Energy storage technology innovation, policy support and the green transition of energy in China

Based on the empirical evidence that energy storage technology innovations can promote energy green transition, this paper proposes a directed technical change model with energy storage technology and renewable energy technology. By using theoretical analysis and numerical simulation methods, it studies how to design policies to promote technological innovation for achieving energy green transition in the context of underdeveloped energy storage technology. We find that: 1) It requires simultaneously solving the negative externalities from environment and the positive externalities from technological innovation to achieve energy green transition, a combination of carbon taxes with price subsidies and preferential credit policies performs better than carbon taxes alone. 2) In order to promote innovations in energy storage technology and renewable energy technology, a strong policy is needed in the early stage with the two underdeveloped technologies. Later, the policy becomes weaker as the two types of technologies become more advanced, and eventually it can be completely withdrawn. 3) Price subsidies for the energy storage sector and the renewable energy sector should be adjusted based on the gap between energy storage technology and renewable energy technology, while credit preferential policies could keep similar between the two sectors. 4) Making policy needs to take into consideration the collocation ratio and complementarity of renewable energy and energy storage. The higher the share of energy storage or the stronger the complementarity is, the stronger the policy supports for energy storage should be, and the longer the duration should be. © 2024 Systems Engineering Society of China. All rights reserved.