Opportunities and challenges of flexibility technologies for achieving a net-zero electricity future in China

China’s impressive growth of renewable energy (RE) generation and rapid increase in summertime electric peak loads has created a need for a more flexible electricity system, crucial for managing the variations in renewable energy sources while ensuring energy supply reliability and security. 

The need for flexible generation capacity has led to a sharp increase in the development of new coal power plants as a stopgap measure.

A new report from the Centre for Research on Energy and Clean Air (CREA) and the International Society for Energy Transition Studies (ISETS) shows there exists a range of technologies that can help Chinese system operators to manage rising shares of variable renewable energy and rising electric peak loads. Successful deployment of flexibility and storage technologies is an integral aspect of China’s efforts to create a New Energy System (新型能源系统) with clean energy sources as its backbone.

The key technologies include more flexible operation of existing coal power plants, pumped hydro, battery storage, green hydrogen, thermal energy storage, demand-side response and vehicle-to-grid.

The report surveyed 38 Chinese domain experts for their perception of how the different technologies rank on technical feasibility, economic viability, enabling infrastructure, environmental performance and supporting market arrangements affecting the prospects for these technologies.

The report found that despite the existence of many clean flexibility technologies, their potential to be deployed on a large-scale to meet the fast-growing demand for managing additional variations introduced by China’s rapid growth of renewable generation in the short run are limited by several major issues, such as long lead times, high development costs and strict topological requirements for pumped hydro, rising mineral prices for battery storage and high costs for hydrogen production via electrolysis.

Retrofitting existing coal-fired power plants to be more flexible in their operation offers an immediate solution to satisfying the demand for system flexibility, allowing less power to be generated from coal and creating space for more clean energy in the grid. However, this will lead to lower operating hours for these power plants, which necessitates market and regulatory reforms to create more effective and technology-neutral remuneration mechanisms for acquiring system flexibility services, such as ancillary and capacity services. These mechanisms, once created, will also provide incentives for clean flexibility technologies to thrive when they become more mature.

Muyi Yang, Deputy Secretary, ISETS; Xunpeng Shi, President, ISETS; Xing Zhang, Former CREA Senior Analyst, CREA; Shurui Wang, Institutes of Science and Development, Chinese Academy of Sciences

Partners: International Society for Energy Transition Studies (ISETS)