The photo is sourced from Harmony Energy Income Trust Plc.
As expected, lithium-ion batteries were the most common type of energy storage systems, accounting for 95% of the capacities brought into operation in China in 2023. The fact that their share was so high can be attributed to, among other things, the availability of a domestic raw material base. According to the United States Geological Survey (USGS), China became the third largest lithium producer in 2022 (with a global share of 15%), as well as the world’s top producer of natural graphite (with a global share of 65%), the most “high-tonnage” component of lithium-ion batteries.
Renewable energy sources continue to be the key driver of the industry, and they require the use of energy storage systems due to their dependence on weather conditions. Global Energy Monitor estimates that China accounted for 47% of wind generators launched worldwide (33.1 GW out of 71.2 GW) in 2023, and for 50% of solar panels brought into operation globally (57.6 GW out of 115.8 GW). The need for energy accumulation to further balance the energy system is especially typical of regions with widely available renewables, in particular the Inner Mongolia Autonomous Region (northern China), which accounts for 15% of the capacity of wind generators operating in the country (50.7 GW out of 342.7 GW), as well as the Xinjiang Uyghur Autonomous Region (western China), where almost 10% of China’s solar capacity (28.5 GW out of 292 GW) is based.
In addition to lithium-ion batteries, China is commercialising other types of energy storage systems. This includes the compressed air energy storage (CAES) technology, which consists of two stages. First, excess electricity generated during the hours of low demand is fed to compressors, which pump compressed and cooled air into an underground storage, where the air is stored under high pressure. When demand in the energy system starts to grow, air gets released from the storage, heated by burning natural gas, and fed to a turbine. By rotating, the turbine sets off an electric generator. The world’s largest CAES project (with a total capacity of 600 MW) is currently underway in eastern China’s Shandong Province.
Energy storage is a fast-growing segment of the global energy industry. Global investment in battery construction has risen from $10 billion in 2021 to $21 billion in 2022 to $37 billion in 2023, according to a preliminary estimate by the International Energy Agency (IEA).
