Some experts say that energy storage technologies still have a long way to go before they are cost-effective on a utility scale. But, cost-effective or not, China is deploying energy storage in a big way, with an eye toward restructuring its electrical system and creating a model for smart grid development.

BYD, a Chinese manufacturer of batteries, solar panels and other energy technologies, said construction has been completed on what could be the world’s largest battery-based energy storage station. The utility-scale project – in Zhangbei, Hebei Province, and owned by the State Grid Corporation of China (SGCC) – consists of 100 megawatts (MW) of wind power generation capacity, 40 MW of solar, 36 megawatt-hours (MWh) of battery-based energy storage and a smart power transmission system. The $500 million (about 3.3 billion RMB) project is part of China’s “Golden Sun” program, a national subsidy program for solar energy systems.

image via BYD

The energy storage portion of the power plant consists of BYD’s lithium-iron-phosphate battery technology, installed in long, low buildings that appear to have solar panels on their roofs. Although this type of battery is more commonly known for its use in electric vehicles (like the recently released e6), its 20-year service life and “peak shaving” and “load leveling” charge and discharge methodologies prompted SGCC to select it for this project. The project is the second commercial grid-tied battery storage system to use the technology since the Shenzhen Baoqing Battery Energy Storage Station was commissioned in October. That system, in the Longgang District of Shenzhen City, is said to provide 12 MWh of energy storage for use in load management, but is not directly integrated with renewable energy technologies.

With a goal of meeting 9.5 percent of its electricity needs with renewable energy sources by 2015, China needs to make major investment in smart grid and energy storage technologies in order to integrate variable energy resources like solar and wind power. As the world’s largest electricity consumer, China is positioning itself to take the lead in creating standards for these still-emerging markets.

Although the U.S. has seen grid-tied battery-based energy storage systems deployed in Texas and West Virginia (with others planned for Hawaii, California and Massachusetts), none of these comes close to the SGCC system in terms of size or scope. Unlike the U.S. projects, which are mostly smaller pilot projects deployed by independent developers or investor-owned utilities, the State Grid project is owned and operated by the largest utility in the world. The Chinese government-owned SGCC has a service area covering 88 percent of China’s national territory, and serves over 1 billion people. Its sheer size and influence will, undoubtedly, have an impact on which energy storage technologies rise to the top.

According to Xiu Binglin, deputy director of China’s National Energy Administration, the State Grid project is the new model: “The large-scale implementation of clean and green energy, such as wind and solar power, can only be realized when the technical difficulties of this new energy application in the utility system are resolved. This State Grid project demonstrates a solution and will be the model of development for China’s new energy resources.”