
round of wind power standards as they are almost certain to push the need for energy storage.
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Technology Insights (Eos Energy Storage’s Zinc Air Battery)
The upcoming wave of new energy storage technologies promises drastically reduced costs without compromising system performance and reliability. Among these technologies, the zinc air batteries being developed by Eos Energy Storage stand apart. They
boast a low initial cost of $160/kWh and impressive performance including a high system-level volumetric energy density (200 Wh/
l) and long lifetime (10,000 full cycles or 30 years). At this price and performance, zinc air batteries will represent not only a strong
competitor to other energy storage systems but also to incumbent grid technologies, most importantly the gas turbine plants currently used to meet peak load in much of the world.
History
Zinc air batteries have been around for over 100 years. In the 1930’s, primary (non-rechargeable) zinc air batteries were used for
long duration, low power applications like railway signaling, navigation buoys, and remote communications. In the 1970’s zinc air
technology evolved due to increased interest in fuel cell research. The thin electrode zinc air batteries that resulted are still used
today in hearing aids, pagers and medical devices – all of which take advantage of zinc air batteries’ high energy density and low
cost.
Despite over 100 years of development, currently available zinc air batteries have one very large setback: they are not rechargeable. This zinc anode reacts with oxygen to create zinc oxide and is essentially used up. This is where Eos Energy Storage’s innovations come into play – they have found a cost effective and reliable way to make zinc air batteries rechargeable.
Eos’ Innovations
Eos Energy Storage’s zinc air technology was patented in 2008 and has been under development by Eos since 2004. Over this
timespan, Eos has confronted and overcome many of the problems stifling other developers of metal air batteries. Eos has found
innovative solutions to the following problems:
◆
◆
◆
◆
Air electrode clogging due to the formation of carbonate from CO₂
Metal dendrite formation that ruins the anode during replating
Membrane fragility
Electrolyte drying up over repeated use
Compared to other batteries, the raw materials used for zinc air batteries are cheap, relatively abundant, and environmentally benign. China is the number one producer of zinc in the world, accounting for around 25% of the world’s total production. In addition, zinc is so cheap compared to other metals that, in 1982, the US began making pennies primarily out of zinc to cut costs
(pennies are 97.5% zinc).
Operation
Eos’ zinc air technology secrets are well guarded. However, looking at the basic operation of a non-rechargeable zinc air battery
lends a good deal of insight. A simple, primary zinc air cell consists of an anode made up of a zinc powder in contact with a metal
current collector, an alkaline electrolyte, a membrane, and a cathode that can extract oxygen from the ambient environment.
Please see Fig. 1.
Figure 1: Cross section of non-rechargeable zinc-air battery. A:Separator, B: zinc anode and electrolyte, C: anode can D: insulator ,
E: cathode can F: air hole, G: cathode catalyst and current collector, H:air distribution layer, I: membrane
The discharge reaction begins when oxygen enters through the holes in the cathode and interacts with the electrolyte at the membrane to form hydroxyl ions (OH-). These hydroxyl ions then interact with the zinc powder to form zinc hydroxide and free
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Technology Insights (Eos Energy Storage’s Zinc Air Battery)
electrons that generate current. Finally, the zinc hydroxide decays into zinc oxide, H 20 and hydroxyl ions. The net effect of this
reaction is to combine zinc and oxygen to produce zinc oxide and electricity.
Zinc Air Battery Reactions
Anode Reaction:
Zn + 4OH- → Zn(OH)42- + 2e- (Eo=-1.25)
Fluid:
Zn(OH)42- → Zn) + H2O + 2OH-
Cathode Reaction:
1/2 O2 + H2O + 2e
Overall:
2Zn + O2 → 2ZnO
-
→ 2OH- (Eo=0.34)
In order to charge a zinc air battery the Zinc oxide must be returned to Zinc and the oxygen must be liberated from the cell. In early zinc air fuel cell designs, spent zinc oxide was removed and replaced by fresh zinc through a mechanical process.
Eos Energy Storage uses a different approach. Its batteries are electrically rechargeable; they directly plate the zinc back onto the
anode during the charging process. Eos uses its proprietary electrolyte control system and electrolyte additives to ensure that this
replating process results in a smooth, even distribution of zinc across the anode. Eos’ battery also does not use a membrane. These and over 100 other innovations covering cell configuration, cathode design, materials and system operation contribute to Eos’
patent portfolio.
Recent Developments and Market Opportunity
Eos Energy Storage is currently developing a 1MW/6MWh battery that will fit into a standard ISO 40’ shipping container. It has
several projects in the pre-development phase. Its prototype cells have already exceeded 1500 round-trip cycles (and counting…)
at 100% depth of discharge, the largest number ever achieved by a metal-air battery; and Eos anticipates that its commercial
batteries should last for as many as 10,000 6-hour cycles (which equates to nearly 30 years). Beginning in 2012, Eos will begin manufacturing these systems for pilot projects at an initial cost of $1000/kW or $160/kWh. By the end of 2013, Eos expects to be manufacturing at full commercial capacity. Battery costs will likely fall below $160/kWh as Eos realizes benefits from large-scale manufacturing and performance advances from its R&D work.
Zinc air batteries are ideally suited to high energy applications. According to President Steve Hellman, Eos sees opportunities in
three main areas:
Electric Utilities: Power support for a number of grid-scale applications including frequency regulation, peak load reduction,
power quality, and renewable energy integration.
Commercial End Users and Distributed Energy Providers: Large commercial buildings, campus environments, military bases, and factories are increasingly focusing on “green energy” solutions that include distributed generation and energy storage.
Electric Vehicles: Zinc air batteries could give EVs a longer operating range at a lower cost than lithium ion batteries. For
example, a 100kWh Eos battery-powered EV could provide greater than a 300 mile range for the same cost as a gasoline
powered vehicle.
Eos Energy Storage has ambitious plans for the global market. Eos is working with strategic partners that support them in manufacturing, system operation and management, project finance, and international market development.
If Eos Energy Storage can realize its ambitious projected cost and performance goals, its solution will likely find its way into many of
the world’s electricity markets, not the least of which: China’s.
- The CNESA would like to thank David Shpigler of Eos Energy Storage for the interview upon which this article is based
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China’s Generation Makeup
The performance and makeup of generation strongly dictate the benefits and consequently the value provided by energy storage
systems. Previous reports that quantify the value of energy storage have focused on segments of the US grid strongly dissimilar to
the Chinese grid. In order to understand and quantify the value of energy storage on the Chinese grid, generation makeup must be
taken into account. This article provides a brief overview of the key differences that distinguish and, in many cases, elevate the
value of energy storage in China.
Generation can factor in several ways:
Direct cost comparison - large scale energy storage can represent an alternative investment to new generation build up
Competition in ancillary service market - the value of energy storage for frequency regulation depends on the responsiveness
and efficiency of the generation competing in markets that have pay-for-performance standards
Intermittent or variable generation–a high penetration of wind and solar increase the need for energy storage’s power stabilization services
Peak performance–certain types of generation, like wind, produce limited power during peak load times or are not available to
provide ancillary services
Off-peak performance – certain types of generation, most notably nuclear and cogeneration thermal plants, have high baseload power outputs. This leads to wind curtailment.
Emission Reductions – the reductions in CO2, SO2, and NOx emissions provided by energy storage depend largely on the type of
generation used to charge the storage system, and in some cases, the generation that is being replaced
In the US, energy storage is most often compared to natural gas-fired generation, which is much more flexible with regard to ramping capabilities. Combined cycle gas turbines have efficiencies over 50%, much lower emissions, and can ramp up and down quickly
to more accurately follow load. As shown in Fig. 1 and 2, China has very little natural gas generation.
China Installed Power Capacity 2010
U.S. Installed Power Capacity 2009
Figure 1: Data from China Electricity Commission
Figure 2: Data from U.S. Energy Information Agency
In 2010, natural gas made accounted for2.7 % of the power capacity and 4% of electricity generation. Natural gas-based electricity
generation has enjoyed limited adoption due to limited natural resources, lacking infrastructure and cheap coal resources. However, the government has recently started pushing for more natural gas-based generation. In this vein, China is building several new
gas pipelines which are serving to rapidly boost consumption. The Twelfth Five-Year Plan calls for natural gas-based generation to
supply 8% of China’s electricity by 2015.
In China, coal is king and will continue to reign for the foreseeable future. Over the last five years, China brought online a coal electricity production capacity equivalent to the US’s total installed capacity – giving it the largest fleet in the world. Coal accounted
for 70% of power capacity (665 GW) and 83% of electricity generation in 2010. According to IEA predictions, China is expected to
add 1344 GW of coal-fired generation by 2030.
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China’s Generation Makeup
This coal generation build up is necessary to meet rapidly rising power demand. China’s electricity consumption grew 14.6% from
2009 to 2010 to 4.19 trillion kWh. Installed power generating capacity also grew 10.7% to 962 GW. Considering that China’s electricity consumption per capita is around ¼ of the U.S. and ½ of the European Union average, there is still a lot of room for growth.
The efficiency of coal plants on the grid is expected to increase significantly over the next twenty years as new large scale supercritical (SC) and ultra-supercritical (USC) plants replace aging subcritical plants. Supercritical and ultra-supercritical coal plants have
an efficiency around 40-45% compared to 25-35% for a conventional subcritical coal plant. According to the IEA, the growing use of
this technology is expected to boost coal-fired power plant efficiency from 32% in 2005 to 39% in 2030. Figure 3, show projected
heat rate reductions based on EIA data.
Figure 3: Data based on two EIA 2006 Reports
This new wave of advanced coal plant build up has been aided by strong government support and low production costs. In 2006,
the government ordered that all new coal-fired power plants over 600 MW apply SC or USC technology. It also pushed for the closure of older, less efficient coal fired power plants (11 GW shut down in 2010). Building SC and USC plants in China is significantly
cheaper than in the US or Europe. For example, the four 1000 MW USC units at the Yuhuan Power Plant cost 14.5 billion yuan($2.2
billion), equivalent to 3625 yuan/kW ($540/kW). Other reports place the average SC and USC upfront capital costs at 4,500 RMB/
kW ($700 USD/kW). Representative cost, efficiency and emission figures are included in Table 1.
Key Figures for China’s Coal Generation Plants
Generation Type
New Capacity
Since 2006 (GW)
% Total New
Coal Capacity
Average Cost per
kW (in RMB)
Thermal Efficiency (%)
Emissions Intensity
(t CO2/MWh)
Subcritical
196
34.4
4063
20-36
1.53-.87
Supercritical
257
45.2
4538
41
.76
Ultrasupercritical
116
20.4
4851
42-43
.75-.73
Total
569
100
NA
NA
NA
Table 1: The information in this table is from Appendix E of the Australian Government’s Carbon Emission Policies in Key Economies report. In most cases this information was extrapolated from IEA reports.
Energy storage will work with these new coal-fired plants in several respects.
First, it will compete with these plants in the frequency regulation market, which is particularly needed in regions with high wind
penetration. While SC and USC plants have high ramping capabilities (~7% of rated capacity per minute), they are most commonly
operated around 1% in order to avoid wear. Compared to high-power energy storage systems, these plants have slower reaction
times and cannot quickly change direction, which causes them to often provide regulation in the counterproductive direction, adding to the overall regulation requirement. In addition, energy storage can help to drastically lower CO 2 emissions. According to
KEMA’s Emissions Comparison for a 20 MW Flywheel-based Frequency Regulation Power Plant report, a “representative” coal-fired
power plant providing regulation service (20 MW worth) over a twenty year lifetime will generate between 230,000-517,000 tons
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China’s Generation Makeup
more CO2 emissions than a flywheel-based energy storage system. Assuming a carbon price of $20/ton, this amounts to $4.6 –
10.3 million in non-discounted carbon costs over a twenty year timespan.
Second, more efficient plants can be used to charge high-energy energy storage systems that can replace generation from less efficient plants during peak load. Assuming 30% subcritical plant efficiency, 45% USC plant efficiency, comparable transmission losses
and 90% round-trip AC-to-AC efficiency for an energy storage system, energy storage can be used to create a “virtual power plant”
with 40.5% efficiency. This amounts to 35% increase in efficiency. This “virtual power plant” approach serves to drive down emissions, fuel usage and the need to build up more generation to match peak load.
Third, energy storage can be used to boost SC and USC availability during peak load. SC and USC plants not providing frequency
regulation and other capacity-based ancillary services can use a larger portion of their capacity to provide energy during peak load
times. This will also boost plant efficiency and extend plant lifetime.
Additional Types of Generation
Currently, 26.5 % (255 GW) of China’s generation capacity is composed of non-fossil based generation. Over the next five years,
China plans to reach 110 GW wind, 10 GW solar, 331 GW of hydroelectric and 40 GW nuclear installed capacity, which will account
for 33% of the total projected generation mix (1350 projected total). Although coal will make up a smaller portion of the generation mix, it will continue to provide more than 70% of China’s electricity because it has a much higher capacity factor than wind,
solar and hydro.
It is well documented that energy storage can provide much needed power stabilization services for variable sources of generation
like wind and solar. Although these sources currently account for less than 10% of total generation, there are certain regions with
significantly higher penetrations. In Liaoning, Province, wind is expected to exceed 20% of energy consumed by 2015.
With respect to hydroelectric power, China leads the world in installed capacity and will continue to develop new projects. However, droughts this summer led to widespread power shortages and exposed the vulnerability of a highly hydro-reliant grid.
Looking Forward
To further evaluate the value of energy storage in the Chinese market, generation makeup and performance must be studied in
greater detail and on a smaller scale. However, one point that emerges from this surface-level overview is that previous studies
that compare natural-gas based generation and energy storage only loosely apply to the Chinese market.
The value proposition for energy storage in a strongly coal-based grid should be higher than one that utilizes a larger portion of
natural gas based generation. When compared to natural gas-based generation, coal is less efficient, produces more greenhouse
gas emissions and has lower ramping capabilities – it is less competitive with energy storage on almost all fronts. This creates a
huge potential for energy storage to realize greater efficiency gains and emission reductions on the Chinese grid.
It is clear to see that coal-fired power plants will play major role in China’s generation makeup for the foreseeable future. Through
finding creative ways to maximize the efficiency of China’s coal-fired power fleet, energy storage integrators can help to minimize
the environmental impact of China’s substantially coal-based power system. This article provides one example of how energy storage can be used to shift load away from older subcritical coal-fired power plants while maximizing the output and efficiency of the
latest supercritical and ultra-supercritical power plants. The efficiency gains and consequently the emission reductions and fuel
savings from this approach are substantial.
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China Guodian to Build 5MW/10MWh Energy Storage Plant
On August 26th, 2011, power producer China Guodian announced that it
will build a 5MW/10MWh lithium ion energy storage system at the
Tangfang Wind Farm in Jinzhou, Liaoning. Representatives from
Guodian’s Technology and Environment Group and Guodian’s Wind
Development Company signed a contract at the Technology and Environment Group Central research building to mark the occasion.
The Tangfang wind farm is a 49.5 MW wind farm located in Jinzhou,
Liaoning. It is comprised of 33 1.5 MW wind turbines. The energy storage system will represent approximately 10% of the wind farm power
production capacity. The Liaoning grid authorities have been contemplating establishing a 10% energy storage requirement for new wind
farms, so this agreement is not by chance. Both Guodian and the Liaoning division of China State Grid believe 10% will strike the optimum
balance between wind and energy storage. The specifics of the energy
storage system have not been announced. However, it is understood
that it will be lithium ion based – Guodian has already been in talks with
several well known domestic manufacturers.
The Tangfang wind farm and energy storage project will be China’s first
storage project to concentrate on the generation side – previous projects have all been conducted by grid operators and focused on transmission related issues. It is also the first wind and energy storage project to be built by a power producer in China. Guodian’s Technology
and Enviroment Group Chairman Li Hongyuan noted that energy storage technology development and deployment is an important part of
China Guodian’s “Twelfth Five-Year” development plan. Previously this
year, Guodian completed an energy storage, solar, and water desalination micro-grid project on East Fushan Island. This newest project announcement gives further evidence to Guodian’s strong commitment to
the development of energy storage.
able energy installed capacity has grown 48% annually. As of June
2011, Guodian had a total installed generation capacity of 98.5 GW, of
which 20.4% is from renewable energy sources. This gives Guodian the
largest percentage of installed renewable power capacity out of all the
power producers in China. Moreover, wind power has become the
main driver of revenue growth and profits. Since 2006, both total revenue and profits from Guodian’s Energy and Environment Group sustained annual growth rates above 50%, with cumulative revenues exceeding 20 billion RMB. In addition, the Longyuan Power Group, which
owns and operates a good deal of Guodian’s wind farms, generated
7.069 TWh, an 44.45% increase over the same period the year before.
This led to 3.206 billion RMB in wind power business revenues, a 37.6%
increase.
As Guodian continues to add more wind and other sources of renewable generation to its portfolio, the need to better integrate and utilize
these sources has also grown. In Jilin Province, Guodian is implementing a wind, solar, and coal generation integration project. This
project will combine 200MW of wind, 20 MW of solar and a 980 MW
coal-fired power plant. This system will address the intermittency and
variability issues inherent to wind and solar. It will stand as a contrast
to Guodian’s renewable energy and energy storage integration projects.
China’s recently announced plan to institute a national carbon trading
system by 2015 will certainly help energy storage in this comparison.
Although other Chinese power producers have a lower proportion of
wind power resources, their installed wind power capacity has also
grown rapidly over recent years. For example, Datang Group had an
installed wind power capacity of 5.0517 GW by the end of 2010. There
are indications that Datang may build a CAES project in Inner Mongolia.
As power producers, like Guodian and Datang, continue to build out
wind and solar, the need for energy storage will become more proGuodian’s interest in energy storage is closely related to the constitu- nounced. These companies are well aware of this fact and have already
tion of it generation assets. Over the last three years, Guodian’s renew- begun taking the first steps towards wide-scale energy storage use.
Prudent Energy To Supply 2MW/8MWh System For National Demonstration Project
On August 7th, Prudent Energy and China
State Grid announced their upcoming project
collaboration at a contract signing ceremony.
As part of this collaboration, Prudent Energy
will supply a 2MW/8MWh vanadium redox
flow batter energy storage system for a largescale wind solar and energy storage demonstration project in Zhangbei, Hebei.
The National Wind Solar and Energy Storage Demonstration Project is
being conducted by Huabei Grid Company (a division of State Grid). It is
part of China’s “Golden Sun Demonstration“ program and China State
Grid’s first stage of smart grid projects. In total this project calls for 500
MW of wind 100 MW of solar and 110 MW of energy storage to be built
during the Twelfth Five-Year Period (2011-2015). Currently, this ambitious project is in its first stage of development, which calls for the integration of 100MW of wind 40Mw of solar and 20MW of energy storage.
Out of the 20 MW of energy storage, 14 MW of lithium ion based projects have already been announced (see June Newsletter). Counting
Prudent’s latest announcement, the declared project total is up to 16
MW.
dent’s flow battery system was used to test energy storage and wind
power integration.
Prudent Energy was founded in 2007 and acquired the world’s leading
vanadium redox battery technology when it acquired Canadian VRB
Power Systems assets in 2009. In China, there are several other upcoming vanadium redox manufacturers; however, they have yet to create a
MW-scale vanadium redox flow battery system. Through the end of
2010, Prudent Energy has invested over $40 million to improve its system design and boost its manufacturing capacity to 10 MW per year.
Currently, Prudent Energy produces kW-scale systems for telecommunciations and small scale commercial applications as well as MW-scale
systems for a variety of grid applications. Among the kW-scale systems,
Prudent offers a 5kW/20kWh and a 5kW/40 kWh system. The MWscale systems are constructed from 175 kW modular systems.
Vanadium redox batteries are on the cusp of reaching the commercialization phase. They have been in development for over twenty years
and have been applied to a range of demonstration projects covering
four continents. These projects have demonstrated the technology’s
reliability, versatility and high level of performance. This development
has captured the interest of energy storage project developers as well
Prior to this project, Prudent Energy participated in a 500kW/1000kWh as new entrants to the energy storage market . This latest project andemonstration project with China Electric Power institute (CEPRI), nouncement marks Prudent’s largest energy storage project to date
effectively the research wing of China State Grid. For this project, Pru- and signals continued support from the very important China EPRI.
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ATL Invests in China’s Largest Lithium Ion Battery Manufacturing Base
On September 14th, Amperex Technology Limited (ATL) announced that
it will invest $320 million into it’s Ningde subsidiary in order to build out
its lithium ion battery manufacturing base. This manufacturing base
will produce batteries for electric vehicles, high-end consumer electronics and high-power energy storage systems.
ATL’s Ningde subsidiary, Ningde Amperex Technology, was established
in March 2008. In total, this company is expected to receive over $1
billion to build a manufacturing base covering 500 acres. Construction
for this ambitious project is divided into two phases. This most recent
funding completes the first $600 million phase. Once both phases are
completed, ATL’s base is expected to produce over 500 million batteries
annually with an annual output value of 20 billion RMB. This facility will
have the highest production volume and value out of any advanced
battery manufacturing base in China.
ATL has used TDK’s strong material science background to considerably
improve of its technology. It is reported that ATL’s lithium iron phosphate batteries have an energy density greater than 130Wh/kg, and
power density greater than 2500 W/kg and more than 5,000 cycles.
Ningde is an economic development zone located near the Yangtze
River Delta, Pearl River Delta and Taiwan. It possesses three natural
deep water harbors, which makes it a center for import and export. The
location of ATL’s factory in Ningde obviously signals a strong emphasis
on export based sales. In looking at ATL’s current market outlook, it still
sees huge potential in the tablet PC, smart phone, and other high-end
consumer electronics battery markets. ATL will look to use this Ningde
export base to help it capture greater share in these global markets.
Outside of consumer electronics, ATL has attached equal importance to
batteries for electric vehicles and large-scale energy storage systems.
ATL is also an early entrant in the Chinese energy storage market; it has
five operational projects (two of which are MW-scale), totaling approximately 5MWh, and is currently building a 4MW x 4h energy storage
system in Zhangbei. This brings ATL’s energy storage project total to six,
well ahead many of China’s other lithium ion battery manufacturers.
ATL was founded in 1999. Although headquartered in Hong Kong, it
operates three wholly-owned subsidiaries in China, one in Ningde and
two in Guangdong. ATL is mainly in the business of manufacturing lithium ion batteries, packaging and control systems. In 2005, it was acquired by Japanese electronics giant TDK and currently operates as a
wholly-owned subsidiary, an independent energy division of TDK. In
2011, ATL became a joint venture when it received funding from Chi- ATL’s technology and experience give it an obvious edge over other
nese investment firms New Horizon Investment and CDH Investments. Chinese lithium iron phosphate battery manufacturers.
State Grid Announces Rural Inner Mongolia Micro-grid Project
China State Grid recently announced a rural distributed generation/
micro-grid/energy storage pilot project in Hulunbeier, Inner Mongolia.
This project will include 150 kW of solar (100 kW of central generation,
50 kW of rooftop generation), 100 kW of wind and a 50 kW x 2 h lithium
ion battery energy storage system attached to the grid at a 35kV substation. Energy storage will be used in this system to control voltage and
power fluctuations as well as ensure constant power supply during periods of low generation. State Grid’s goal of this project is to develop a
better technical understanding of distributed generation and micro-grid
systems. State Grid will challenge and develop its theoretical understanding micro-grid systems through practical experience. It should
result in an improved understanding of distributed generation microgrid systems that will aid future rural development projects.
The distribution system is one of the six main parts of the grid as defined under China State Grid’s smart grid concept. Within the distribution system, distributed generation, energy storage and micro-gird systems have been identified as key areas for development. State Grid has
already launched several projects in this pursuit. On December 31st,
2010 a solar powered micro-grid pilot project in Henan Province officially began operation, marking the beginning of China’s micro-grid development. After its success on this project, China State Grid continued to
development more micro-grid projects detailed in the table below.
Place
The projects launched thus far have covered a range of designs, reflecting State Grid’s comprehensive approach and unified planning process. According to China State Grid’s Twelfth Five-Year “Smart Grid
Development Plan,” the Twelfth Five-Year period marks the second
stage of development. During this stage a series of demonstration projects are being launched, which will lay the foundation for the next
phase: the establishment of official standards and the beginning of large
-scale technology deployment.
This current demonstration phase is very important for the future development of the micro-grid model in China. It represents and opportunity for State Grid and related vendors to work out a number of technical issues associated with micro-grid control and operation. It also
affords an opportunity for these parties to find new ways to reduce
their manufacturing and installation costs. Reports detailing these projects will also be used to carefully evaluate the costs and benefits associated with the micro-grid model. Such analysis will then provide a
foundation for government support policies during the next phase of
development. If these projects can successfully demonstrate the value
of a micro-grid based approach to distribution system development,
they will open up many opportunities for micro-grid and energy storage
development in China.
Name
Description
Henan
Henan Distributed Generation Solar Micro-grid Control Pilot Project
PV generation, two 100kW/200kWh lithium iron phosphate energy storage
systems, micro-grid control systems
Xi’an
Xi’an Wind, Solar, EV Charging and Energy Storage Micro-grid Project
A 12 kW wind and 50 kW solar generation system incorporated with an EV
charging station that has 50 kw/100kWh lithium iron phosphate energy
storage system
Hangzhou
Zhejiang Micro-grid Test System
Through this set of five projects, China State Grid is developing a comprehensive monitoring and distributed generation dispatch system that includes
energy storage. The goal is to improve control and dispatch protocols to
better work with smart grid control in order to improve power quality and
reliability on a DG system.
Hangzhou Energy and Environment Industrial Park PV Power Station Project
EV and Energy Storage Station
Hangzhou Rooftop Solar Generation System
Zhejiang Daily News End-user and Solar Project
East Inner
Mongolia
Ergun City Forest Micro-grid Project (actually off-grid)
This off-grid pilot project contains 250 kW solar, 100kW wind, and a
200kW/800kWh li-ion energy storage system.
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Ministry of Industry and Information Technology Announces New Material Industry Policy
On September 7th, the Ministry of Industry and Information Technology’s Deputy Director of the Raw Materials Department Gao Yunhu discussed the upcoming release of the Twelfth Five-Year Plan’s New Material Policy. Under this plan, China will make use of its superior natural
resources to develop its new material industry. According to the ministry’s concept, new materials are those that have properties and capabilities well outside the realm of traditional materials. These include materials based on rare earth minerals, high strength light alloys, high
performance steel, new membrane materials, new EV battery materials,
and carbon fiber composite materials.
According to Gao Yunhu, “During the Twelfth Five-Year Period, our
country’s estimated total new material total output will reach two trillion yuan and the annual rate of growth will exceed 25%. By 2015, we
will establish a larger, independently innovative and complete industry
system. By 2020, our new material industry will become a leading economic industry, producing primary goods capable of satisfying the nation’s economic and defense needs.”
includes 400 types of new materials as well as each material’s performance standards, related production equipment and main applications.
This rise of the new material concept began during the 2008 global financial crisis when countries around the world began to search for new
sources of economic growth. New materials became a strong focus of
China’s economic recovery plan. In 2010, the new material industry was
declared a strategic emerging industry. This makes sense as the new
material industry supports the development of other strategic emerging
Also according to Gao, the new plan will clearly present nine measures industries (like electric vehicles), promotes the transformation of tradito accelerate the development of the new material industry. These tional industries and enables the country’s great engineering projects.
include strengthening policy guidance and industry control, creating
financial and tax support incentives, establishing a robust investment The development of energy storage technologies is closely related to
mechanism, improving industry innovation, cultivating core enterprises, the development of new materials. Lithium ion battery manufacturers
improving industry standards, more effectively utilize and protect natu- will obviously be eligible to receive strong government support as they
ral resources and to deepen international cooperation exchanges.
continue to develop novel cathodes, anodes and electrolytes for electric
vehicles. In addition, the MIIT’s call for more development of novel
The formal written version of this plan was released (not publicly) this membrane materials should help support domestic flow battery manumonth to coincide with the release of the ministry’s “New Material facturers in their research efforts. Both of these developments have
Industry Twelfth Five-Year Catalogue of Important Products,” which obviously implications for the Chinese energy storage market.
CNESA’S Second Salon Reveals Insight Into EV and Energy Storage Applications in China
On September 16th, the China Energy Storage Alliance hosted its second Salon. At this event, XJ Group (a wholly owned subsidiary of State Grid)
Chief Engineer Chen Tianjin presented on “The Application of Energy Storage in an EV Recharge/Battery Swap/ Energy Storage Station.” Mr. Chen
provided an in depth look at the XJ Group’s work on a recently completed 8 MW bus and EV recharging station in Qingdao.
Similar to the first Salon, this event was well attended by a healthy mix of energy storage manufacturers, power producers, grid operators and
researchers. Participants included Dr. Xuehao Hu of the China Electric Power Research Institute and CNESA members: Supreme Power Systems,
Prudent Energy, Soaring Electric, A123 Systems, ZBest Holding Co., Liyuan, Guodian United Power, EDF, Keytone Ventures and Guodian Nanjing
Automation Co. Other attendees included executives and researchers from Tianjin BAK, Better Place, Citic Guoan MGL, NICE, Schneider Electric,
Honeywell, Dongfang Electric and KEMA. The meeting was presided over by CNESA Managing Director Shore Lin.
Mr. Chen Tianjin’s introduction of XJ Group’s engineering work and views on the battery recharge/energy storage station model domestically and
abroad spurred an interesting discussion concerning the current state of battery technology and the best way to develop EV infrastructure. As
another representative from the battery swap industry, Quin Garcia of Better Place shared some insight into Better Place’s approach and its view
on the current state of technology. This in turn spurred a lively discussion concerning whether EV battery technology can withstand the abuse of
fast-charging and V2G operation. Dr. Xuehao Hu of the CEPRI provided some insightful examples to help guide this discussion. Battery producers,
investors, EV station operators and grid operators all had their chance to share their thoughts on these important issues.
The CNESA would like to thank China Guodian Corporation for hosting this event at its meeting center.
The China Energy Storage Alliance will host its next Salon in November. The topic and venue are TBD. If you are interested in participating in our
upcoming events, please contact us at [email protected]
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California Provides First Standalone Energy Storage Subsidy
On September 9th, the California Public Utilities Commission (CPUC)
announced changes to the Self Generation Incentive Program (SGIP).
These new changes effectively expand upon the types of systems eligible to participate in this program to include systems that reduce greenhouse gas emissions. More importantly, these changes allow standalone energy storage systems to receive subsidies for upfront installation costs as well as performance based incentives. This recent change
makes the SGIP the first subsidy-based program for stand-alone energy
storage systems in the world.
the projects upfront costs. Projects under 30 kW should receive the
entire incentive upfront. For systems over 30 kW, payments will be
comprised of a mix of upfront and yearly performance subsidies until
they reach the $2/W maximum. There is no limit on project size; however, there is a $5 million incentive cap.
With regard to performance characteristics, the CPUC requires energy
storage systems to have a minimum discharge period of 2-hours, a capacity factor of >10%, and a service warranty.
Since 2007, the SGIP has been providing upfront
subsidies for the construction of small-scale distributed generation systems with the goal of supporting
the development of distributed generation systems
to reduce peak load. It has contributed to 1,270
projects totaling over 370 MW, significantly contributing to the development of new energy-efficient
generation technologies and helping to save money
by reducing the need to invest in transmission and
distribution infrastructure.
The SGIP program funding was set to expire on January
1, 2011. However, the California Senate passed SB
412, which authorized the CPUC to set new eligibility
guidelines and extended program funding through
2015. The California Energy Storage Alliance (CESA)
played a key role in convincing the CPUC to allow stand
-alone energy storage systems receive funding under
this program; it provided a great deal of commentary
during the CPUC’s deliberations. This decision counts
as a victory for the CESA.
Previously, the SGIP program supplied subsidies to energy storage systems connected to a source of local generation and therefore did not
support stand-alone energy storage systems. As a result, energy storage applications accounted for only eight MWs, or roughly 8% of the
total capacity reserved in 2010.
Direct subsidies for energy storage installations represent one of the
best ways to develop the energy storage market. They serve to recognize the benefits, like emission and peak load reductions, that energy
storage can provide but cannot be properly compensated for under
current market structures. In China, the Golden Sun Program, which
provided direct subsidies for PV projects, worked very similarly to the
According to the CPUC’s latest filing, advanced energy storage systems SGIP. As China looks to grow its energy storage industry and stay comwill receive up to $2/W in incentives. Energy storage systems can be petitive in the global market, it should consider an analogous program
stand-alone or paired with solar PV or any otherwise eligible SGIP tech- for energy storage.
nology. The CPUC also calls for SGIP participants to pay at least 40% of
ZBB Energy Receives Key Patent
On September 7th, American energy storage manufacturer ZBB Energy announced
that it has received a patent for the “Method and apparatus for controlling a hybrid power system” relating to its ZBB EnersectionTM Power and Energy Control
Center. This patent covers a hybrid power control system that can utilize power
from many types of renewable generation.
Integrating multiple sources of renewable energy is complicated by the fact that
some sources of generation like solar provide DC power while other, like wind,
provide AC power. Energy is lost when power is converted between AC and DC so
minimizing the number of conversions necessary to integrate multiple sources of
power and an energy storage system is quite valuable. ZBB’s system, which is
configurable, modular and scalable, optimizes the supply of each generating
sources to minimize losses due to excess conversions.
In addition to ZBB’s zinc bromine flow batteries, this hybrid control system can work with other types of energy storage. According to Eric Apfelbach, President and CEO of ZBB Energy, "The issuance of the patent strengthens our proprietary market position for the application of this technology. The ZBB EnerSection™ can be used with a variety of storage technologies, because the optimal solution for a given application may be a
hybridized set of storage solutions. We work with numerous manufacturers of a variety of storage technologies to ensure delivery of the best
platform.”
2011 has been a very active year for ZBB Energy. In January, it acquired Tier Electronics LLC to expand its offerings of inverters and power control
systems. It announced several MW-scale projects, including two military micro-grid demonstration projects. In April, ZBB Energy signed a joint
development agreement with South Korea’s Honam Petrochemicals to develop and manufacture ZESS V3 flow battery systems for the Korean and
Southeast Asian market. In August, ZBB formed a joint venture with Anhui Xinlong Electrical Company and Wuhu Huarui Power Company to target the Chinese market. Finally, this September, ZBB made its entry into the data center market. For this project, ZBB will work with Universal
Electric to provide and interrupted power supply and renewable energy integration platform for a 380V DC powered datacenter.
In addition to expanding its global reach and list of participating projects, ZBB is also expanding its targeted applications. It is pushing the development of energy storage for commercial building applications that include power backup, renewable energy integration, peak shaving, demand
charge avoidance and DC micro-grid operation. By not limiting itself to one type of storage technology, ZBB Energy is looking to leverage its power control system experience to establish itself as the world’s leading large-scale and small-scale energy storage+ micro-grid specialist.
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NUVVE pushing the limits of V2G Development
While the price of lithium ion batteries for electric vehicles and energy
storage will certainly come down over the next several years, there is
another way to make lithium batteries more economical – maximize the
benefits they can provide over their lifetime. In this vein, car manufacturers and power control system providers are actively investigating
“second life” and “vehicle-to-grid” (V2G) applications as additional
sources of revenue. One of the most interesting and potentially profitable business models is being developed by NUVVE.
Unlike other V2G approaches that are looking to use EVs batteries to
provide power to EV owners’ home, NUVVE wants to use a network of
grid connected EVs to participate in the frequency regulation market.
In this way, it will be directly competing with large-scale grid gridconnected energy storage systems. NUVVE provides the hardware,
software and system controls for connecting the utility infrastructure.
These systems allow NUVVE to aggregate the capacity of all the EVs
connected its network and uses this capacity to bid into the frequency
regulation market. The batteries are then dispatched by NUVVE’s central operating center, which sends instructions every two seconds.
Upcoming EVs that feature bidirectional inverter capable of working
with NUVVE’s system include the 2012 Mitsubishi MiEV, the 2012 Daimler Smart E, and the BMW Mini E.
NUVVE, which uses V2G aggregation technology developed at the University of Delaware, has already demonstrated this concept in a field
trial with PJM that used 9 cars and lasted two years. According to
NUVVE’s website, it was determined that each car could earn $2,500 a
year amounting to $20,000 USD over the battery pack’s 8-year warranty
lifetime. After NUVVE’s operational costs are taken into consideration
the present value of EV owner compensation will reach up to $10,000–
accounting for a large portion of the battery pack’s upfront cost.
This June, NUVVE announced that it will begin a 30 car pilot project in
Denmark in conjunction with NRGi, Denmark’s fourth-largest utility.
Denmark hopes to get 50% of its power from wind by 2025, so this in
and ideal entry market. As wind penetration increases beyond 20% the
regulation market will need to grow several times to counter power
fluctuations. NUVVE hopes to help meet Denmark’s fast-growing frequency regulation need.
Critics have expressed a number of questions concerning the viability of
this business model. With respect to negatively impacting battery lifetime, NUVVE argues that the overall effect will be less than 5% and that
their control algorithms are designed to limit battery wear. With respect the ensuring that EV batteries are sufficiently charged to meet
their owner’s needs, NUVVE points out that charge and discharge durations are relatively short and that there is a zero net energy flow over
the course of an hour. Finally, in order for this model to work commercially, NUVVE must control a large number of cars. Overcoming this last
problem largely depends on local government support and consumer
acceptance.
Considering that EVs will be parked 95% of the time and that the collective power capacity of 10,000 grid connected EVs each contributing 10
kW (based GigaOm interview with NUVVE CTO Willett Kempton) is 100
MW, there is certainly a strong potential for this business model in the
US and Europe. In China, however, many regulatory changes must be
made for this service to work. Ancillary services are paid from a central
pool of money contributed by power producers based on how much
energy they provide throughout the year. They will most likely be unwilling to open this market to independent ancillary service providers
that do not contribute to the initial money pool. It also does not work
well with China State Grid’s emphasis on the battery swap method.
Japan Boosts Renewable Energy Support
tric Utilities.” Excluding hydroelectric power, this law set an RPS target
After the failure at Fukushima, the world’s media speculated that Japan
of 1.35% of total consumption by 2010 (12.2 TWh) and 1.63% of electricwould be forced to abandon its nuclear energy developments plan in
ity consumption by 2014 (16 TWh).
the face of strong political pressure. On several occasions, Japan’s Prime
◆In 2008, Prime Minister Yasuo Fukuda issued the “Fukuda Vision” that
Minister Naoto Kan argued for a stronger renewable energy support
set PV installation capacity targets at 14GW for 2020 and 50 GW for
policy, advocating for a 20% RPS by sometime in the 2020’s. On August
2030. An additional goal of this bill was to cost the production costs of
th
26 , he resigned after ensuring that the “Renewable Energy Special
solar panels in half.
Measures Act” was passed by Japan’s diet. This act will help to realize
Kan’s vision by providing the financial incentives needed to accelerate In reviewing the above-mentioned policies, we can better understand
growth in Japan’s domestic renewable energy market.
Japan’s policy approach. The Japanese government has placed considerable emphasis on small scale commercial and residential installations;
According to the provisions of this act, Japan’s electric utilities will be it has also favored solar over wind as it better matches the capabilities
obligated to buy solar, wind, hydro, and geothermal power at prices to of its domestic manufacturers. This latest support government policy is
be fixed by Japan’s Ministry of Economy, Trade and Industry (METI). also expected to also favor the development of solar over wind. BloomThe METI will set specific price targets and related project standards berg notes that this policy is one the first steps towards expanding
and regulations prior to the implementation of this act on July 1, 2012. Japan’s renewable energy industry into a $130 billion market by 2020—
This act will work similarly to a feed-in-tariff but will vary slightly in that it is both a new energy and economic stimulus policy.
the power purchase prices will depend on the type, installation mode,
and scale of the renewable energy projects. It will also not set prices There is also the question of whether Japan’s increasing support for
for residential PV systems as it will defer to the financial support struc- renewable energy will allow it to discontinue the use of nuclear power.
tures already in place.
On his first day as Japan’s new Prime Minister, Yoshihiko Noda noted
that atomic power is needed to save the economy. He is pushing for
Examining previous policies yields insight into the general direction of the timely testing and restart of Japan’s non-operational nuclear fleet.
In the long-term, however, he has vowed to reduce Japan’s reliance on
Japan’s renewable energy plans：
nuclear energy as much as possible.
◆In 1994, Japan enacted a policy to grow its residential PV market and
support the development of its domestic industry. From 1995 to 2005,
this government provided $1.16 billion in total subsidies to support the
installation of 932 MW of solar spread across 253,754 systems. This
policy helped Japan become the world leader in the PV industry.
◆In 2003, Japan declared a nationwide renewable portfolio standard
through “Law on Special Measures Concerning New Energy Use by Elec-
The key to Japan’s renewable energy policy success largely depends on
the as yet unspecified tariffs for solar and wind generation. A high tariff
will rapidly push renewable energy development and will carry with it
many opportunities for energy storage.
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CNESA
Update
2011/11
CNESA
Issue
06 00
Month
09 Year 2011
CNESA
Update
Issue
Month
Industry Trends
Year
About Our Organization
The China Energy Storage Alliance, CNESA, is the first and only energy storage industry association in China. It is a
nonprofit member-based organization, that was founded in 2010 as a sub-committee under China New Energy
Chamber of Commerce (CNECC), the largest renewable group in China.
Our mission is to influence government policy in order to encourage healthy growth of renewable energy through the
use of competitive and reliable energy storage systems.
As part of this mission, we regularly track both technology development and policy directions to provide proposals
and commentary to members of government and the state grid system. We also encourage cooperation between
international and domestic market participants through publications, annual forums, and informal round-table discussions. We use our resources to communicate the most up-to-date market trends to our members, help them find
market opportunities and provide a bridge to investors and government officials in China.
This newsletter is provided free of charge to government agencies and research institutions. However, energy storage industry participants and related companies pay for this service. As such, we respectfully request that you do not
redistribute this newsletter without the consent of the CNESA.
Sincerely,
Shore Lin
Managing Director
China Energy Storage Alliance
Contact Information:
For English, please call or email
Kevin Popper, Industry Research Manager
China Energy Storage Alliance
[email protected]
Suite 5 Floor 12B Tower B
(+86) 1065667066
No. 6 Jianhuanan Rd
Chaoyang District, Beijing, China 100022
For Chinese, please call or email
Liu Wei, Head of Member Relations
[email protected]
(+86) 1065667066
Disclaimer
In the preparation of the information contained in this document, CNESA has endeavored to present information that is as accurate and current as possible from sources believed to be
reliable. However, unintentional errors can occur. Therefore, the information is provided “as is”, without any representation or warranty of any kind, expressed or implied.
Should you discover any errors or misrepresentations, please contact us at the address provided above.
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