The next step for China’s clean energy transition: industrial and commercial storage deployment

The industrial sector plays a crucial role in achieving the goals set by the Paris Agreement and China’s dual-carbon strategies. However, it is facing increasing challenges in transitioning to clean power, given issues such as the variable supply and curtailment of renewables. Pairing distributed renewable energy with storage has emerged as a viable solution, which can balance power supply and demand while enhancing power utilization efficiency.

The industrial energy storage sector is currently at a crossroads, facing both challenges and promising opportunities. On the one hand, the market potential is vast, with an increasing number of industrial users recognizing the importance of energy storage and showing a growing willingness to install storage systems. On the other hand, industrial companies are confronted with high costs of the procurement and deployment of energy storage systems, such as land acquisition, grid connection and financing.

The World Economic Forum has brought together three perspectives on advancing energy storage deployment in the industrial sector.

Gao Jifan, Chairman and Chief Executive Officer, Trina Solar

Under the new development trends, the energy storage industry needs a higher quality and more advanced upgrade than ever before. Trina Solar is dedicated to building a high-quality development path for solar energy storage by focusing on five key driving forces: brand building, financing capability, product development, system integration, and delivery and service.

Industrial energy storage systems, offering benefits such as enhanced power reliability, are crucial for bridging self-developed solar power facilities with the public grid, and require effective and secure integrated solutions.

Trina Solar has developed a comprehensive energy storage solution, for example, in its Yancheng Delong project in Jiangsu to realize modular design. The system integrates an Energy Management System (EMS) that monitors and communicates with the Power Conversion System (PCS) and battery modules, which significantly enhances system efficiency and power quality.

The system stores electricity during off-peak hours and discharges during peak times, leveraging price differentials to reduce energy costs. It also provides backup power during grid outages or maintenance, improving reliability and minimizing disruptions. Additionally, the energy storage solution enables the storage owner and operator to participate in grid ancillary services, enhancing grid stability and generating additional revenue. This system supports better integration of renewable energy sources like wind and solar, promoting a cleaner, more sustainable energy mix. Financially, Trina Solar secures ample funding and ensures stable operations for its energy storage projects by co-investing with partners and signing energy management contracts.

Yu Yong, Chairman, HBIS Group

High carbon emissions in the steel industry stem from its energy structure. HBIS is leading efforts to reduce emissions by adopting hydrogen, green electricity and energy storage. This strategy increases renewable energy use and builds a diverse, clean energy system, contributing significantly to global climate change mitigation and environmental protection.

HBIS Group is addressing the challenges of the green transition and green power demand. It leads the steel industry in green power trading, ranking among the top ten in China, and aims to achieve a renewable energy capacity of 350 MW by 2025. To enhance renewable energy utilization, HBIS is accelerating the development and application of energy storage technologies.

In the energy storage sector, HBIS is leveraging its vanadium and titanium resources to build a 300 MW annual vanadium battery storage production line to enhance the vanadium-titanium industry chain, fostering innovation and competitive differentiation.

Utilizing its energy scenarios, HBIS promotes the demonstration of energy storage technologies. In Chengde, capitalizing on abundant photovoltaic resources, HBIS is developing a 150 MW integrated source-grid-load-storage project in a vanadium-titanium materials industrial park to ensure stable power supply. In Wuyang, a 157 MW/314 MWh electrochemical storage system significantly improves electric arc furnace efficiency, achieving carbon reduction and cost efficiency. In Zhangjiakou, HBIS explores compressed air storage applications to diversify energy storage solutions.

With a low-carbon development roadmap, HBIS continues to optimize its energy structure, advance energy storage technologies, and promote "new energy + storage" projects, paving the way for the green transformation of the steel industry.

Chen Haisheng, Chairman, China Energy Storage Alliance

Early policy guidance is crucial for the rapid and high-quality development of regional industrial energy storage. This strategy not only creates mutually beneficial outcomes for businesses and local governments but also fosters a positive cycle of growth for the industry ecosystem.

CNESA’s research revealed that some regions have made solid results in energy storage deployment driven by effective policy frameworks. For example, Zhejiang province has a vast array of energy demand scenarios but faces problems such as high construction costs and long recovery cycles. Through diversified user-side energy storage incentive policies, Zhejiang has improved the economic efficiency of energy storage projects and supported the development of PV distribution and storage industry.

The power system of Zhejiang divided time-based electricity pricing into “two peaks and two valleys,” meaning that a new energy storage plant will enter peak and valley price ranges twice a day for its charging and discharging. In addition, some cities and districts provide additional subsidies for energy storage power stations, mainly according to the amount of discharged electricity and the size of the installed capacity.

These policies have effectively shortened the cost recovery period of energy storage projects and reduced the pressure of capital investment by enterprises, which has enhanced their economics. Against a background of continuous subsidy decline, the market can autonomously promote the healthy development of the energy storage industry through a positive cycle mechanism.

Initial subsidies not only guide industrial development, but also yield returns by broadening the tax base and boosting local fiscal revenue.

These successes demonstrate that well-designed policy incentives and effective macroeconomic regulation can foster growth for both energy consumers and local economies. Zhejiang's experience illustrates how policy guidance can catalyze large-scale regional energy storage deployment, ensuring sustainable long-term development and providing valuable insights for other regions.

According to the latest research, by 2030 it will be much more straightforward for commercial and industrial energy storage systems to participate in spot markets and provide ancillary services, leading to substantial revenue growth. Notably, profits from spot market transactions via virtual power plant aggregation are expected to rise tenfold, accounting for nearly 80% of revenue post-payback.

The outlook for industrial energy storage is promising and rapidly evolving. However, reaching its full potential requires a unified effort from all stakeholders to advance clean energy transitions within businesses and support the structured development of the industrial energy storage sector.