The World Bank believes supporting battery storage projects in China will help the country curb its renewable energy curtailment practices and also mobilize private investment in the storage segment. Pictured is the city of Tianjin in China. (Photo Credit: Yang Aijun/World Bank)

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The World Bank has approved a $300 million loan to support the Renewable Energy and Battery Storage Promotion Project in China with the intent to increase the integration and utilization of renewable energy by deploying battery storage systems at scale.

Hua Xia Bank, a publicly listed commercial bank in China, will implement the project and also provide co-financing of at least $450 million. It will support small and medium enterprises to implement financially and technically well-structured battery storage projects.

Noting the constraints China faces in a smooth transmission towards renewable energy, especially wind and solar power, compounded by gaps in the regulatory framework for electricity trading between provinces, the World Bank says this project will address these constraints and support China’s overarching energy transition goals.

“By providing financing for battery storage and distributed renewable energy applications, the project will reduce curtailment of renewable energy capacity and thus encourage further investments into changing China’s energy mix,” said Martin Raiser, World Bank Country Director for China. “Parallel technical assistance will help improve the policy and regulatory framework for green energy technologies, thereby reducing risks and encouraging private investment.”

The project is part of the World Bank’s $1 billion battery storage investment program it launched in September 2018, which it followed up with the Energy Storage Partnership (ESP) to promote international cooperation on battery storage solutions. The Global Environmental Facility (GEF) and the Energy Sector Management Assistance Program (ESMAP) will provide technical assistance for policy and regulatory reforms, shaping appropriate technology and safety standards.

Wind and solar power in China has mainly grown because of generous subsidies the government has been providing to these two segments, however it was unable to transport and pay for all on time, which led to curbing of renewable energy generation that in turn meant losses for developers. The government is now preparing the country for a subsidy free wind and solar power phase. In May 2019, it released the first phase of 20.76 GW subsidy free solar, wind and distributed renewable energy projects in 2019 (see China Approves 20.76 GW Subsidy Free RE Capacity). Battery storage is then one of the ways to help the industry utility its full potential.