China will dominate Asia Pacific’s energy storage market within five years as the country’s installed capacity goes through a rapid expansion, according to industry analysts Wood Mackenzie Power & Renewables.
The country will leap frog its neighbour South Korea to become the number one energy storage market in the region by 2024 with 12.5GW/32GWh of installed capacity— up from 489MW/843MWh in 2017.
WoodMac predicts China’s energy storage path will double the installed cumulative capacity of South Korea, which is forecast to grow relatively modestly from 1.3GW/2GWh last year to 5GW/9GWh within five years.
The report noted the country’s growth would come from the transitioning of its ancillary services market and cost reduction in technology, and be driven by front-of-the-meter (FTM) and commercial and industrial (C&I) behind-the-meter applications (BTM).
Dr Le Xu, senior analyst at Wood Mackenzie, said: “Although China’s energy storage market is still in its infancy, we can expect to see continued strong growth driven by battery cost reduction, policy incentives and power market reform.
“By 2024, global cumulative capex investment in the energy storage sector could grow to US$71billion. China will account for about 14% or just over US$10billion.”
In February, China Energy Storage Alliance (CNESA) Project Database reported that the global accumulated electrochemical ESS capacity reached 4.8GW/10.7GWh —with China accounting for around a fifth of that total.
CNESA has reported that China has more than 1.4GWh of grid-side energy storage projects currently planned/under construction. Grid companies in Jiangsu, Henan, Hunan, Gansu, and Zhejiang provinces all released large-scale energy storage procurement targets last year.
State Grid Corporation of China, a state-owned utility company, deployed 452MWh of grid-connected FTM pilot projects, around 83% of the nation’s market growth in that sector last year. The BTM C&I sector reached 513MWh last year, almost triple that recorded in 2017.
Of storage projects deployed to participate in China’s ancillary services last year, 60% were stand-alone, 14% was paired with coal plants, and 19% were renewables-plus-storage.
China utilities led the renewable-plus-storage market growth, with Qinghai province deploying 105MWh of storage paired with either solar projects or hybrid solar and wind plants in a bid to reduce curtailments.