China's first energy storage subsidy program aims to accelerate deployments

August 08, 2021 | Case Study

China is one of the leading countries in renewable energy curtailment. Record curtailments can be attributed to the structure of China's power market, which lacks significant interprovince transmission and relies on short- and long-term contracts rather than a retail power market. Generous subsidies for solar and wind energy built China's renewable power landscape, but electrochemical energy storage has lagged due to unfavorable economics. China is in the process of building a retail power market, with the intention of deregulating its utilities in the future. Qinghai Province has become an unofficial testing ground for China's evolving grid challenges. It has the highest solar penetration in the country and is also one of the few provinces to use time-of-use rates for commercial and industrial users. Earlier this year, Qinghai became the first province to offer subsidies for energy storage.

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