Energy – Storage Systems | 20 Questions on Energy Storage

Since last year, with the maturation of energy – storage technologies, the gradual decline in costs, and the continuous introduction of electricity – price – incentive policies, increasingly small – and – medium-sized user – side energy – storage projects have been emerging, and the market demand for user – side energy- storage projects has also increased significantly. Recently, several user-side energy-storage projects have been put into operation across the country, but many people are still not very familiar with user-side energy storage.

The user-side energy storage we usually refer to is mainly electrochemical energy storage applied to many industrial and commercial customers. Energy storage equipment can be simply understood as a large-scale power bank. It charges when electricity prices are low and discharges during high-price periods for corporate production, thereby reducing corporate electricity costs.

From the perspective of the entire power system, the application scenarios of energy storage can be divided into three major categories: energy storage on the power – generation side, energy storage on the transmission – and – distribution side, and energy storage on the user side.

20 Questions on Energy Storage

1. What is user-side energy storage?

The user-side energy storage we usually refer to is mainly electrochemical energy storage applied to a large number of industrial and commercial customers. Energy storage equipment can be simply understood as a large-scale power bank. It charges when electricity prices are low and discharges during high-price periods for corporate production, thereby reducing corporate electricity costs.

2. What are the benefits of installing an energy-storage system?

• Peak – shaving and valley – filling:By taking advantage of the difference between peak and off-peak electricity prices, the system charges during off-peak and flat periods and discharges during peak and super-peak periods to reduce corporate electricity costs.
• Balancing demand – side charges:The energy-storage system can perform peak-shaving and valley-filling, eliminating super-peak loads, smoothing the electricity-consumption curve, and reducing demand-side charges.
• Dynamic capacity expansion:The transformer capacity of a user is fixed. Generally, when a user needs the transformer to operate beyond its capacity during a certain period, transformer capacity expansion is required. However, after installing a matching energy-storage system, the system can discharge during that period to reduce the transformer load, thereby reducing the cost of transformer capacity expansion.
• Demand – side response:After installing an energy-storage system, if the power grid issues a demand response, customers do not need to limit electricity consumption or pay high electricity bills during that period. Instead, they may be able to participate in demand-response transactions through the energy-storage system and obtain additional compensation.

3. Main application scenarios for user-side energy storage

User-side energy storage is mainly applied to objects with regular electricity consumption patterns, such as charging stations, industrial parks, data centers, and communication base stations.

4.Investment, construction, operation, and revenue – sharing models for user – side energy – storage projects

• Investment, construction, and operation by an integrated operator:The client does not need to pay a penny and only needs to provide a site for the construction of the energy-storage system. The revenue generated is shared between the integrated operator and the user.
• Revenue sharing:The specific revenue-sharing ratio is negotiated based on the client’s electricity consumption situation and the size of the energy-storage system.
• Self-investment and construction by the user:The user invests in and constructs the energy-storage system, and the integrated operator is responsible for operation while guaranteeing the client’s revenue.

5. Cooperation period for user – side energy – storage projects

The recommended cooperation period is generally 15 years.

6. How long does it take from contract signing to project implementation?

From contract signing to the official commissioning of the project, it generally takes 3 – 6 months, depending on the specific conditions and complexity of the site.

7. What electricity consumption standards does a company need to meet to install an energy storage station?

Currently, the national and local governments have not set conditions for the construction of user-side energy storage. In Guangdong, the annual electricity consumption is generally not less than 5 million kWh, and in Zhejiang, it is generally not less than 3 million kWh. The larger the electricity consumption, the larger the energy-storage capacity that can be configured for the project.

8. Land area required for an energy-storage station

The land area required for a 1 – MWh energy – storage station is about 10㎡. If front – and back safety distances are considered, it is 20 – 30㎡.

9. Is the owner required to assist in handling procedures for the installation of an energy-storage station?

The installation of an energy-storage station requires registration on the local Development and Reform Commission’s website. This procedure is handled by the integrated operator, and the owner only needs to provide the necessary documents.

10. What are the site requirements for installing an energy-storage station?

• The site should be outdoors and within 20 meters of no hazardous chemical warehouses.
• It should be as close as possible to the distribution room, with a maximum distance of no more than 100 meters.

11. Construction period of the energy-storage station? Is a power outage required? For how long?

After the procedures are completed, the formal construction period is about 1 – 1.5 months. A short-term power outage is required to install the grid-connected cabinet, with the shortest power outage time being about 2 hours.

12. Operation and maintenance of the energy-storage station after completion. Is the owner involved?

For clients who choose a certain integrated operator, the integrated operator will be responsible for the operation and maintenance of the energy-storage station after completion. They will also generally provide simple training for the owner’s relevant staff and offer solutions for special circumstances.

13. Will the energy-storage station increase the owner’s basic electricity charges?

No. If the charges are based on capacity, the basic electricity charges are fixed. If they are based on demand, the basic electricity charges may decrease because the energy-storage discharge takes on the load and reduces the maximum demand. When designing the energy-storage capacity, the transformer capacity and load have been considered, and the energy-management system (EMS) will automatically determine and stop energy-storage charging if it increases the demand.

14. Will the energy-storage station incur losses, and who is responsible?

There are losses, which have been considered and deducted when the two parties share the revenue.

15. Is the electricity metering of the energy-storage station accurate?

Accurate. All electricity meters installed comply with national standards and have been tested.

16. Who is responsible for safety issues with the energy-storage station?

If the equipment of Party B causes a fault or loss of the equipment of Party A, Party B shall compensate for the losses suffered by Party A. Meanwhile, during the contract performance period, Party B is responsible for insuring the project-related machinery damage insurance and all-risk property insurance, and shall bear the insurance premium. The property insurance amount should not be less than the actual value of the insured property.

17. Is a power outage required for the daily operation of the energy-storage station?

No power outage is required for the daily operation of the station.

18. Will there be power flickering during the switching of the energy-storage station?

The energy-storage equipment will not harm the user’s power quality.

19. During emergency power supply of the energy-storage station, is an instant connection/manual adjustment required?

It is necessary to set the switching strategy in advance. Unlike a UPS, the energy-storage equipment cannot achieve automatic switching.

20. When the energy-storage equipment reaches a certain level of loss, is replacement required, and who bears the cost?

The main loss-making part of the energy-storage equipment is the battery cell. The health of the battery cell will decline with increasing usage time. When it declines to a certain extent, the integrated operator will be responsible for the replacement.