China’s domestic electrochemical storage capacity increased by 72% to 243 megawatts in 2016 compared to the previous year, according to a new report from the non-profit China Energy Storage Alliance (CNESA).
The CNESA’s white paper on the national and global energy storage market, published in English for the first time, said the lion’s share of newly-operating electrochemical ESPs in China last year used lithium-ion (62%) compared to 37% using lead-acid batteries.
In terms of technologies deployed in new power infrastructure across the country, CNESA said lithium-ion batteries were used in the majority of new capacity for renewable energy grid integration (79%), ancillary services (100%), and transmission/distribution applications (91%). Lead-acid batteries were used most in distributed generation and microgrids (61%).
According to the report, the figures highlight a trend towards setting up specialised energy storage companies (SESCs) in China – which CNESA said aim for a combined total of 100 MWh of production capacity.
Among companies featured in the report are two joint ventures formed by China’s Sungrow and Samsung SDI, plus another between Shenzhen Clou and LG Chem.
In addition, CNESA said “traditional solar photovoltaic (PV) firms” are starting to establish SESCs to provide solar+storage services – such as Trina Solar, which established Trina Energy Storage Co., Ltd., to build its first 2 MW/2 MWh energy storage system in Europe.
Firms creating energy storage subsidiaries or buying into other companies to gain a foothold in the market include key players BYD, Sunwoda, Narada, and EVE Energy.
Meanwhile, CNESA said large-scale solar+storage projects have been deployed in under-developed areas, such as the provinces of Tibet and Qinghai, to help tackle electricity regulation and integration issues and power-up rural communities.
However, in terms of automotive batteries, CNESA’s white paper warned the Chinese lithium-ion electric vehicle (EV) battery market could soon overheat as a result of expanding battery-manufacturing capacity and falling costs.
According to what CNESA said was “incomplete data”, China’s leading EV battery companies collectively published plans in 2016 to add 120 GWh of lithium-ion battery manufacturing capacity. “If these plans come to fruition, the Chinese lithium-ion EV battery market will face serious overcapacity,” the paper said.
The paper referred to a number of unnamed Chinese EV battery companies that have announced plans to expand capacity on the gigawatt-hour scale, with several lead battery firms investing in building lithium-ion EV battery manufacturing facilities.
Meanwhile, Chinese battery companies are seizing opportunities for international business, such as taking part in frequency regulation and peak capacity markets in the US and UK, “primarily through providing containerised energy storage systems”, the report said. For example, “BYD is the most active Chinese company in overseas markets, with 300 MWh of storage deployed in Europe and the Americas”.
In addition, Chinese solar+storage companies are actively entering residential and microgrid markets in Germany and Australia – using existing solar PV sales channels, the paper said.
Six unnamed Chinese companies have announced plans to deploy residential energy storage products locally, thanks to the support of local government policies, the paper added. “Those companies are currently seeking out partnerships with local retailers, solar installers, and energy storage system integrators to rapidly expand operations in the regions.”
Major Chinese energy storage companies have also entered foreign markets by taking stakes in overseas firms or making acquisitions – such as Shanghai-based energy management technologies provider Envision Energy’s investment in Germany’s Sonnen.
