The time-of-use electricity pricing policies successively introduced by various regions have dealt a heavy blow to the entire industrial and commercial energy storage sector.
Take Jiangsu Province, for example, where a recent adjustment to its TOU pricing policy shifted the original "agent purchase electricity price + transmission and distribution electricity price" to a "agent purchase electricity price" alone. This resulted in a drop in the peak-valley price gap by over 30%, significantly weakening the industrial and commercial energy storage sector, which relied on "peak-valley arbitrage" for its main profit.
However, while closing one window, the new policy also opened a new one for industrial and commercial energy storage.
According to a recent report by State Grid Jiangsu on the hotel industry, for example, a Nanjing hotel, a single-use commercial electricity user with a capacity of 100 kVA or above, reported data showing that before TOU pricing was implemented, the hotel's annual electricity bill was approximately 13.83 million yuan. After the new policy, the annual bill, using TOU pricing, was approximately 14.19 million yuan, a sudden increase of approximately 360,000 yuan.
For energy-intensive hotels, especially high-end ones, the new policy has significantly increased electricity costs. Considering that the total daily electricity consumption of this hotel in Nanjing during peak hours is about 17,600 kWh, if it is equipped with 9MW/18MWh battery energy storage, charging and discharging it once a day can actually save about 3.67 million yuan in electricity bills.
The industry is constantly changing. Under new policies, if industrial and commercial energy storage relies solely on peak-valley arbitrage, it will inevitably not survive long-term. Instead, "energy storage +"—a model that looks beyond static arbitrage returns and explores new operational service models and application scenarios—holds greater promise.
Amid this trend, the "energy storage + hotel" model is becoming increasingly popular both domestically and internationally!
High Energy Consumption—A Persistent Pain for High-End Hotels
The hotel industry, especially high-end hotels, is known for being a heavy energy consumer. Year-round air conditioning, 24-hour lighting, uninterrupted hot water, smart home systems, and other essential amenities for high-end hotels ensure a comfortable guest experience, but the costs and demands of electricity are constantly increasing.
In coastal cities with high electricity demand, some hotels even experience emergency power rationing during peak periods, significantly impacting the guest experience. During the high temperatures of the past two months, the Ningbo Municipal Energy Bureau also issued an official announcement advocating that businesses and hotels reduce the use of high-power electrical equipment, public facilities, and advertising lighting.
Under time-of-use electricity pricing policies, hotels face further increased operating costs related to energy consumption. A hotel manager revealed, "Our annual electricity bill currently exceeds 10 million yuan, and with the introduction of time-of-use electricity rates, the burden has become even heavier."
Regarding energy consumption, relevant data shows that as of November 19, 2023, there will be 344,000 hotels (15 or more rooms) in China. The average annual electricity consumption per square meter of hotels is over eight times that of ordinary urban commercial housing, accounting for 0.48% of the nation's annual electricity consumption. Analysis of historical energy consumption data shows that hotel air conditioning accounts for 45% of electricity consumption, lighting for 20%, and power and other expenses for 35%.
In the high-end hotel sector, data from 2024 shows that the average energy cost rate for hotels will be 11.02%, up from 8.73% in 2019, and energy consumption is expected to continue to rise. Some analysts point out that the current energy cost rate for high-end hotels, in addition to being affected by rising energy prices and policy, also reflects significant room for improvement in energy management.
Under this new trend, energy storage is increasingly finding its way into hotels.
Looking back at the first half of this year, seven regions, including Jilin, Sichuan, the Eighth Division of Xinjiang, Anhui, Jiangsu, Jiangxi, and Hunan, officially updated their time-of-use electricity pricing policies. Approximately 22 provinces and cities adjusted their midday electricity rates to flat or valley periods, such as Shaanxi's 4-hour schedule, Jilin's 3-hour schedule, Jiangsu's 2-4-hour schedule, and Anhui's 2-3-hour schedule. This is clearly intended to leverage energy storage to boost midday solar consumption.
For example, the EPC tender announcement for the distributed energy storage power station at the Hyatt on the Bund Shanghai (1MW/2.32MWh) calls for investment in the construction of 10 packaged energy storage systems with a capacity of no less than 100kW/232kWh. These systems will be configured to dynamically increase capacity and provide emergency power supply, using two peak-hour discharges and one valley-hour charge, based on Shanghai's daily peak and valley periods.
A 2.78MWh energy storage project deployed by Payne Technology for a hotel was also recently successfully connected to the grid. It is understood that the project deployed 12 232kWh liquid-cooled energy storage integrated cabinets, and was equipped with an intelligent energy storage scheduling system. Actual operation data showed that the hotel's annual electricity cost was significantly reduced by 15%, key areas can achieve continuous power supply for more than 2 hours, and the project investment recovery period was shortened to about 4 years.
The Four Points by Sheraton Hangzhou Longxi Silicon Valley recently deployed seven NARI Jibao EnergyOne liquid-cooled integrated energy storage cabinets. After over six months of operation, the system is expected to save the hotel approximately 700,000 yuan in electricity bills in the first year, with a system efficiency exceeding 88.8%.
Hotel-based energy storage is also booming internationally. For example, the Austrian government plans to achieve 100% clean electricity supply by 2030 and has issued a series of supporting policies. As a result, more and more hotels there are adopting integrated solar-plus-storage solutions.
Inco Energy Storage recently successfully deployed and officially began operating an energy storage project at a high-end hotel in Austria. By deploying Stars Series integrated energy storage cabinets, the system seamlessly switches between on-grid and off-grid modes. By optimizing power usage strategies, the hotel has successfully reduced peak electricity costs and improved overall energy efficiency.
What are the prospects for industrial and commercial energy storage combined with hotels?
Against the backdrop of continuously optimizing electricity pricing policies and rapidly evolving energy storage technologies, the profit models for hotel-based energy storage are also expanding.
The most basic are peak-valley arbitrage and demand response. Taking the 1MW/2MWh energy storage project at the Shanghai Expo InterContinental Hotel as an example, the project, through a "two-charge, two-discharge" strategy, will generate revenue of 500,000 yuan in 2024 and generate additional revenue from participating in grid demand-side response, shortening the payback period to 5-7 years.
On the other hand, industrial and commercial energy storage clusters can also participate in grid peak shaving through a virtual power plant (VPP) model, further increasing returns by 2-3%. For example, a European hotel's energy storage system is deeply integrated with grid dispatch, responding to real-time instructions to adjust charging and discharging strategies, maximizing photovoltaic utilization and generating ancillary service revenue.
In addition, other innovative business models are emerging. For example, one investor is installing energy storage systems for hotels with a "zero down payment" model, achieving a win-win situation through sharing energy savings. For example, the Anjiman Nature Resort Hotel is generating annual revenue of 197,000 yuan through a 0.2MW/0.43MWh energy storage system. However, this model is currently more suitable for small and medium-sized hotels with limited funds.
From a medium- to long-term perspective, the integration of hotels and energy storage applications shows three main trends.
One is the application of hydrogen energy storage in specific scenarios. For example, a Japanese hotel is currently piloting a "photovoltaic + water electrolysis hydrogen production + fuel cell" system, achieving zero-carbon emissions for nighttime power supply, providing a reference for the transformation of high-end hotels.
Secondly, there is the deep integration of building energy management. Using BIM technology, energy storage systems are integrated with building structures and air conditioning systems. For example, a German hotel uses phase change energy storage walls to regulate room temperature, reducing air conditioning load by approximately 30%.
Also, there is the integration of energy storage with cultural tourism. For example, Taining, Fujian, has developed a "solar storage and charging microgrid" into a tourist experience. Visitors can view the hotel's green electricity usage data in real time through an app, creating a new cultural tourism brand combining "energy education and low-carbon consumption."
At this critical juncture in the energy transition, new application scenarios for energy storage are still in the exploratory stage, but the direction is becoming increasingly clear. Of course, there are also challenges, such as how to reduce initial investment costs, how to balance the iteration of energy storage technology, and how to reduce subsequent operation and maintenance costs, including safety issues. However, as supporting policies continue to improve and business models continue to mature, the application potential of scenarios such as industrial and commercial storage + hotels has already emerged. The energy storage industry, which has broken away from the traditional, single-income model, is bound to usher in a new round of vitality.
