The so-called "integrated implementation path of source-grid-load-storage" by people in the energy storage industry can be simply understood as the specific application of energy storage on the power generation side, the grid side, and the user side.
Generation-side energy storage corresponds to the "source" in the "source-grid-load-storage" model. The commercial operation model of generation-side energy storage involves using energy storage systems in conjunction with biomass power generation, photovoltaic power generation, wind power generation, and hydropower generation.
Power generation from wind, solar, and hydropower is intermittent and fluctuates, and the raw output power is also the same. It cannot be directly connected to the power grid for use. Only after the power is smoothed out by an energy storage system can it be input into the local power grid and generate profits.
In my country, power generation-side energy storage is widely used in areas with abundant sunshine and dense power plants, such as Qinghai and Ningxia, which can greatly reduce the curtailment rates of solar and wind power.
Grid-side energy storage corresponds to the "source-grid-load-storage" model. Grid-side energy storage can be directly used for electrical equipment such as computers, mobile phones, and refrigerators.
Pumped storage is a representative example of grid-side energy storage. As of 2021, pumped storage accounted for 86.2% of the global cumulative installed capacity of the power storage market. Its business operation model is as follows: a portion of the capacity of pumped storage power stations is rented by renewable energy owners, while the remaining portion participates in market transactions.
User-side energy storage corresponds to the "load (storage)" in the "source-grid-load-storage" system. User-side energy storage includes residential energy storage, industrial and commercial energy storage, and energy storage charging piles, and is targeted at electricity consumers.
User-side energy storage is in high demand in sparsely populated, vast areas such as Europe, the United States, and Australia, where the national power grid has limited coverage. In my country, driven by policy incentives, its growth rate has been relatively rapid in the past two years.
In my country, energy storage mainly has the following profit-making methods.
First, renewable energy consumption. my country's renewable energy storage mainly consists of photovoltaic, hydropower, and wind power storage, with hydropower storage being the most prominent. By storing renewable energy, the electricity can be sold when prices are high, thereby maximizing profits and significantly reducing the curtailment rate.
Second, peak-valley arbitrage. This is the most direct way to generate revenue from energy storage systems.
Users can save money and generate income simply by using energy storage batteries, charging them at night when electricity load is low and electricity prices are low, and using fully charged energy storage batteries to power the system during the daytime when electricity load is high and electricity prices are high.
Third, electricity cost management for large industrial users. Currently in my country, large industrial users with transformer capacity of 315KVA and above are subject to a two-part electricity price, which consists of two parts: the electricity consumption fee and the basic electricity fee.
Basic electricity charge refers to the electricity price charged based on the user's receiving transformer (charged by capacity) or maximum demand (charged on demand); while electricity consumption charge refers to the electricity price calculated based on the user's actual electricity consumption.
Large industrial users using two-part tariffs can reduce their basic electricity costs and save on electricity expenses by installing energy storage systems in industrial and commercial parks to monitor the power of their transformers and ensure that the transformer power is used within the limits.
Fourth, electricity demand response subsidies. When the regional power grid is strained and it is difficult to guarantee normal power supply for all users such as factories, commercial facilities, and residents during peak daytime hours, relevant agencies will issue electricity demand response subsidies.
Businesses that proactively respond to power supply balance and reduce electricity consumption can receive corresponding economic compensation.
Currently, Guangdong Province offers a subsidy of 3.5 yuan/kWh for user-side energy storage.
Fifth, spot electricity trading. This is a system where power generation companies are the main market players and electricity is the product, traded in a market-based manner. This is a completely new business model for the energy storage industry, with enormous potential.
However, the most common way to profit from energy storage at present is still peak-valley arbitrage. The greater the price difference between electricity and the lower the cost, the faster the cost recovery and the greater the profit.
