US Incentives on Independent Energy Storage Systems

The passage of the "Reducing Inflation Act" in the United States has caused heated discussions in all walks of life. A professional lawyer for an energy developer in the United States said that the tax incentives for the independent deployment of energy storage systems in the bill will reduce the number of solar-plus-storage projects deployed.

The Inflation Reduction Act was introduced to reduce U.S. health care costs, encourage domestic manufacturing, and address the climate crisis, energy security and cost concerns.

Incentives for independent deployment of energy storage systems may inhibit solar-plus-storage projects

Through this bill, the ITC incentive for solar + storage projects will be introduced to independently deployed energy storage systems, which means that future investment and financing in this field will reach 369 billion yuan Dollar.

Morten Lund is a partner at the law firm of Stoel Rives, where he has practiced legal advice on energy and infrastructure projects across a variety of technologies, and now focuses primarily on clean energy project development in California.

In interviews with industry media about the potential impact of the bill, Lund emphasized that the bill would incentivize the development of stand-alone energy storage systems, but could inhibit the deployment of solar-plus-storage projects.

“Incentives for independently deploying solar power storage systems to get an investment tax credit would unlock enormous value, and that’s why solar-plus-storage projects would be disadvantaged — in order to qualify for ITC,” Lund said. , The battery energy storage system in the solar + energy storage project must store and use the power of the solar power generation facility, and its power is basically completely provided by the solar power generation facility and not from the grid. This means that the role of the battery energy storage system is relatively limited.”

The ITC typically reduces the upfront investment in equipment purchases for energy storage projects by around 30%. Overall, a roughly one-third reduction in capital expenditure on the required equipment will allow the project to deploy smoothly.

60% of battery energy storage systems will be deployed with solar power generation facilities

According to statistics released by the U.S. Government Energy Information Administration (EIA) in March this year, 60% of the 10GW battery energy storage projects deployed in the service sector of U.S. utility companies in the next two years will be matched with solar power generation facilities. deploy.

According to years of research by the Lawrence Berkeley National Laboratory in the United States, this matching deployment rate is even higher in the western states of the United States. In California, for example, nearly all grid-scale solar systems are equipped with battery storage, including planned projects.

In addition to access to the ITC, significant cost reductions in recent years have been the driving force behind the deployment of solar-plus-storage projects, which will also share land, power grids and Interconnection points for other infrastructure, which further reduces costs.

Xinjiang Frst Infrastructure Fund In PV Energy Storage

 On August 14, China Development Bank Kashgar Branch invested 500 million yuan in infrastructure funds for Xinhua Hydropower Shache County’s 200,000 kW (800,000 kWh) supporting energy storage and 800,000 kW market-based grid-connected photovoltaic power generation project, which is the first time in Xinjiang. A new energy fund project. Infrastructure funds can effectively provide project construction capital to ensure that the project can start as soon as possible and generate physical workload.

In the next step, Xinjiang Development and Reform Commission will continue to strengthen communication and connection with China Development Bank Xinjiang Branch and Agricultural Development Bank Xinjiang Branch, speed up the issuance of funds, actively promote the timely start of construction of new energy projects that have been deployed, strive to achieve development with resources, and fully serve Xinjiang's economic steady increasing.

How are solar photovoltaic energy storage systems working?

Photovoltaic power supply is different from traditional power supply. Its output power changes drastically with changes in environmental factors such as light intensity and temperature, and it is uncontrollable. Therefore, if photovoltaic power generation wants to replace traditional energy sources to achieve large-scale grid-connected power generation, it has a The impact of the power grid can not be ignored.

Photovoltaic power generation has the characteristics of high output level in a short time at noon, low output level in other periods, and output during the day and no output at night. The output is transferred to other time periods to reduce the peak output of the power station and reduce the abandonment of light.

In the working process of the battery energy storage system, the principle of reducing the number of charging and discharging times of the energy storage system as much as possible is to prolong the service life of the energy storage system. During the peak hours of photovoltaic power generation, the charging of the battery energy storage system is controlled to cut the output of the photovoltaic power station. After the peak period of photovoltaic power generation, the discharge of the battery energy storage system is controlled, and the discharge control of the energy storage system can assist in smoothing the fluctuation of the photovoltaic output and assisting the peak regulation of the system to maximize the effect of energy storage. According to the different functions of energy storage and discharge, three working modes of the energy storage system can be divided, namely peak clipping, peak clipping + smoothing, and peak clipping + transfer.

Peak clipping

During the peak output period of the photovoltaic power station, the battery energy storage system is controlled to charge the battery energy storage system with peak shaving as the application goal. After the photovoltaic output peak period, and during the photovoltaic daytime output period, the battery energy storage system is controlled to amplify the power and discharge to the battery energy storage system. The lower limit of the SOE working range, and then the energy storage system stops working, ensuring that the working time of the energy storage system is within the power generation time of the photovoltaic power station, without additionally increasing the working time of the photovoltaic power station, and reducing the work arrangement of the photovoltaic power station due to the configuration of the energy storage system. Impact.

The Key to China Photovoltaic + Energy Storage Market Outbreak

 In recent years, China is one of the huge drivers of the rapid growth of the global solar energy market. It is not only the world's largest demand country, but also the world's largest photovoltaic supply chain settlement. The photovoltaic supply chain runs from upstream to downstream, and more than 80% of the global supply is from within China.

In 2022, the Chinese market has entered a stage of parity and no subsidies. In the 14th Five-Year Plan, China also aims to reach 20% of renewable energy consumption by the end of 2025, 25% by 2030, and 1200GW of wind + solar cumulative installed capacity.

This year, the Chinese market is expected to have more than 80GW of photovoltaic power plant projects installed, and maintain a high growth rate. It is expected that the demand for photovoltaic modules in a single year will reach more than 170GW in 2025. Looking at the composition of China's photovoltaic demand this year, it is expected that 43GW of the 83GW demand will come from distributed projects, and 25GW of household photovoltaic projects will lead to a new high in the total distributed volume, which is expected to account for 52% of China's installed capacity. Last year was the first time in China's history that the proportion of distributed projects exceeded that of centralized ones. Not only was the growth trajectory of distributed projects obvious to all, but it also set an important milestone for distributed projects.

Despite this, the demand for 40GW of ground power station projects expected to be added this year is also a record high. As the energy storage policy is mainly focused on centralized projects, it is expected that the energy storage industry will also flourish under the fermenting demand this year. Qinghai, Inner Mongolia, Ningxia and Xinjiang are the top five demand markets for ground-based photovoltaic projects. In addition, the first phase of 100GW of 400GW large-scale wind + solar projects in the desert has also started, injecting more imagination into the centralized energy storage market.

In 2022, the PV + Storage policy will be Reinforced

In line with the rapid growth of the photovoltaic market, China will begin to more actively promote the solar + storage policy in the pre-balance sheet market in 2021. Statistics up to August 2021 show that 20 provinces and cities in China have promulgated the solar + storage policy, requiring The newly built photovoltaic power station needs to support 5-20% of the energy storage, which can be divided into priority incentives and mandatory matching according to the strength of the policy. At that time, most provinces were mainly based on the soft policy of priority incentives, and the matching ratio was mostly 10%. With the passage of time to June 2022, in addition to more provinces also promulgating the light + storage policy, some provinces have also turned the preferential incentive policy into a mandatory package, and the proportion of the package has also increased, which fully demonstrates China's The determination to develop energy storage on the side of new energy power generation.