In today’s rapidly developing power industry, energy storage stations are a key technology that is gaining increasing attention worldwide. The successful grid connection of the first grid-side energy storage project in Pingdingshan—the Lingshan Energy Storage Station—on November 19, 2018, marked the practical application of grid-side storage technology in the region. Located within the 110kV Lingshan Substation, this project has a power capacity of 4.8 MW and a battery capacity of 4.8 MWh, utilizing a fully prefabricated cabin layout with lithium iron phosphate batteries connected to the grid via 10 kV cable lines. The Lingshan Energy Storage Station acts as a “power bank” for the Pingdingshan grid, providing peak-shaving, black start, demand response, and other services. It effectively mitigates peak load pressures and promotes the consumption of renewable energy, offering new pathways for the safe and stable operation of the grid.
1. Why Does the Power System Need Peak-Shaving?
The power system consists of generation and consumption sides. In China, the generation side includes hydroelectric, thermal, nuclear, solar, wind, and other renewable energy sources, while the consumption side comprises factories, enterprises, malls, and households. Energy storage stations, which can both consume and generate electricity, play an important role in this system. Due to the imbalance between generation and consumption, it’s necessary to increase the output of generators during peak loads and decrease it during low loads, sometimes even shutting down certain units. Some generators are specifically designed for peak-shaving, known as peak-shaving units.
2. What Are the Methods of Peak-Shaving in Power Systems?
Peak-shaving strategies must ensure that surplus energy can be absorbed during low loads and increase energy supply during peak loads. Currently, the following sources can be used for peak-shaving in power systems:
- Pumped Storage Units: Mature and reliable technology with large capacities, effective for peak-shaving, but challenging to site and requires substantial land.
- Generator Units: Includes coal and gas turbine units, which respond slowly and cannot absorb surplus energy from the grid.
- Energy Storage Stations: Require less land, have significant peak-shaving effects, and fast response times, though they entail high initial investments and shorter battery lifespans.
3. How Do Energy Storage Stations Participate in Peak-Shaving?
The government encourages the installation of energy storage facilities at centralized renewable energy generation bases to participate in peak-shaving auxiliary services. Energy storage facilities above 10 MW are subject to unified scheduling by power dispatch agencies and can participate in peak-shaving jointly with power plants or independently. User-side storage facilities can only participate in deep peak-shaving and start-stop peak-shaving.
4. Investment Return Calculation for Energy Storage Stations Participating in Peak-Shaving
The investment returns for energy storage stations come from the price difference between peak and valley electricity rates and peak-shaving compensation. Taking Southern Power Grid as an example, energy storage stations are compensated for charging services based on instructions from power dispatch agencies, with a specific compensation standard of 0.05 million CNY/MWh for charging.
Assuming the installation of a 20 MW/5h energy storage system and calculating based on the wind power grid price for discharge, the total income from participating in peak-shaving is as follows:
- Daily Peak-Shaving Income: Deep peak-shaving fee = 40 MWh * 500 CNY/MWh = 20,000 CNY
- Daily Sale Income: Sale income = 40 MWh * 1000 * 0.6 CNY/kWh * 0.8 = 19,200 CNY
- Annual Income: Annual income = (20,000 + 19,200) * 300 = 11.76 million CNY
- Investment Payback Period: The total cost of a 20 MW/5h energy storage system is 48 million CNY, resulting in a payback period of 4.08 years.
Through this analysis, we can see the significance of energy storage stations in peak-shaving within power systems and their potential investment returns. GeePower is committed to providing the latest storage technologies and market analysis to assist clients in making informed investment decisions.