Analysis and suggestion on the development of grid side energy storage

In 2022, the National Development and Reform Commission of China and the National Energy Administration of China successively issued the Implementation Plan for the Development of New Energy Storage in the 14th Five-Year Plan (hereinafter referred to as the Plan) and the Notice on Further Promoting the Participation of New Energy Storage in the Power Market and Dispatching and Utilization, requiring the allocation of energy storage at key nodes of the power grid to improve the safe operation of the large power grid.Tension in site and corridor region delay and alternative transmission infrastructure investment;And further clarified the new type of energy storage market positioning, and gradually establish and improve relevant market mechanism, price mechanism and operating mechanism.Under "double carbon" goal, the role of energy storage location provides support for energy storage and energy storage industry policy development, the development of the grid side storage also will impact on power grid investment company.

The new policy encourages grid companies to invest in energy storage

Since the National Development and Reform Commission of China issued the Opinions on Further Improving the Price Formation Mechanism of Pumped Storage, the mechanism for channeling investment costs of pumped storage power stations has been gradually improved. The Plan proposes to establish a capacity electricity price mechanism for independent energy storage power stations at the grid side, that is, the capacity electricity fee corresponding to the capacity electricity price is included in the recovery of power transmission and distribution price, and the cost and income of energy storage facilities that replace power transmission and distribution are included in the power transmission and distribution price. According to the consensus formed by the implementation plan, this policy provides the possibility for power grid enterprises to invest in new energy storage. However, the policy is still relatively macro at present, and the implementation route, access conditions and operation rules are not clear.

At the same time, when grid-side energy storage is developed based on effective incentive mechanism, once grid companies invest in this field, investment supervision will be stricter, so as to avoid project losses caused by investment impulse or raising the cost of the entire power system.If the cost benefits of grid side energy storage are to be recovered through transmission and distribution price, feasibility study and demonstration should be done, and the most important principle of "relevance, rationality and legality" of transmission and distribution price should be clearly explained, whether it is a substitute for transmission and distribution facilities and whether it is more economical. Otherwise, the investment cost cannot be regulated through transmission and distribution price. Moreover, once the energy storage cost and income on the grid side are included in the electricity transmission and distribution price, the relevant supervision work will be further refined.

Significance of rational distribution of energy storage on grid side

Firstly, conducive to the stable operation of the power grid. The plan defines four major scenarios for energy-storage layout on the grid side. First, key grid nodes with load-intensive access, large-scale new energy pooling, large-capacity DC feed-in, difficulty in peak and frequency regulation and insufficient voltage support capacity are located. Second, in the station site corridor resource shortage area; Third, in the weak areas of the power grid, such as in the remote areas where the power supply capacity is insufficient at the end of the grid or the grid is not covered; Fourth, as an emergency backup power supply for important power users, such as the government, hospitals, data centers, etc. The rational layout of new energy storage facilities on the side of the power grid will improve the safe and stable operation level of the large power grid as well as the capacity of supply protection and emergency response, reduce transmission line congestion, and delay the investment in transmission and distribution facilities.

Secondly, reasonable digestion system power supply cost. The large-scale development of energy storage needs the corresponding price mechanism to effectively channel the cost. If the capacity electricity fee is included in the transmission and distribution price, taking the lithium iron phosphate battery energy storage as an example, the general bid price in 2021 will be 1,400 yuan/KWH, the project scale will be 83.3 MW /166.6 MW/h, the capital ratio will be 20%, the operating life will be 21 years, the battery will be replaced once every 10 years, and the battery replacement cost will be 700 yuan/KWH. According to the capital yield of 6.5% calculation, capacity electricity price is 294.7 yuan/kw. Assuming that the newly-built scale of new energy storage on the power grid side of Jiangsu Province is considered as 500 MW, the electricity charge of new energy storage capacity will be increased by 294.7 million yuan per kilowatt based on the capacity electricity price of 294.7 million yuan per kilowatt per year, and the increased part of the electricity price transmitted to the electricity selling side will be about 0.00047 yuan per kilowatt hour. In the context of building a new power system and electricity reform, the contradiction between rising cost on the supply side and decreasing cost on the demand side is faced. However, considering the utility of new energy storage in building a new power system, and the increase of electricity consumption in the whole society of the province, the increase of selling price is within the range of the carrying capacity of the whole society, it is basically reasonable and feasible to plan the recovery of energy storage capacity through electricity transmission and distribution price.