CAES plant starts commercial operation

China has begun full commercial operations at the world's largest compressed air energy storage plant in East China's Jiangsu province, marking a significant technical milestone in the country's push to solve the intermittency challenges of its massive renewable energy build-out.

The facility utilizes vast underground salt caverns to store energy. It officially became fully operational after its second unit was successfully connected to the grid and achieved full-load power generation, said its operator Harbin Electric Corp.

The project features two 300-megawatt non-supplementary firing units with a total energy storage capacity of 2,400 megawatt-hours, it said. Industry experts believe energy storage is a critical "buffer" for China's green transition.

As Beijing expands wind and solar installations to meet its 2060 carbon-neutrality pledge, the grid faces increasing pressure to balance supply when weather conditions fluctuate, they say.

Energy storage, as well as other novel business models such as virtual power plants and load aggregators, have been thriving in recent years, fostering dynamic interactions among diverse participants, Huang Xuenong, executive director-general for regulation at the National Energy Administration, has said previously.

These are crucial as China, the world's largest renewable energy consumer and producer, is dealing with the demands of rapidly integrating intermittent renewables, he said.

China has set ambitious targets, aiming for nonfossil energy to account for over 30 percent of total energy consumption before 2035. The combined installed capacity of wind and solar power is projected to exceed six times its 2020 level, striving to reach 3.6 billion kilowatts.

"Fast growth in renewable energy is driving demand for stronger grid management, leading to new operational models that guarantee system safety and stability," said Huang.

The CAES facility in Jiangsu functions as a giant underground battery. It uses excess electricity from the grid during off-peak hours to compress air into deep subterranean salt caverns. When power demand peaks, the high-pressure air is released to drive turbines and generate electricity.

Unlike older technologies, the Jiangsu plant captures the heat generated during compression using a molten salt and pressurized hot water system, achieving a world-leading system conversion efficiency of 71 percent, according to Harbin Electric Corp.

Once fully integrated into the regional grid, the plant is expected to generate approximately 792 million kWh of electricity annually — enough to power roughly 600,000 households, it said.

The facility is projected to reduce standard coal consumption by 250,000 metric tons and mitigate 600,000 tons of carbon dioxide emissions each year.

The launch comes as China seeks to diversify its storage infrastructure beyond lithium-ion batteries, which currently dominate the short-duration storage market.

The Center for Energy and Environmental Policy Research of Beijing Institute of Technology believes capacity for advanced storage solutions is projected to exceed 350 million kilowatts by 2030.

Industry analysts say the successful commercialization of large-scale CAES offers a viable solution for "long-duration" storage — systems capable of discharging power for hours or days rather than minutes.

Yang Kun, executive vice-chairman of the China Electricity Council, said emerging sectors, particularly energy storage, have successfully achieved commercial scalability, bringing fresh momentum to the power market.

"Salt cavern compressed air storage offers a distinct advantage in safety and longevity compared to electrochemical batteries," said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

The project is part of a broader wave of innovation driven by government policy. Beijing has set a target to reach over 180 gigawatts of "new-type" energy storage capacity — defined as storage other than traditional pumped hydro — by the end of 2027.

This policy support is positioning China as a primary testing ground for next-generation energy infrastructure, moving technologies from experimental pilots to commercial-scale realities faster than many global peers, said Lin.