2022.07.05 ZHU, He (George)、NI, Tianling (Carey Nee)、LIU, Xin_lea、 CHEN, Qingyuan、ZHAO, Jie
In recent years, many fire hazards and explosions have occurred in energy storage power stations, with resultant employee casualties and, on occasion, the death of firefighters. Some of these incidents have been due to problems with batteries or the management systems used in electrochemical energy storage power station projects (hereinafter referred to as "Energy Storage Projects") (e.g., thermal runaway caused by sudden short-circuit battery failure), and some have been caused by unseen safety risks in energy storage sites (e.g., a failure to meet battery room standards). These incidents have raised alarms regarding the safety management of Energy Storage Projects. In this article, we briefly look at the legislative changes that have been introduced in the last two years relating to the operational safety of Energy Storage Projects.
I.Recent legislative developments in safety regulations for Energy Storage Projects.
On August 24, 2021, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) released the Interim Measures for Safety Management of Electrochemical Energy Storage Power Stations (Draft for Comment) (hereinafter referred to as "Draft Safety Management") to regulate the life cycle of Energy Storage Projects. This draft covered areas such as project approval, production and quality control, design consultation, construction and acceptance, grid connection and scheduling, operation and maintenance, decommissioning management, emergency management and incident treatment.
The Draft Safety Management specifies a management policy of "prevention-oriented, comprehensive management and safety first" for Energy Storage Projects. It requires that the construction unit of an Energy Storage Project should establish a safety risk grading system and a mechanism for the management of incidents and hidden dangers. The Draft Safety Management further clarifies details regarding safety supervision; for example, it requires that all filing of Energy Storage Projects happens prior to the start of construction. It ensures the "Three Simultaneities" of safety facilities and prohibits the building of energy storage power stations in crowded locations, in high rise and underground buildings, as well as in the vicinity of flammable and explosive materials. It also requires Energy Storage Projects to pass a fire safety inspection before a commercial operation commences.
Although the Draft Safety Management has not yet taken effect, we can predict that safety regulations for Energy Storage Projects will become a high priority. The Notice of the Comprehensive Department of the National Energy Administration on Strengthening the Safety Management of Electrochemical Energy Storage Power Stations (NEA General Safety [2022] No. 37) (hereinafter referred to as "NEA Notice") issued by the NEA and which came into effect on April 26, 2022, also reflects this. The NEA Notice emphasized a philosophy of "pro-people, pro-life" and highlighted the priority of the safety management of Energy Storage Projects.
The NEA notice stipulates the responsibilities of the relevant participants in Energy Storage Projects, i.e. (i) the landlord (project legal person) shall be the main responsible party for the safe operation of Energy Storage Projects, (ii) (in the event of subcontracting the project’s operation and maintenance) the responsibility of the project landlord and the operator for the operation and maintenance of the Energy Storage Project shall be clear and the landlord shall supervise the operator’s implementation of the regulations and standards, and (iii) the person in charge of firefighting and the firefighting safety manager shall duly perform the relevant fire safety management duties. The Circular of the General Office of the National Development and Reform Commission and the General Affairs Department of the National Energy Administration on Further Urging New Energy Storage to Participate in the Power Market, Scheduling and Operation (NDRC Operation [2022] No. 475), issued by the NDRC and the NEA on June 7, 2022 further strengthens the management of the construction of new energy storage projects as well as the operational safety supervision, and urges the relevant electric power enterprises to strictly implement the NEA Notice. It also encourages electric power enterprises to actively participate in the construction of national safety monitoring information platforms for Energy Storage Projects.
In terms of echelon battery use in Energy Storage Projects1, the NEA on September 24, 2021 issued the new energy storage project management specifications (Temporary) (National Energy Development Science and Technology Regulation [2021] No. 47), which strengthen the life cycle concept, and stipulates that echelon battery use shall be subject to safety assessment reports. Energy Storage Projects shall set up an online monitoring platform to monitor live battery performance parameters, conduct regular maintenance and safety assessments, and make emergency plans. We have observed in practice that regulatory authorities usually adopt a strict attitude towards the approval of echelon battery use in new Energy Storage Projects2.
II.Remediation programs and actions for the safety of Energy Storage Projects
On November 30, 2021 the Office of Work Safety Committee of the State Council issued the Special Remediation Plan for Safety Risks and Hazards of Electrochemical Energy Storage Power Stations (Office of Work Safety Committee [2021] No. 9) (hereinafter referred to as "Remediation Plan"), requiring local authorities and enterprises to inspect established and evolving Energy Storage Projects to mitigate any safety risks.
After the enforcement of the Remediation Plan, we observed that various local authorities had successively introduced solid hidden risk assessment plans and carried out special projects to rectify the safety risks of Energy Storage Projects. Based on our observation of the action plans already implemented in Beijing and Shanghai, we have noted the following regulatory trends.
1. Main regulatory authorities. Besides the emergency management departments and the fire departments, other authorities in charge of the safety supervision of Energy Storage Projects include the local competent authorities of the NDRC and NEA, industry and information authorities and market supervision authorities (who for instance, investigate and punish manufacturers and suppliers who provide unqualified energy storage batteries). In the event of a safety incident, apart from an administrative penalty and depending on the nature of the violation and the extent of the injury, the management in charge of an Energy Storage Project may also be held liable from a criminal law perspective.
2. Key regulatory areas. Safety risk assessment of Energy Storage Projects involves multiple dimensions, including the planning and citing of Energy Storage Projects (e.g., project approval or the filing of documents), design and layout (e.g., fire hazards), building and structure (e.g., fire resistance rating compliance and safety exit settings), energy storage system safety (e.g., battery quality, fire and explosion prevention measures), fire protection systems and safety facilities (e.g., fire alarm systems, lightning protection design compliance), and safety and emergency management (e.g., personnel qualifications, safety production regulations and emergency planning). A safety risk assessment may be carried out by a document review and a site inspection by the regulatory authorities.
3. The "Bottom line" of Energy Storage Project safety supervision. In certain circumstances, an Energy Storage Project may be ranked as high-risk. Consequently, such a project may be ordered (i) to rectify the violations in a timely manner, and (ii) in the event of a failure to rectify the significant incident risks or ensure the safety before such risks are eliminated, to cease production and operations or even shut down the station. Such specific circumstances may include the energy storage power station designer or the constructor lacking the required qualifications, the energy storage power station being located in the basement of a building (semi-basement), the energy storage system has access to or above the voltage level of 10 (6) kV and has failed to obtain the grid connection test report from the qualified institutions, the battery management system fails to operate on a regular basis (e.g. failing to monitor live battery status, failing to upload alarm information, or to launch battery protection in a timely manner), using or keeping flammable and explosive hazardous chemicals in an energy storage power station, and the occurrence of a significant safety incident within the last three years, or the occurrence of more than one safety incident with fatalities within the last year. The operator of an Energy Storage Project should pay particular attention to avoid any of the aforementioned circumstances.
III. Our Suggestions
No detail is too trivial when it comes to safety, especially concerning Energy Storage Projects. Local emergency departments are organizing various safety inspections (please see our article “Fifteen Measures for Work Safety’ and Upcoming Nationwide Work Safety Inspection”3 for more details), and we remind the operators and investors of Energy Storage Projects to:
1. Pay attention to the relevant legislative developments in energy storage safety management, fully and accurately identify and implement the regulatory requirements, and together with central and local departments sort and reduce safety compliance risks in a timely manner.
2. Pay attention to the relevant safety legislative developments regarding production, and strictly implement production safety responsibility systems and the requirements of the Production Safety Law to strengthen the management of supply chains (for more details, please refer to our article "Safety Management Agreements Ensure the Safety of Enterprises"4).
3. Conduct EHS internal and external compliance audits on a regular basis to identify and rectify any hidden dangers. For more information, please contact your EHS lawyer or consultant.
1. "Echelon use" means the necessary testing, sorting, dismantling, battery repair or reorganization of used power batteries into secondary use battery products.
2. For instance, the Notice on the Public Call for New Energy Storage Projects to be Built in the 14th Five-Year Plan issued and implemented by the Beijing Municipal Commission of Urban Management on March 30, 2022, prohibits new Energy Storage Projects from echelon battery use.
3.https://mp.weixin.qq.com/s/VqnLxyCZERqPWD6MkRRAHQ
4.https://mp.weixin.qq.com/s/mDGg91Xw5zmScd85D15ujg
