China’s policies that contribute to lower costs for thermal energy storage are part of a broader strategic framework to develop and commercialize energy storage technologies, including thermal storage, as a key component of its clean energy transition.
Key Policies Contributing to Lower Costs for Thermal Energy Storage in China
1. National Development and Reform Commission (NDRC) and National Energy Administration (NEA) Energy Storage Plans
China’s 14th Five-Year Plan for Energy Storage, issued in March 2022, articulates explicit goals to boost energy storage capacity and reduce cost per unit by 30% by 2025. This plan covers a broader set of energy storage technologies, including thermal energy storage, with a target for capacity expansion driven by both government and market participation. This policy framework supports technology innovation, local manufacturing, and economies of scale that drive down costs.
2. Mandatory Allocation of Energy Storage Capacity
Since 2017, China implemented the “mandatory allocation of energy storage” policy, requiring renewable energy projects to include energy storage systems with capacity allocation rates between 5% and 20%. This policy greatly increases demand for storage solutions, including thermal energy storage, stimulating large-scale deployment and technology development that help reduce costs through learning and scale.
3. Price Mechanisms and Subsidies for Energy Storage Participation in Power Markets
The 2018 “Opinions on Innovating and Improving the Price Mechanism for Promoting Green Development” by the NDRC introduced subsidies and more favorable price structures encouraging energy storage—such as peak shaving and valley filling services—in electricity markets. These financial incentives lower the effective cost barriers for storage deployment and accelerate market adoption.
4. Pilot Projects and Demonstration Programs
Since the 13th Five Year Plan period, China has promoted pilot and demonstration projects across various energy storage technologies, including thermal energy storage. These projects validate technology, improve safety standards, and enable industrial learning, all contributing to cost reductions over time.
5. Emphasis on Domestic Technology Development and Industrial Ecosystem
China’s policy efforts encourage domestic development of core technologies and equipment for energy storage to reduce reliance on imports and stimulate local industry growth. This strategic focus drives innovation, local manufacturing cost advantages, and supply chain improvements that reduce costs.
Summary Table of Policies and Their Cost-Reducing Effects
| Policy Aspect | Description | Cost Reduction Mechanism |
|---|---|---|
| 14th Five-Year Plan for Energy Storage | Targets 30% cost reduction by 2025 | Technology innovation, scale-up, commercialization |
| Mandatory Energy Storage Allocation | Storage required with new renewable projects | Drives demand and economies of scale |
| Price Mechanism and Subsidies | Subsidies for peak shaving and valley filling | Improves economic viability and incentivizes deployment |
| Pilot and Demonstration Projects | Validation and safety improvements | Reduces technical and financial risk |
| Domestic Technology Development | Support for local manufacturing and R&D | Lowers supply chain and import costs |
In conclusion, China combines mandatory deployment requirements, targeted cost reduction goals, supportive pricing and subsidy mechanisms, pilot projects, and a strong domestic technology push to lower the costs of thermal energy storage and other storage technologies. These integrated policies leverage market forces and government support to make thermal energy storage commercially viable and help China advance its renewable energy and carbon neutrality goals by promoting cost-effective energy storage solutions.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-policies-in-china-contribute-to-lower-costs-for-thermal-energy-storage/
