China's first industrial policy announcement, boosting China's energy storage towards commercialization

In October 2017, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, and the National Energy Administration jointly released the "Guiding Opinions on Promoting China's Energy Storage Technology and Industrial Development." This marked the first comprehensive policy framework aimed at accelerating the growth of China’s energy storage industry. The document addressed key challenges such as insufficient policy support, limited research and development (R&D), lack of technical standards, and inadequate overall planning. It emphasized the crucial role of energy storage in smart grids, high-penetration renewable energy systems, and the energy internet, while setting clear goals for the next decade. The release of this policy is a significant milestone, highlighting the strategic importance of energy storage in China’s ongoing energy transformation. It aims to build a clean, low-carbon, safe, and efficient modern energy system. By providing direction and support, the policy is expected to drive innovation, attract investment, and foster sustainable growth in the energy storage sector. Developed with the collaboration of institutions like the Chinese Academy of Sciences, the China Academy of Electric Power, and the Zhongguancun Energy Storage Industry Technology Alliance, the "Guiding Opinions" reflect extensive research and insights from both domestic and international energy storage developments. This initiative is designed to guide the industry toward a more structured and competitive future. One of the key points outlined in the policy is the synergy among various energy storage technologies. As the application value of energy storage in renewable energy integration and power grid operations becomes more evident, efforts to promote R&D, demonstration projects, and commercialization have intensified. Technologies such as compressed air energy storage, lithium-ion batteries, flow batteries, and hydrogen storage are showing promising progress. With decreasing costs and improving performance, these solutions are becoming increasingly viable for large-scale deployment. According to data from the Zhongguancun Energy Storage Industry Technology Alliance (CNESA), by the end of 2016, China’s total energy storage capacity reached approximately 24.3 GW, with pumped hydro storage accounting for nearly 99% of that. Electrochemical storage, however, was growing rapidly, with over 243 MW installed and an annual growth rate exceeding 72%. Lithium-ion batteries dominated the market, followed by lead-acid and flow batteries. Looking ahead, the policy emphasizes the need for breakthroughs in key technologies, equipment, and standards. It also encourages the commercialization of energy storage in areas such as renewable energy integration, frequency modulation services, and industrial applications. The goal is to create a diverse and interconnected energy storage ecosystem that supports the development of a smarter, more resilient power grid. Another critical aspect highlighted in the policy is the need to clarify energy storage application scenarios. As the demand for smart power systems and distributed energy networks increases, the practical benefits of energy storage are becoming more apparent. User-side applications, such as peak shaving and load management in industrial parks, are gaining traction. Meanwhile, renewable energy regions like Dalian and Qinghai are exploring large-scale energy storage projects to stabilize supply and improve efficiency. The policy also stresses the importance of market mechanisms and regulatory frameworks to unlock the full potential of energy storage. By allowing energy storage systems to participate in electricity markets, ancillary services, and capacity bidding, the industry can achieve greater economic returns. Learning from global examples, such as the U.S. PJM market and the UK’s capacity auctions, China aims to create a fair and transparent environment that encourages innovation and investment. Finally, the policy underscores the need for standardized project management, safety regulations, and battery recycling systems. As the industry scales up, ensuring quality, reliability, and environmental responsibility will be essential. A robust framework for testing, certification, and lifecycle management is being developed to support long-term sustainability. In conclusion, the "Guiding Opinions" represent a pivotal step in China’s energy storage journey. They not only provide a roadmap for technological advancement but also signal a broader shift toward a cleaner, more efficient energy future. With continued support and innovation, the energy storage industry is poised to play a central role in transforming how energy is produced, managed, and consumed in China.

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