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Distributed Energy Storage Emerges as Key Solution to Distributed Solar Grid Integration Challenges in China


The rapid development of distributed renewable energy sources in China has led to a significant increase in surplus electricity fed back into the grid, exposing the limitations of the existing distribution network. As a result, managing distributed energy storage resources has become critical for furthering distributed solar energy development. With grid connection capacity for distributed solar reaching its limits in many regions, grid integration has become a major bottleneck, making distributed transformer area energy storage the primary solution.

A transformer area refers to the power supply area of a single transformer, and transformer area energy storage systems are installed on the low-voltage side of these transformers. These systems are essential for dynamic capacity expansion, load fluctuation suppression, and smoothing the output of distributed renewable energy within the transformer area. Distributed solar includes both commercial and residential photovoltaics (PV). Due to the lower residential electricity rates in China compared to commercial rates, commercial PV primarily focuses on self-consumption with excess power fed into the grid, while residential PV is mainly geared towards full grid feed-in. However, residential PV systems are typically located in rural areas with lower electricity demand and weaker grid capacity, making low-voltage transformer areas a focal point of concern.

Rapid Growth in Residential PV Drives Demand for Transformer Area Storage

The installation of residential PV systems in China has outpaced that of commercial PV systems. Given the current growth rate of residential PV, the demand for transformer area energy storage is expected to increase significantly by 2024. To date, over ten regions in China have implemented specific requirements for distributed PV to be paired with energy storage. Shandong province, which has the largest installed capacity of PV systems, is leading the way in exploring distributed transformer area energy storage.

In November 2023, the first residential PV project with integrated energy storage in China began operation in Dezhou, Shandong. The pilot project, developed by Guangying New Energy Co., Ltd., includes 20 sets of 100kW/215kWh lithium iron phosphate battery storage units. This initiative aims to facilitate further investments in PV and expand the installation of PV systems by using transformer area energy storage to meet grid connection requirements.

Transformer Area Storage: A Catalyst for PV Deployment

The sharp drop in PV component prices in 2023 has resulted in substantial profits, mostly benefiting terminal business agents who control end-user resources. However, these profits could be better utilized to develop transformer area energy storage, promoting industry growth. Historically, transformer area energy storage systems have been used to improve power quality in low-voltage distribution networks, especially in remote rural areas with insufficient transformer capacity and poor power quality. These systems can effectively address issues like low end-of-line voltage and three-phase imbalance.

The main function of transformer area energy storage is time-shifting electricity usage. In Shandong, integrating energy storage with residential PV has not only improved local power quality but also significantly enhanced the grid's ability to absorb renewable energy, reducing the burden on transformer capacity and balancing PV output with electricity demand. Thus, transformer area energy storage is a cost-effective solution to the grid integration challenges of distributed renewable energy.

Combining Transformer Area Storage with Centralized PV Aggregation

As early as 2021, Shandong pioneered the centralized aggregation model for distributed PV. This model involves using appropriately sized inverters based on the rooftop PV capacity and concentration, aggregating all PV projects in a village, and connecting them to the grid via dedicated step-up transformers. This approach not only enhances grid connection capacity but also allows the aggregated PV systems to be controllable, adjustable, and participate in the electricity market.

In conclusion, transformer area energy storage is pivotal in overcoming grid integration challenges for distributed PV systems. While there are various approaches to address low-voltage grid capacity issues, such as limiting midday PV generation or upgrading grid infrastructure, these solutions have significant drawbacks. Transformer area energy storage provides a balanced, scalable solution that improves both power quality and grid capacity for renewable energy integration.

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