IEEE Power & Energy Magazine - July/August 2021 - 64

used so that the unit cost of providing the service can be
reduced. In the actual implementation of cloud-based energy
storage, distributed resources have also been expanded from
batteries to a variety of solutions, such as variable loads and
heat storage.
In this article, we introduce a framework for aggregating
distributed storage resources, including relevant technology
platforms and business models. The article also
analyzes four kinds of cloud-based energy storage coordination
approaches that have been developed, are being implemented,
or have the potential for implementation in China.
The key factors that enable the transition from research to
business as usual are also discussed.
The Concept of
Cloud-Based Energy Storage
Concept Framework
Electric power systems need to operate with a balance of
supply and demand since electricity cannot be economically
stored at the grid scale. Pumped-hydro facilities can store large
amounts of electricity, but they are highly site dependent and
may be so expensive that they cannot be considered a resource
that is readily available. In China, the rapid growth of variable
renewable energy is making the need for energy storage
more urgent. Grid-scale electricity storage has been identified
by MIT Technology Review as one of the 10 most difficult
technology problems in the world. It is also regarded as a key
solution for China's power system, which is characterized by
high renewable penetration. In the past two years, China has
launched several demonstration projects for grid-scale energy
storage to cope with the increasing capacity of renewables.
Such storage was considered a transmission capital asset
so that its cost was accounted for as a transmission investment
and internalized in use-of-network charges. However, the
Chinese government stopped this cost allocation in 2019 to
avoid the risk of a significant increase in transmission charges.
As a result, grid-scale storage can be invested in only by generation
companies, consumers, and third parties. While the
cost is decreasing every year, it is still usually not economical
for a single user to install storage for its own use, e.g., to
shave its peak load and to accommodate curtailed renewable
electricity. Therefore, the concept of cloud-based aggregation
was proposed to share distributed energy storage resources
across multiple users to increase their cost effectiveness.
Cloud-based energy storage includes a shared pool of distributed
energy storage resources that provide on-demand-access
storage services to power systems and consumers. Kang proposed
this concept in 2015; the strategy began to be implemented
in China in 2019, and it has been extended in stride
with the rapid development of the " energy Internet " there. The
expanded concept framework is shown in Figure 1.
Flexible Distributed
Energy Resources
Cloud Energy
Storage Customer
Frequency
Regulation
Storage From
Industrial Consumers
Flexible Industrial and
Commercial Load
Electric Vehicle
Uninterruptable Power Supply
of Communication Base
Storage From
Residential Storage
and Flexible Load
Virtual Storage From
Heating Networks and
Heat Inertia From Buildings
figure 1. The cloud energy storage concept framework.
64
ieee power & energy magazine
july/august 2021
Power Grid
Renewable Energy
Producer
Industrial and
Commercial
Consumer
Cloud
Energy Storage
Transmission
Congestion
Management
Ramping
Peak
Shaving
Offering
Services
Dispatch
Offering
Services
Storage
Demand
Control
Aggregation
IEEE Power & Energy Magazine - July/August 2021

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