China storage market growing, but electric vehicles still dominate battery demand, says AECEA


Annual ESS capacity additions in China could reach 43 GWh by the end of this year, says the Asia Europe Clean Energy (Solar) Advisory (AECEA). ESS shipments in China soared 80% year on year in the country in 2016, representing about 30.5 GWh of annual storage capacity.

However, roughly 60% of the batteries that were shipped in China last year were supplied to electric-vehicle manufacturers, while producers of diesel-EV vehicles soaked up 25.4% of battery orders, the AECEA says. By comparison, demand for stationary energy storage remains “relatively moderate.”

That said, the market for stationary ESS in China continues to grow. Roughly 101 MW of storage systems were installed in the country last year, from just 26 MW in 2015, the consultancy says. Cumulative ESS installations, meanwhile, grew by an annual rate of 71% year on year in 2016, from a yearly clip of just 22% throughout the preceding 12-month period. The AECEA claims that about 850 MW of storage projects are now in various stages of development throughout China, with 325 MW likely to be completed by the end of this year.

The consultancy believes that combined ESS production could reach 270 GWh by 2020, with roughly 200 companies in China now producing such technologies. About 80 companies announced plans last year to produce roughly 120 GWh of storage capacity, all of which is scheduled for completion by next year.

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However, a handful of suppliers currently dominate the Chinese ESS market. The AECEA says that the top 10 manufacturers produced about 78% of the systems that were sold in 2016. Chinese suppliers of lithium-ion batteries now account for about 25% of the global market, adds the firm, which closely tracks about 15 to 20 different suppliers.

Under its “conservative” forecast, AECEA says the deployment of stationary ESS could grow by an annual rate of 70% through 2020, bringing total installed capacity in China to 2.1 GW. However, it also acknowledged that up to 5 GW of energy storage capacity could be cumulatively installed in the country by the end of the decade.

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