Beside a sprawling solar panel factory in the eastern Chinese city of Suzhou stands a drab two-storey building that few people ever enter. Inside, stark rows of batteries store cheap electricity while the city sleeps each night. In the morning, when energy use and prices go up, the batteries release their power to the factory next door, reducing its electricity bill.
When this demonstration project started operating in 2017, it was a proof of concept for energy storage, an industry that was about to receive explicit support from the national government and which seemed sure to grow alongside renewable energy for decades to come.
Two-and-a-half years later, stalling reform, shifting policy and a slowing economy had put the sector in crisis even before the coronavirus pandemic struck. “It’s gotten very difficult to do energy storage,” says Paul Man, general manager of Anxin, an energy storage company, which is part of the Golden Concord energy conglomerate that owns the Suzhou solar panel factory. “If government policy doesn’t change, energy storage won’t be doable in China.”
According to industry group China Energy Storage Alliance (CNESA), newly installed battery-powered storage capacity shrank by nearly a quarter year-on-year in 2019. Companies whose sole business is energy storage “are under enormous pressure to survive, regardless of the epidemic,” says Wang Si, senior policy research manager at CNESA. “Some smaller companies will go bankrupt.”
Energy storage is, in theory, an attractive proposition. It can help keep down the energy costs of businesses and improve an electricity grid’s stability and flexibility. On a larger scale, energy storage will be crucial in moving countries from predictable but polluting fuels like coal to fickle but climate-friendly alternatives. In times with little wind or sunshine, giant batteries can keep the lights on. The Suzhou facility, at 10 megawatt-hours, has the capacity to power 1,600 homes for a day.
After the Chinese government gave official support in October 2017 by releasing its first national policy document on energy storage, newly installed electrochemical – battery-powered – energy storage capacity surged from 120.9 megawatts in 2017 to 682.9 megawatts in 2018, according to figures from CNESA. (There are various other storage technologies, but batteries receive the most interest for their flexibility in scale and location.)
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