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Dec 10, 2021

Analysis of eight scenarios of energy storage application

This paper sorted out several important scenarios of energy storage applications, hoping to help you understand energy storage applications.


1. Microgrid


Microgrid refers to a small power distribution system composed of distributed power supply, energy storage device, energy conversion device, load, monitoring and protection device, etc., which is the main application of energy storage system in China at present. In small hydropower areas, areas with declining power supply capacity, islands without electricity and other power shortage areas, the energy storage system can be independent or cooperate with other energy sources to continuously supply power to important loads when the microgrid loses power supply, which mainly solves the power supply stability and security problems.


Second, new energy vehicles


The number of neVs in China reached 1.8 million by the end of 2017. The development of new energy vehicles is inseparable from the construction of charging infrastructure, but there is a bottleneck in the construction of charging stations in cities. Due to the shortage of power grid capacity, the construction of charging stations will cause high peak load of local power grid, and large-scale access of charging stations and pv will have impact on the power grid. The construction of supporting energy storage facilities is beneficial to improve the quality of local power grid and increase the selectivity of charging station sites.


Three, diesel power supply area


Energy storage technology can replace diesel generators, reducing the cost of generating electricity and reducing air and noise pollution from diesel generators.


Lead battery Renovation project of Golden Sun Project


Since 2009, China has implemented the "Golden Sun Demonstration Project" to support the construction of photovoltaic power stations in China. Energy storage batteries are the supporting technology to promote the grid connection of photovoltaic power generation, while lead-acid batteries occupy the mainstream at that time. With the continuous progress of technology, lithium batteries gradually have cost advantages, and existing energy storage batteries can be used to replace the lead acid batteries in the original project.


Self-construction of renewable energy power stations


Auxiliary renewable energy grid connection, effectively solve the problem of light abandonment, improve economic benefits; Reduce instantaneous power variation and impact on power grid; Track planning and scheduling, improve grid-connected controllability; Improve the accuracy of power generation prediction and improve the friendliness of grid connection.


Due to the high cost of energy storage, even if the investment in energy storage can reduce the amount of abandoned light, the return on investment is still low, and the power station has no strong motivation to actively invest in supporting energy storage. In this scenario, energy storage revenue comes from the income brought by the reduction of power abandonment of new energy power stations, which is attractive to some new energy projects that are connected to the grid in the early stage, have high on-grid price and have power abandonment.


In addition, if China's auxiliary service market mechanism increases the assessment of renewable energy stations in the future, renewable energy stations will have a stronger willingness to support energy storage.


Trading with renewable energy power stations


The energy storage system participates in the paid peak-shaving auxiliary service of power, which helps to make up the shortage of peak-shaving ability of power supply. At noon, the energy storage buys abandoned light power at a low price, and sells it according to the pv feed-in price at night when the power is short, realizing a win-win situation between the energy storage system and the power station. For the old power stations with high electricity price, such a model has strong feasibility.


At present, Gansu province, Xinjiang Province and Shandong Province have issued relevant policies on power auxiliary service, and focus on the construction of peak shaving auxiliary service market. Energy storage users can cooperate with thermal power, wind power or photovoltaic power stations for peak regulation, or provide peak regulation services for the power system as an independent market entity. Energy storage users who participate in peak shaving can conduct auxiliary service transactions through centralized bidding on the peak shaving auxiliary service platform. The peak shaving compensation costs are shared by thermal power plants, wind farms, photovoltaic power stations and hydropower plants according to policy requirements.


In regions where the auxiliary power service market has not been established, the benefits of the auxiliary service providers mainly come from the electric quantity benefits brought by the additional/less generation of units, and the peak regulation costs cannot be relieved. Therefore, it is not economical for energy storage to participate in auxiliary services in these regions.


Seven, electricity load peak adjustment


Peak load regulation refers to energy storage in the way of off-peak power consumption and peak-peak discharge, using peak-valley electricity price difference and market transaction price difference to obtain benefits or reduce users' electricity costs, and at the same time achieve the purpose of flattening users' own electricity load difference and reducing the peak-valley difference of power grid. It also has the function of backup power supply.


Due to the lack of policies on user-side application of energy storage, peak-valley arbitrage has become the only "clear" business model in China's energy storage industry, and it is also a direct or indirect profit model for various applications of user-side energy storage.


This scenario is suitable for enterprise users with high peak-valley electricity price difference, at least above 0.75 yuan /KWh, good user load curve, and load collocation energy storage can better complete intra-day power balance. However, the peak-valley price difference in most areas is low, and the investment payback period of energy storage is long.


8. Frequency modulation auxiliary service


Energy storage system can play a supporting role in power grid by participating in frequency modulation auxiliary services.


The FM market is open in some countries and the bidding mechanism is adopted. Battery energy storage has a high participation rate, such as the United States, but the FM market size is limited.


In China, energy storage is mainly through auxiliary thermal power unit frequency modulation to improve the response speed of thermal power frequency modulation. The business model basically adopts contract energy management, in which the power plant and the energy storage enterprise cooperate. The power plant provides the site, energy storage access and energy storage qualification to participate in the FM market. The energy storage enterprise makes the investment, design, construction, operation and maintenance, and the incremental FM income is shared by both parties.


It should be noted that the benefits of energy storage participating in FM are greatly affected by policy fluctuations.


In conclusion, the domestic energy storage market is still to be developed. With continuous technological breakthroughs and cost reduction, the energy storage market has a promising future.


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