On December 30th, the Hebei Fengning Pumped Storage Power Station under State Grid Xinyuan, a wholly-owned subsidiary of State Grid, was officially put into operation. The Fengning Power Station is equipped with 12 units with a single unit capacity of 300000 kilowatts, with a total installed capacity of 3.6 million kilowatts, an annual designed power generation of 6.612 billion kilowatt hours, and an annual pumping capacity of 8.716 billion kilowatt hours. It is a key project serving the Beijing Winter Olympics to achieve 100% green power supply, adjacent to the Beijing Tianjin Hebei Load Center and the Hebei North 10 million kilowatt level new energy base.

This is currently the world's largest pumped storage power station, with a total investment of 18.734 billion yuan and a maximum single energy storage capacity of 40 million kilowatt hours. The standard parameter index for benchmarking against the current new energy storage is 3.6GW/40GWh.

Based on the above parameters, we have roughly calculated some indicators of the pumped storage system:
1. Energy storage duration: 11.11 hours
2. Power unit price: 5200 yuan/KW
3. Capacity unit price: 468.35 yuan/KWh
4. Cycle efficiency: 75.86%
5. Total construction period: 11 years

State Grid Xinyuan Holdings is the main company responsible for pumped storage under State Grid Corporation of China. We have compiled the following table for 56 pumped storage projects with a total investment of nearly 380 billion yuan under State Grid Xinyuan.


The above pumped storage projects all have the following characteristics:
1. The construction period is long, basically 6-10 years;
2. The construction cost has been increasing year by year, and the larger the scale, the lower the cost. The maximum installed power cost for ongoing projects is 7000 yuan/KW, with an average power cost of 6200 yuan/KW for ongoing projects and 4400 yuan/KW for projects that have already been put into operation;
3. The cycle efficiency remains stable at around 75%;

The above analysis can provide the following insights for the development of new long-term energy storage in the future:
1. Currently, pumped storage accounts for nearly 90% of the energy storage installations that have been put into operation. All pumped storage is long-term energy storage lasting more than 4 hours, so the future of energy storage will mainly rely on long-term energy storage.
2. From the perspective of installed capacity and construction scale, the demand for long-term energy storage in the power grid is very high, so there will be great market opportunities for the new type of long-term energy storage after the cost is reduced.
3. The essence of energy storage is electricity trading, and the direction of technological development ultimately needs to be implemented to reduce the cost of electricity per kilowatt hour. If the cost of the power part is high, then the cost can be reduced by expanding capacity, which must be achieved through decoupling technology between power and capacity. In the future, technologies that can reduce capacity costs to within 1000 yuan/KWh will have a trillion dollar market.
4. The construction cycle is fast, and environmentally friendly technologies are easier to implement.

Let's refer to the technical roadmap of the first member companies of the Global Long Term Energy Storage Council.


The currently rapidly developing long-term energy storage technology in China, apart from pumped storage, mainly includes liquid flow batteries (including all vanadium, iron chromium, iron zinc, all iron, zinc bromide, sulfur iron, etc.) and compressed air energy storage. These two technologies are also the earliest directions for foreign energy storage companies to be established.

According to the report released by McKinsey's Global Long Term Energy Storage Council on Long Term Energy Storage, it is necessary to achieve net zero emissions by 2040 in order to achieve global climate goals. To achieve this goal, the power industry needs to leverage innovative technologies to address three key issues:
1. Triple the existing power generation to meet future global electricity demand;
2. The transformation of power generation technology from fossil fuels to renewable energy has been completed;
3. Maintain social and economic costs within an acceptable range.

To achieve this goal, the total installed capacity of long-term energy storage needed globally by 2040 is 85-140 TWh. According to the estimated proportion of 26% of China's global primary energy consumption, the long-term energy storage installed capacity required by China at that time will be 22-36 TWh.

According to the "Medium - and Long Term Development Plan for Pumped Storage Energy (2021-2035)", by 2035, the installed capacity of China's pumped storage energy will be about 300GW. Based on 8-hour energy storage, the long-term energy storage capacity that pumped storage energy can meet is 2.4TWh, accounting for about 10% of China's required long-term energy storage. Therefore, nearly 90% of the future long-term energy storage demand will rely on new energy storage technologies.

In addition, academician Ouyang Minggao of the Chinese Academy of Sciences estimated the demand for energy storage for peak shaving of the power grid as follows:
2030: 200GW/2TWh-600GW/4TWh
2035: 800GW/6TWh-1TW/8TWh
2040: 1.2TGW/12TWh-1.5TW/15TWh


From this estimated data, it can also be seen that the domestic market requires more long-term energy storage.

To achieve the rapid development of long-term energy storage technology, it requires the promotion of more professionals in the industry and coordination at the government level. In summary, it includes the following three points:
1. Long term system planning;
2. Early compensation mechanisms to reduce investor risk when the market is in its early stages;
3. Design supportive policies, regulations, and market mechanisms.

At present, policies in China that require long-term energy storage are also frequently introduced, ranging from the National Development and Reform Commission's encouragement of energy storage for more than 4 hours on August 10, 2021, to the Shanghai Development and Reform Commission's requirement on January 10 this year that energy storage must be equipped for more than 4 hours, and there is a penalty mechanism for reducing the price of wind power grid connection if supporting energy storage is not put into operation on schedule. With the increasing penetration rate of wind and solar power generation, it is believed that the requirements for storage duration are becoming longer.




There are not many companies in China currently engaged in technology development in the field of new long-term energy storage, and ZH Energy Storage is committed to developing low-cost 4-12 hour energy storage technology.

In order to calculate the full life cycle electricity cost of various energy storage products more scientifically, ZH Energy Storage has launched an energy storage cost and investment return calculator: NeLCOS. We welcome everyone to try it out and provide feedback:
http://nelcos.z-henergy.com


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