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If the booming energy storage industry is comparable to the crown on the new energy track, then industrial and commercial energy storage is the jewel in the crown. As far as China is concerned, the growth potential and market opportunities of industrial and commercial energy storage are far more attractive than large storage and home energy storage.
1. Industry and commerce are very different with energy storage
With the further widening of peak-to-valley price differences across China, the cost of lifepo4 battery has dropped, and the IRR (internal rate of return) of industrial and commercial energy storage has steadily increased, and the economy has become more and more obvious. Industrial and commercial energy storage has become the fastest growing branch of the energy storage track.
On the surface, the energy storage system is composed of batteries, PCS converters, BMS, EMS and other electrical circuits, protection, monitoring systems, and fire protection. But in fact, there are great differences between source-grid side energy storage and industrial and commercial energy storage in terms of system focus, business logic, and revenue model.
Industrial and commercial energy storage is more integrated, and will adopt the form of an integrated energy storage cabinet instead of a large storage container. The capacity of industrial and commercial energy storage is relatively small, because it is more to meet the needs of companies users for self-use of photovoltaic, reduce electricity costs, and basically does not participate in grid dispatching, so the requirements for system control are far lower than those for energy storage on the source-grid side.
2. System control requirements for industrial and commercial energy storage
For example, in terms of batteries, industrial and commercial energy storage does not require response speed, but pays more attention to cost and the number of charge and discharge cycles, so it is usually an energy-type battery rather than a power-type power battery. The latter needs to participate in power auxiliary services such as frequency regulation and emergency backup, and has higher requirements for response time. Energy-type batteries are more durable and do not require a high rate, generally around 2C.
In terms of battery management finesse, industrial and commercial energy storage battery systems do not require an overly complex, hierarchical management strategy, and even some PCSs have the function of a BMS.
Looking at PCS again, the function of industrial and commercial energy storage PCS is much simpler, and it is easier to integrate with the battery system. It is suitable for series-parallel connection requirements of lithium batteries, LEP, etc., one-way charging and discharging, and has stronger adaptability and coupling to distributed photovoltaic inverters.
The large-scale energy storage PCS also has the ability of primary frequency regulation and fast power response, which is used for grid support functions. In terms of size, industrial and commercial energy storage PCS is smaller.
The same is true for EMS in China top 10 energy storage EMS companies. The energy management system for industrial and commercial energy storage belongs to the basic version, focusing on local energy management of LAN. The large storage needs to have a grid dispatching interface, support a variety of communication protocols, and meet the complementary energy management and monitoring of sources, networks, loads, and storage.
From the perspective of income sources, new energy distribution and storage rely more on smooth grid connection, reducing wind and solar curtailment, and rarely participate in auxiliary services.
The income methods of independent energy storage power stations (including shared energy storage) are more diverse, including capacity leasing, power auxiliary services, peak-valley difference arbitrage, capacity compensation, etc. In comparison, the value of industrial and commercial energy storage is more multi-dimensional.
From the perspective of application scenarios and income models, industrial and commercial energy storage can be configured with energy storage alone, or integrated with solar energy storage, or even coupled with microgrids, and there are many sources of income.
3. Good stimulus, industrial and commercial energy storage explosion
In recent years, the positive stimulus of industrial and commercial energy storage is obviously stronger than that of large storage, mainly due to the advancement of the time-of-use electricity price policy and the continued widening of the peak-to-valley price difference.
In the first half of 2023, many provinces in China will intensively adjust industrial and commercial time-of-use electricity prices. At the same time, summer is about to begin, and once again facing the soaring electricity costs brought by last year high-temperature power cuts and profit-loss electricity price sharing, the demand for installed capacity of distributed photovoltaic and industrial and commercial energy storage has further increased.
Moreover, this round of time-of-use electricity price adjustments focuses on the adjustment of peak hours and peak electricity prices, which further optimizes the division of peak hours. For example, the morning peak hours in Sichuan have been increased to 2 hours, allowing industrial and commercial energy storage to achieve double charging and discharging, improving the economics of energy storage investment.
The second is the increase in peak electricity prices. For example, the peak electricity prices in Jiangsu, Sichuan, and Beijing are set to be 20% higher than the peak electricity prices, which further widens the peak-to-valley price difference and increases energy storage revenue accordingly.
In addition, the combination of distributed photovoltaic and energy storage in industry and commerce is also the sum of the right time and place. In the whole day, the solar radiation intensity is high at noon, and the output of photovoltaic power generation is large, but the electricity price is lower at this time. The more photovoltaic installed capacity is in the area, the lower the electricity price at noon, especially in the power spot market.
At this time, it is necessary to configure a certain capacity of energy storage, store a large amount of photovoltaic power generation in the noon, and move the power to the peak or peak hours in the afternoon. It not only absorbs photovoltaic power generation, but also earns higher price difference income, or reduces electricity cost during peak periods.
In the future, with the advancement of the time-of-use electricity price policy in various provinces and cities, more and more provinces and regions where industrial and commercial energy storage will enter into positive profits will surely stimulate the enthusiasm of more energy storage projects in the market.
4. Industrial and commercial energy storage with rich application scenarios
Compared with large storage, industrial and commercial application scenarios are more abundant, and can be widely used in industrial plants, commercial buildings, parks, data centers, base stations, electric vehicle charging stations, mining areas/oil fields and other scenarios. Among them, EV charging stations, which account for a higher and higher proportion of social electricity consumption, have an increasing rigid demand for energy storage configuration.
It is estimated that by 2030, the proportion of electric vehicle public charging in social electricity consumption will increase by 24 times, from 0.16% in 2022 to 4%. In 2025, the scale of energy storage for charging stations in China will reach 23GW, with an investment scale of nearly 100 billion RMB. In 2030, this figure will increase to 243GW, with an investment scale of more than 870 billion RMB.
The CAGR from 2023 to 2030 will reach 64%. In the future, solar storage charging will become the standard configuration of charging stations, and the capacity of the entire industrial and commercial energy storage will be a market worth trillions.
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