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China is weighing the possibility of launching industry-wide investigations into its energy storage facilities over concerns about fire risks, Chinese outlet 21st Century Business Herald reported on Monday, citing a source familiar with the plans.
The recent boom in energy storage plants in China has led to low utilization rates at these facilities. Because the energy storage plants have been little used, they could unknowingly pose risks of fires, according to the source.
In addition, the booming rollout of energy storage has likely led to lower-quality batteries being manufactured and installed at some facilities, according to analysts.
Earlier this year, the National Development and Reform Commission (NDRC) ordered upgrades to address fire risks as well as a round of safety inspections after a fire erupted at a commercial energy storage facility in the eastern province of Zhejiang.
China also released early this year a national standard of “Safety Regulations for Electrochemical Energy Storage Stations,” putting forward clear safety requirements for the equipment and facilities, operation and maintenance, maintenance tests, and emergency disposal, the China Energy Storage Alliance (CNESA) said.
To address battery overcapacity, China issued last month new guidelines for its lithium-ion battery industry in a bid to put quality over quantity in battery manufacturing.
The new guidelines, effective from mid-June, layout minimum energy density standards and stricter battery specifications, as well as advise that companies should refrain from the construction of new plants that “simply expand production capacity.”
In 2023, China’s production of lithium-ion batteries alone was enough to meet global demand for batteries, BloombergNEF estimated earlier this year.
Globally, demand for lithium-ion batteries for the electric vehicle (EV) industry and stationary storage was estimated at around 950 gigawatt hours (GWh) in 2023. China’s output was enough to meet that demand, while the world’s battery manufacturing capacity was nearly 2,600 GWh last year, more than twice the demand.
