Storage the missing link in China's strategy for renewable energy
How China approaches storing of electricity will be globally significant for policymakers and manufacturers in sustainable power generation
Beijing is making great strides to ramp up renewable energy - at least on paper - and recent weeks have been especially encouraging.
Earlier this month, Xie Zhenhua, vice-chairman and chief climate negotiator at the National Development and Reform Commission, said a carbon cap plus steep emissions cuts after 2020 could roll out next year. Realising such ambitions will require a change in the use of renewable energy.
Last month, policymakers set a 70 gigawatt solar target for 2017 (China's total electricity-generating capacity is about 1,100GW). That means adding 50GW, or more than the world installed last year, in three years across rooftops and solar farms.
Offshore wind is also picking up with better incentives. Signs are that work may begin on 1GW of projects this year.
Meanwhile, money flows into onshore wind, with China adding almost as much last year as the rest of the world combined.
And there's the rub. Wind farms are built faster than the power grid, designed for conventional energy, can adapt. Consequently, wind operators in some places are paid at times to idle a fifth of their turbines.
The problem partly arises because wind and solar, while steady over the long term, fluctuate in the short term. Simply put, output peaks can clash with peak times on the power grid, analogous to more cars trying to join jammed streets in Beijing's rush hour.
Adding more power lines, which takes several years, is the standard solution. However, additional capacity is often underutilised, like empty highways during the day or late at night.
Storing electricity is the alternative. For a century, the only realistic storage was pumped hydro. Compressed air, flywheels and molten salts are now garnering attention.
The biggest advances are seen in falling prices for advanced chemical batteries. Like solar, batteries are modular, installed in days and work equally well whether distributed among consumers or concentrated in remote storage stations.
Storage will increase the economic use of variable renewable energy. For example, batteries near renewable-energy generators soak up electricity otherwise lost to grid congestion.
Distributed solar and distant wind farms, when the grid has spare capacity, can charge batteries near consumers.
Storage strategies also benefit the grid by reducing expansion bills, enhancing grid structure and increasing utilisation of power lines.
However, valuing storage and setting standards is not simple, hence trials worldwide. In China, for example, State Grid runs the large-scale Zhangbei demonstrator in Hebei province, while battery manufacturer BYD has batteries deployed at Changsha in Hunan province.
Elsewhere, policies are pushing commercial deployment. California's storage target of 1.3GW by 2020 has drawn over 2GW of proposals from developers. Japan, too, is offering utilities incentives to add storage. Households in Germany and Japan can tap grants for batteries at home.
The two deadlines late next year - the next five-year plan and a global climate deal - suggest China will soon follow California.
Several factors support the case for an ambitious storage target. One, experience suggests power lines will still lag renewable-energy output. Two, storage reduces curtailment losses and leverages the value of zero-carbon electricity. Three, mandating storage supports the priority clean-tech sector.
The challenge for policy is optimising storage development to reduce carbon, increase resilience and support the clean-tech sector. Whatever the balance of policy, the world's biggest storage targets will probably be in China.
Meeting those targets means structural change. Regulators and investors will have to manage new risks as they figure out storage strategies.
With experience elsewhere limited, how China optimises value and integrates storage will be globally significant for policy and the fortunes of manufacturers in a critical new sector for sustainable electricity.
