Power industry carbon reduction path

Optimize power storage technology: Energy storage technology has been widely used in all aspects of the power industry value chain. In order to meet the challenges of system flexibility, the cumulative installed capacity of the overall energy storage system needs to be increased from about 32GW in 2019 to about 1,400GW by 2050; Among them, in addition to traditional energy storage methods such as pumped storage, the application of battery technology is extremely critical. Taking into account the characteristics of various energy storage technologies, lithium battery energy storage has become the preferred application in the short term because of its low operating costs, small space required and long cycle cycle.

Throughout the development of battery energy storage technology represented by lithium batteries, there are three major pain points that need to be solved. The first is the cost, the current electrochemical energy storage cost is high, but McKenzie expects that with the development of core technology, the cost of battery energy storage technology represented by lithium batteries can be reduced to the level of coal power generation cost in 2030, and even lower than the latter by 2050; Government and industry should work together to further broaden research into battery technology for the benefit of the electric vehicle and renewable energy sectors. Secondly, the safety of the battery, the government and the industry should attach great importance to the safety of the battery design, production and use, and reduce the safety accidents caused by the battery as much as possible in the application of battery technology. The last pain point is the recycling of battery resources, because the battery life is usually 5 to 8 years, recycling is an inevitable topic, and the relevant parties are still looking for a solution to maximize the recycling of batteries, while minimizing its burden on the environment. Local governments should develop policies to regulate the recycling industry, while providing subsidies to support the promotion of sustainable battery recycling solutions. The industry should optimize operations and promote the implementation of battery recycling norms.

Strengthen demand-side management and response: In addition to improving the flexibility of the supply side, demand-side reform is also an effective means to reduce the cost of energy storage system and improve the stability of the power system. The current demand-side improvement measures mainly include demand-side response (load adjustment by some users autonomously) and demand-side management (uniform consumption behavior adjustment covering a large number of users), both of which can reduce social peak demand for electricity. These two types of technologies are widely used in North America and most EU countries in China, and small demand-side response projects piloted in Shanghai and other regions are still in the testing stage. Based on the historical experience of the application of demand-side response technology in overseas developed countries, demand-side response can usually effectively reduce the capacity reserve demand by 4%~6%.

Looking to the future, the application of demand-side response technology in China can be combined with innovative scenarios such as electric vehicles and buildings to achieve peak electricity demand reductions far beyond historical data. The promotion of demand-side response requires the joint efforts of the government, enterprises and other stakeholders to solve the following five problems: first, clarify the strategic position of demand-side response and reach the consensus of the whole society on the importance of demand-side reform; Second, promote the market mechanism of electricity, and accelerate the pilot of the spot market of electricity by the government; The third is to strengthen the construction of demand response infrastructure, both power generation and users need a more localized power grid system, and the application of smart grid technology for dynamic regulation; In the short and medium term, subsidies are still the main tool for demand-side response, and local governments need to formulate clear plans to provide relevant incentives to enterprises in the best way. The fifth is to boost the rise of the power aggregation industry, with the deepening of the demand-side reform, the aggregation industry will naturally become the medium between the power supplier and the power user, but this needs the guidance and support of the government.

Challenge 2: There are practical difficulties in accelerating the phase-out of coal power: If the power sector's carbon emissions need to be "zero" by 2050, coal power plants will inevitably retire from history. China currently has 1,100GW of coal-fired power capacity, more than 50% of which needs to be phased out by 2040. Although the central government and provinces are gradually introducing the policy of phasing out coal-fired power plants, the implementation process not only faces the challenge of power supply stability, but also affects the short-term economic growth of regions highly dependent on coal to a certain extent. McKinsey has broken down China's provinces by coal dependence and renewable energy abundance, with different exit paths for different types of regions.