On 22-23 March 2018, the “All Quality Matters” 2018 Solar Congress hosted by TÜV Rheinland Group (hereafter “TÜV Rheinland”) was held in Wuxi, Jiangsu. The ceremony was attended by a number of industry leaders, including Xu Dingming, former Consultant of the State Council, Deputy Director of the Advisory Committee of the National Energy Administration and Member of China National Expert Committee on Climate Change, Wang Sicheng, Researcher for the Energy Research Institute of the National Development and Reform Commission and Zhang Jing, Secretary General of the China Energy Storage Alliance (CNESA) and the Energy Storage Specialised Committee of the China Energy Research Society, along with more than 350 enterprise representatives, scholars and experts from the PV industry. Attendance hit a new high this year.
The Whole PV Industrial Chain Converges on the Platform of the “All Quality Matters” Award
The PV industry is one of the most important industries in the promotion of international and domestic energy transformation. In recent years, Chinese PV enterprises have entered the global market, and PV has become the third national industry to gain a global reputation, after high-speed rail and nuclear power. However, its rapid development has led to several problems that still need to be resolved quickly, such as the growing imbalance between supply and demand, the single product structure, the abandonment of PV power, inadequate funding and barriers to international trade.
The sustained development of the PV industry depends on the strong support and scientific guidance of national policies and demands the cooperation of all players in the whole industrial chain along with a complete system for standardisation. TÜV Rheinland has hosted the “All Quality Matters” Solar Congress for four consecutive years. This year’s ceremony focused on three topics: “adhering to quality while cutting costs”, “building brands using authoritative data” and “improving effectiveness and obtaining benefits by enhancing brand quality”. At the ceremony, the attendees discussed the current situation and potential development trends in the industry and shared their knowledge of cutting-edge technological innovation, standard certification and the best operating practices. There was also an in-depth discussion on “hot” issues such as distributed PV power generation, customer-side operation and energy storage. They also provided detailed accounts of the opportunities and challenges faced by the industry in emerging markets such as South America, focusing on the financing and insurance of PV power stations and the realisation of industry concentration and convergence.
The 2018 TÜV Rheinland Energy Storage System White Paper is Officially Unveiled
At the forum, TÜV Rheinland officially released the 2018 TÜV Rheinland Energy Storage System White Paper (hereafter the “white paper”), which was co-drafted with CNESA after comprehensive and systematic research.
With the rapid development of new energy technologies such as PV power, the demand for power storage is growing. The large-scale development of new energy requires a corresponding provision of effective energy storage technologies. Energy storage therefore represents the future of the energy industries. The white paper can help companies in the PV industry to gain a comprehensive understanding of the latest developments in energy storage and seize opportunities in the market. Some of the views in the white paper are as follows.
The Accumulative Installed Capacity of Energy Storage Projects Worldwide has Steadily Increased
According to the project database of the China Energy Storage Alliance (CNESA) referenced in the white paper, the accumulative installed capacity of operational energy storage projects worldwide had reached 175.4 GW by the end of 2017, with a steady year-on-year growth of 3.9%. Although the installed capacity of pumped storage has captured the bulk of market share with 96% of the total energy storage, its development potential and scale are still restricted. The installed capacity of electrochemical energy storage is small at only 1.7% of the total, but it has rapidly developed and has great potential. By the end of 2017, the accumulative installed capacity of electrochemical energy storage projects reached 2,926.6 MW, a year-on-year increase of 45%.
In terms of the technology distribution of the global energy storage market, the accumulative installed capacity of lithium-ion batteries has the largest share at 76%, with up to 2,213 MW by the end of 2017, and thus leads the electrochemical energy storage market. This achievement mainly comes from electric vehicles, the significant reduction in the costs of lithium-ion batteries and continued technical breakthroughs, and is promoting the worldwide application of lithium-ion batteries.
In the global energy storage market, the ancillary service is the first field to realise the commercial application of energy storage. By the end of 2017, the largest accumulative installed capacity of 1,005.7 MW was in auxiliary services, representing 34% of all operational electrochemical energy storage projects.
Major Countries have Many Favourable Policies for the Development of Energy Storage
The US According to the data in the white paper, in 2017, the US possessed the largest accumulative installed capacity of electrochemical energy storage projects worldwide, accounting for 27.7% of all projects. The storage-side application of industrial and commercial users and the storage application of frequency modulation ancillary service are typical projects. This not only results from the mature electricity market environment in the US, but also relies on a series of support policies for energy storage issued by the US federal government in recent years, including the Self-Generation Incentive Program (SGIP), the compulsory procurement plan for energy storage of public service companies and a series of policies for the auxiliary service of frequency regulation.
The UK The UK has been actively building a smart and flexible low-carbon power system to transform the energy storage market since 2016. The winning tenders of the National Grid’s 200 MW Enhanced Frequency Response (EFR) are all energy storage technologies. The energy storage market in the UK has aroused widespread global interest, due to events such as the newly built 500 MW energy storage capacity for batteries, which was successfully entered in the 2020/21 Capacity Market. In addition, the UK has promoted transformations in energy storage through policies such as Upgrading Our Energy System: Smart Systems and Flexibility Plan, issued in July 2017.
Germany The German market is the most mature in the world in terms of residential energy storage. The development of residential energy storage is driven by many factors such as the rapidly decreasing costs of energy storage systems, annually decreasing PV subsidised electricity prices, regularly increasing retail electricity prices and a subsidy policy for residential energy storage installation over two consecutive phases.
Japan Since being hit by the earthquake in 2011, Japan has embarked on changes to its energy strategy and focused on the scaled development of renewable energy, to make energy storage an important means of improving the accommodation capacity of renewable energy and addressing the power supply instability caused by natural disasters. Japan also aims to establish a “hydrogen society”, and has focused extensively on the vigorous promotion and application of hydrogen energy and fuel cells in the fields of transportation and heat and power supplies to create a new energy system based on hydrogen energy.
Australia With abundant renewable energy resources, Australia, under the support of a series of demonstration projects and bidding procurement plans of the Australian Renewable Energy Agency (ARENA) and state governments, has combined energy storage and renewable energy to build a micro-grid, which plays a leading role in regional power supplies on islands, mineral lands and weak power grid areas. It is an effective alternative to diesel power generation. Supported by a series of incentive policies for installation in various regions, the Australian residential PV energy storage market has made rapid progress.
China Guided by the general direction of energy structure adjustments and energy transformations in China, energy storage is defined as a key support technology. Various national policies have played indirect but important roles in the development of energy storage in China, covering national energy planning and energy equipment, electric power planning and reformation of the electric power system, new energy development, the energy Internet and new energy vehicles. In addition, with the rapid development of the energy storage industry, government departments have formulated and introduced direct policies for the development of energy storage, including the Guidance on Promoting Energy Storage Technology and Industrial Development in China issued in 2017, and the Announcement on Promoting Subsidy (Market) Mechanism Pilot Work for Electrical Energy Storage Participation in Ancillary Services in the “Three North” Regions issued in 2016.
The Energy Storage Application Market Has a Bright Future
According to the white paper, a number of government institutions, as well as electric power and commercial research institutions, have analysed and forecasted the future scale of the energy storage market. With different definitions of published data, however, they are all optimistic about the future development of energy storage. Navigant, a market research institution in the US, has released a research paper on “Country Forecasts for Utility-Scale Energy Storage”, which indicates that the US, China and India will become the three countries with the largest installed capacity of side energy storage in the world by 2026.
According to the “Energy Storage Forecast 2016～2030” issued by Bloomberg New Energy Finance, the global energy storage market will see a “six-fold increase” in two sectors between 2016 and 2030. A quarter of new projects will be implemented in the US in the future, with 70% of the installed capacity coming from China, Japan, India, Germany, Australia, South Korea and the UK.
CNESA has also forecasted the energy storage industry in China. Currently, the industry is mainly categorised into pumped storage, other energy storage technologies dominated by electrochemical batteries other than pumped storage and thermal energy storage technology based on molten salts. Between 2018 and 2020, other energy storage technologies, dominated by compressed air energy storage and electrochemical energy storage, will grow rapidly. It is predicted that the accumulative installed capacity will reach 2.02 GW by the end of 2020.
“Safety” is the Most Concerning Index of Energy Storage Systems
The white paper includes market research on energy storage surveyed from more than 300 employees in the energy storage sector. The results distinguish five primary areas: first, over 65% of interviewees think that the energy storage application is still in the very initial stage, yet they are confident about its development. Around 60% of interviewees believe that the energy storage market will develop rapidly over the next one to three years, but the three main obstacles that need to be solved are high electricity costs, lack of policy support and low profitability.
Second, the “price” is the key to the commercial application of energy storage. The year 2020 is regarded as a time when the price of energy storage batteries is most likely to reach RMB1/Wh. If there are improved subsidy policies, as well as decreasing costs of electricity, the mass commercialisation of energy storage is expected to begin in 2020.
Third, commercial and residential projects are expected to realise short-term and rapid development in the application of energy storage. In the application market, China, Germany and the US are most favoured, where policies strongly support energy storage. These three are the major countries and economic mainstays of Asia, Europe and the Americas.
Fourth, a majority of energy storage enterprises believe that among the key materials for lithium batteries, technological breakthroughs in cathode materials will be made within one to three years, which means that the whole energy storage sector can take a big step forward. However, 34.1% of interviewees think that the ternary lithium battery will become the mainstream energy storage technology.
Last, although the “price” is seen to be a breakthrough, through which energy storage can be commercialised on a large scale, the high cost of electricity is still the main obstacle to the development of energy storage. When it comes to the index of energy storage systems that enterprises focus on, however, the majority will still choose “safety”. Ninety three point nine percent of interviewees believe that third-party testing and certification institutions play a key role in the process of promoting the sustainable and healthy development of the energy storage industry.
Making Contributions to the Critical Stage in the Industrialisation of Energy Storage
Through the white paper, TÜV Rheinland provides a one-stop interpretation of the application, business model, quality, safety and global access of energy storage systems. Particularly in the latter two aspects, as the white paper states, the evaluation index of energy storage systems includes safety, economy, reliability, high efficiency and easy manipulation and maintainability. Safety is the most important index, as well as the evaluation basis of all energy storage systems. It covers electrical safety, battery safety, functional safety, transportation safety, electromagnetic compatibility, environmental protection and grid-connected interface protection.
Performance is also important, including rated capacity, charge/discharge rate, self-discharge, high- and low-temperature characteristics, cycle tolerance, energy efficiency and life characteristics. In the energy system, the grid-connected standards, wireless communication standards and the index of environmental protection all have their specific requirements, with different standards in different countries. TÜV Rheinland has given a detailed account of how to smoothly enter major energy storage markets such as China, Germany, the US, Japan and Australia.
It is known that over 80% of PV module manufacturers in the world have accepted authoritative testing in TÜV Rheinland laboratories. In recent years, the energy storage sector has grown. At this critical stage in the industrialisation of energy storage, TÜV Rheinland is a global leader in professional testing and certification and will contribute to the healthy development of the sector through its many years of professional experience in the PV industry, advanced laboratory facilities and enhanced testing and certification systems, to lead the rising star of the PV industry.
