Electricity landscape set to witness paradigm shift

Industrial and commercial energy storage will usher in a breakthrough period with a deepening of electricity market reform, which is expected to further widen the peak-valley price difference nationwide, said industry experts.

The integration of industrial and commercial energy storage solutions marks a significant turning point in the energy sector, catalyzing innovations that align with the ongoing market reform initiatives, said Luo Zuoxian, head of intelligence and research at the Sinopec Economics and Development Research Institute.

"As industrial and commercial entities increasingly adopt energy storage technologies, we anticipate a deepening of market reform dynamics, driven by enhanced grid stability, reduced peak demand pressures, and optimized energy utilization," he said.

"The synergy between industrial and commercial energy storage and market reform efforts is poised to revolutionize the energy landscape, fostering a more resilient and sustainable system while unlocking new economic opportunities."

With industrial and commercial players embracing energy storage at scale, Luo said the market foresees a paradigm shift in market structures, characterized by improved efficiency, cost savings, and a heightened focus on decarbonization goals.

New energy storage, or energy storage using new technologies such as lithium-ion batteries, liquid flow batteries, compressed air and mechanical energy, is an important foundation for building a new power system in China, enjoying the advantages of a quick response, flexible configuration and short construction periods.

According to the National Energy Administration, the country had completed and put into operation more than 35 million kilowatts of new energy storage projects as of the end of the first quarter this year, an increase of more than 200 percent year-on-year, of which the installed capacity of lithium-ion battery energy storage accounted for more than 95 percent.

Battery-grade lithium carbonate prices have been steadily decreasing since the end of 2022, further facilitating the rapid development of commercial and industrial energy storage, it said.

The administration recently asked power grid enterprises and dispatching agencies to develop new energy storage grid-connected rules and guidelines to improve the efficiency of new energy storage, while exploring supportive policies for new energy storage, said Bian Guangqi, an NEA official.

Provinces nationwide are also embracing industrial and commercial energy storage solutions, signaling a unified commitment toward enhancing energy security, grid reliability and sustainability goals.

In Anhui, for example, which started implementing the new peak-valley price difference on April 1, the power consumption price difference has further widened, directly driving the construction of enterprise energy storage projects.

Jiangsu is also on course to become the leader of the domestic energy storage market in 2024, with an annual grid connection quantum of more than 10 gigawatt-hours.

Luo said the rapid development of the new energy storage industry has attracted more companies to enter the sector.

The falling cost of lithium carbonate lithium batteries has further led to the falling cost per kWh of lithium electrical commercial energy storage over its lifetime. As a result, end users are more active than ever in allocating energy storage, he said.

Chen Haisheng, head of the Institute of Engineering Thermophysics at the Chinese Academy of Sciences, said energy storage is key to improving the grid's ability to adjust and improve its overall efficiency.

It is expected that in 2024, China's new energy storage installed capacity will reach 30 gigawatts to 40 GW, which means that the country's total installed capacity of new energy storage will double again, he said.

"Energy storage will account for 10 percent to 15 percent of the entire economic volume of the power system, making it a strategic emerging industry worth trillions of yuan," he said.

"Renewable energy storage will be a significant growth driver for new quality productive forces."

Optimistic about the outlook for industrial and commercial energy storage, GCL Group has come up with a large number of high-quality user-side energy storage projects in the country's developed regions such as the Yangtze River Delta and the Pearl River Delta, based on the company's photovoltaic industry chain resource advantages and multiple types of energy supply services.

The company will continue to expand various business models such as demand management, demand-side response, light storage integration and virtual power plants, and increase the development of industrial and commercial energy storage, it said.