Storing sunshine: How northwest China is making renewable energy reliable

(Photos: Sim Tze Wei/SPH Media, unless otherwise stated)

Looking almost like an alien base from a sci-fi movie, over 10,000 mirrors are arranged in formation to harness solar energy in northwest China’s vast Gobi Desert. In a wind farm nearby, turbine blades atop towering 100-metre-tall turbine towers rotate with the wind, casting shadows on the ground that resemble three long arms ready to sweep up swirls of yellow dust.

This futuristic sight greeted foreign correspondents stationed in China in mid-October, at a solar thermal power plant in Dunhuang and a wind power base in Guazhou. Both Dunhuang and Guazhou are located at the western end of the Hexi Corridor; the former enjoys over 3,000 hours of sunshine annually, while the latter is known as the “world’s wind warehouse”.

Reporters at the new energy base were immediately awed by the cutting-edge technology, in addition to getting a harsh taste of the blazing sun and howling wind in the vast desert.

“Behind every harsh sensation lies resources and money,” said a Gansu province official, in a vivid description of the close relationship between weather elements and new energy sources. 

Driven by the country’s “dual carbon” goals — reaching peak carbon emissions by 2030 and carbon neutrality by 2060 — China’s new energy projects have experienced rapid development in recent years. However, this has also led to concerns about overcapacity.

For instance, new energy projects that harness natural elements — such as wind, solar and hydropower — are as inherently unpredictable as the elements themselves. When the wind is too strong, the sunlight too intense, or the rainfall too heavy, absorption capacity cannot keep up, resulting in wasted wind, solar energy and hydropower. Conversely, power generation would be difficult if the wind is too weak or if there is insufficient sunlight or rainfall.

China entered a phase of large-scale new energy development in 2010, with grid-connected installed capacity growing rapidly. However, the issue of wasted wind and solar energy has emerged, due to the volatility inherent to new energy generation, lagging grid infrastructure and absorption mechanisms, as well as the reverse distribution of new energy resources and demand in China. Wind and solar resources are concentrated in the “three norths” (north China, northeast China and northwest China), while electricity consumption mainly occurs in the central-eastern and southern regions, where the population and factories are located. 

The problem of energy waste intensified around 2016, when a large number of photovoltaic power stations and wind turbines became idle. The construction of new energy facilities was even temporarily halted at one point, in some areas severely affected by wasted wind, solar and hydropower.

Taking Gansu as an example, the rates of wasted wind and solar energy have increased yearly since 2014, peaking in 2016 with an abandoned wind rate of 43% — the highest in the country — and an abandoned solar rate of 30%.

In 2017, Gansu was marked as a red zone for wind and solar investment, and all new energy construction projects were halted. After improving the transmission of new energy out of Gansu and increasing provincial electricity consumption, the issue of wasted wind and solar energy was effectively resolved, and Gansu was removed from the red zone for new energy investment projects in 2020.

As a result, energy storage has become an important condition for the development of new energy projects. Such new projects can capture and store excess energy when supply exceeds demand and release it during peak demand periods, thereby balancing out both the peaks and troughs of glut and scarcity by adjusting the input and output of the power grid. 

“You can think of it as a power bank for our mobile phones — once charged, it can release power anytime, anywhere. Wind and solar energy can generate power 24 hours a day, even at night,” explained Li Wenkui, general manager of Wontai Power (寰泰工业公司) in Guazhou.

Since 2017, many regions in China are making energy storage facilities a prerequisite for new energy projects, aiming to reduce the wastage of wind and solar energy.

In January 2022, China’s National Development and Reform Commission (NDRC) and the National Energy Administration jointly issued the 14th Five-Year Plan for the development and implementation of new energy storage. The document pointed out that new energy storage is crucial to achieving the dual carbon goals, in addition to being an important area for seizing international strategic advantages.

With policy support, the new energy storage market has experienced rapid growth. Statistics from the National Energy Administration showed that by the end of 2022, the installed capacity of newly operational energy storage projects in China had reached 8.7 million kilowatts, an increase of more than 110% compared with the end of 2021. Liu Manping, a senior economist at the price monitoring centre of the NDRC, noted in an article published in March that China has surpassed the US to become the world’s largest energy storage market and provider of energy storage products.

Energy storage can be divided into two main categories: short-duration storage and long-duration storage. Generally, energy storage technologies that can discharge energy for no less than four hours and have a lifespan of at least 20 years can be classified as long-duration storage. The Wontai 300MW vanadium redox flow battery energy storage equipment that the reporters visited is a long-duration one.

Involution is prevalent across various industries in China, and the energy storage sector is no exception. The price war started in the battery cell sector, which is experiencing structural overcapacity. Jinrong Zulin Wang (金融租赁网) reported that the average price of energy storage battery cells dropped from 0.90 RMB to 1 RMB (US$0.13 to US$0.14) per watt-hour at the beginning of 2023 to 0.40 RMB to 0.50 RMB per watt-hour by the end of the year, effectively halving the price.

According to Li, the price war involves the entire energy storage industry. However, as production of vanadium batteries is still in its early stages, there is no vicious price competition yet. At present, companies are more focused on making their products more environmentally friendly and stable.

But Li did not provide a direct answer regarding the price of his company’s vanadium battery storage products. He said, “It is hard to fix a price; it is always fluctuating. It is now on the pricier side, but the trend is on a continuous decline.”

Beijixing Chuneng Wang (北极星储能网) reported that the average winning bid price for all-vanadium redox flow battery storage systems was 2.778 RMB per watt-hour in 2023, a significant decrease compared with over 3 RMB in 2022.

At a photovoltaic industrial park about 20 kilometres west of Dunhuang, the 100 megawatt molten salt tower solar thermal power station by Shouhang Resources Saving also features energy storage capabilities.

Nearly 12,000 heliostats are arranged in concentric circles around a 260-metre-high heat-absorbing tower in the centre. This rather peculiar arrangement allows the computer-controlled mirrors to collectively reflect sunlight onto the heat-absorbing tower. The collected heat, stored in molten salt inside tower stores, generates high-pressure steam, which drives a turbine to generate electricity.

Liu Fuguo, general manager of Shouhang Resources Saving, explained that solar thermal energy can be stored in the molten salt pot of the heat-absorbing tower, enabling solar energy storage and achieving 24-hour electricity generation without wasting energy. Such storage capabilities therefore solve the problem of not being able to generate power at night.

In August, CCTV News reported that China’s renewable energy generation accounts for 35.1% of the total, up from 32% at the end of 2023. Statistics from the National Energy Administration also showed that China’s installed capacity for renewable energy exceeded 1.45 billion kilowatts in 2023, accounting for more than 50% of the country’s total installed power generation capacity and surpassing thermal power for the first time.

As the proportion of renewable energy generation increases, the development of energy storage has become a crucial guarantee for China’s energy security. In particular, long-duration storage is seen as the next big thing in China’s energy storage industry.

Li has assessed that it will be clear in three to five years “who the leaders are and whose products are better” in the long-duration energy storage market. As the market matures, however, an involutionary price war may also occur.

Speaking to the media at Guazhou Beidaqiao wind farm, Zhang Weimin, general manager of Jiuquan Taiyuan New Energy Company, optimistically predicted that China — with its vast land area — is highly likely to become a country where clean energy is the primary source of power generation, if energy storage technology continues to innovate and lower costs, and if most new energy companies are willing to adopt it proactively. 

He said, “You have seen it yourself — there is still a lot of land in the northwestern regions that hasn’t been equipped with wind or solar power yet. Some of this land can certainly be utilised. If energy storage technology can reach a level where energy generated during the day can be stored for use at night, enabling stable power usage round the clock, wouldn’t we be able to eliminate the need for energy generated from fossil fuels?”

This article was first published in Lianhe Zaobao as “中国绿电过剩问题靠“超级充电宝””.

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