Since 2020, the acceleration of energy transformation has largely driven the demand for energy storage batteries, while contributing more and more to the growth of lithium-ion batteries. According to incomplete statistics, in 2022 alone, there will be 26 expansion projects related to energy storage batteries, with a total investment of more than 300 billion RMB and a total production capacity of 820GWh.
With the acceleration of industrial development, in addition to the continuous technological iteration of companies, products also need to gradually adapt to more subdivided fields. The diversified characteristics of energy storage applications are obvious, and the requirements for energy storage batteries in different occasions have obvious differences.
1. The five features of the energy storage lithium battery track are obvious
Energy storage lithium batteries can be divided into three categories according to the terminal application fields: electric energy storage, home energy storage, and communication energy storage. Among them, power energy storage includes power generation side, grid side and industrial and commercial user side energy storage occasions. In this field, energy storage mainly cooperates with power peak regulation, auxiliary dynamic operation and grid connection of renewable energy. Home energy storage (including portable energy storage) mainly serves households, outdoor sports, and emergency rescue. The charging capacity of its mainstream system is below 15KWh.
It mainly provides services such as mobile energy storage, emergency power backup, distributed wind power generation and self-use for private households and consumers. It is the field with the strongest C-end attributes in energy storage applications. Communication energy storage mainly refers to the backup power supply of communication base stations such as 4G/5G, which is used to prevent the risk of network paralysis and interruption caused by power failure and power shortage accidents to the communication system.
① The energy storage industry has entered a period of rapid growth
Since 2022, China's energy storage lithium battery demand has entered an explosive period under the resonance of policy and demand. Among them, household energy storage is stimulated by external factors such as the conflict between Russia and Ukraine and the inflation crisis. The annual shipment in 2022 is expected to reach 20GWh, an increase of more than 2.5 times compared with last year. Electric energy storage is expected to reach 90GWh in 2022, a year-on-year increase of more than 2 times.
Since 2022, China's energy storage support policies will be intensively introduced. It not only clarifies the independent market position of energy storage, formulates market rules for energy storage to participate in electricity market transactions, but also proposes a new energy storage 14th Five-Year Plan. At the same time, it is proposed to speed up the reform of the electricity market, and explore new business models such as landing energy storage virtual power plants and selling electricity through partition walls.
② Lithium battery raw materials short supply and energy storage battery prices are rising
Since 2022, the shortage of upstream raw materials represented by lithium carbonate has led to a continuous rise in the price of energy storage lithium batteries and systems, and the price increase pressure has continued throughout the year. Taking the 280Ah electric energy storage battery as an example, by Q3 of 2022, the average price of lithium energy storage batteries in China has reached 0.95 RMB/Wh.
With the rapid increase in the penetration rate of energy storage in the new power system, the stability and cost level of the energy storage lithium battery supply chain has become the biggest hidden danger restricting the rapid growth of the industry during the 14th Five-Year Plan period. The solution to this hidden danger also requires the cooperation of enterprises in the entire industry chain to break the ground and innovate in material systems, product design, and supply chain cooperation.
③ Energy storage business model is immature
In 2022, due to the small base of China's energy storage lithium battery industry, the profitability of demonstration projects still needs time to verify, the detailed rules for energy storage market access regulations have not been fully issued, and business models need to be explored and breakthroughs urgently. In this context, the immature business model makes energy storage assets more regarded as a cost item rather than a revenue creation item, which directly affects the value orientation of project investors to energy storage batteries.
Quite a number of owners and system integrators pay more attention to the purchase price of batteries instead of battery performance, safety and brand based on the consideration of cost reduction. If things go on like this, it will have a non-negligible negative impact on technological innovation and product upgrades in the energy storage battery industry.
④ Significant differences in the maturity of the global energy storage market
On the one hand, the degree of marketization of overseas electricity is high, the price difference between peak and valley is obvious, the business model of energy storage is mature, and the channel of energy storage cost is sound. Superimposed on the regulation of the overseas energy storage industry market order, the development of energy storage installed capacity in the overseas front-end and back-end markets is rapid, and the scale effect is obvious.
On the other hand, due to the immature business model in China, the initial investment cost has become the primary factor considered by the owners. The entry threshold for products such as batteries and systems is low, and there is a phenomenon that bad money drives out good money. In this context, there is a big gap between the gross profit of energy storage battery products in China and overseas.
⑤ The heat of the energy storage industry is increasing rapidly
Since 2022, many environmental protection companies, technology companies, food companies, education companies and even real estate companies have crossed into the energy storage field, and the industry's popularity has risen significantly. The main reasons are:
- In 2022, China and various provinces and regions will successively introduce policies to encourage the allocation of energy storage, and the new energy policy dividends related to energy storage will be obvious;
- Energy storage lithium batteries belong to the mainstream track of dual-carbon theme investment, and the layout of energy storage is conducive to improving the valuation of the company's capital market;
- Energy storage lithium batteries are in a period of rapid growth, with broad market demand and objective growth space.
2. Overseas market deployment of energy storage lithium batteries is accelerating
Since 2022, Chinese battery brands represented by CATL and BYD have accelerated the layout of overseas market channels and the development of projects, driving the rapid increase in the popularity of Chinese energy storage battery brands in major overseas markets such as North America, Europe, and Australia. The scale of individual orders for battery companies in China has jumped from tens of megawatts before 2021 to hundreds of megawatts or even gigawatts.
The overseas energy storage market has become the market that contributes the most to the revenue generation of Chinese energy storage battery companies. According to customs statistics, from January to August 2022, China's lithium-ion energy storage battery exports totaled US$29.926 billion, a year-on-year increase of 82.97%. In the foreseeable future, Chinese energy storage lithium battery companies will complete the transformation from a participant to a leader in the global power market.