The prospect of the new energy storage industry

 

 

1. Development status of the new industry

New technology to store energy shows a diversified development trend, and the industry has entered the limelight. At present, many cities are competing for a new type.

 

● Installed capacity

The development of China's new storage systems industry has accelerated significantly. By the end of 2022, 8.7 GW of new storage systems projects had been put into operation, with an average time of energy store about 2.1 hours.

With the increasing demand for regulatory capacity in the power system and the increasing scale of new energy development and consumption, the scale of new storage systems construction is expected to increase rapidly. It is expected that by 2025, the installed capacity of will increase to 30 GW.

● Market structure

At present, the new storage system market presents a pattern of lifepo4 battery technology routes and diversified development of new technologies. Data show that by the end of 2022, lithium-ion battery energy storage will account for 94.5%, and other technical routes will account for 0.2%. In addition, a variety of energy storage technologies, such as sodium-ion, have entered the engineering demonstration phase.

2. Market segments

● Pressurized air

At present, China's compressed air energy storage is accelerating into the commercial application stage. According to incomplete statistics, about 19 demonstration projects for compressed air energy storage will be signed in 2022, and the disclosed energy storage scale is about 6.48 GW.

● Flow batteries

Recently, the industrialization process of vanadium flow batteries in China has accelerated significantly compared with before, and the prospects for industrial development are good. By 2022, the new installed capacity will reach 0.6 GW.

In the future, under the influence of various factors such as the continuous investment of subsidies, the maturity of the industrial chain and the cost reduction of scale effects, all-vanadium redox flow batteries will transition from policy-oriented to market-oriented with excellent characteristics, and their penetration rate will gradually increase.

Market segments

 

It is expected that the new scale of vanadium batteries will reach more than 2.3 GW in 2025. Lead-acid batteries The market size of lead-acid batteries shows a slight and stable growth trend, with an output of about 236.55 million in 2022. 

● Lithium-ion batteries

In 2022, the top 10 lithium battery companies in the world adhere to supply-side structural reform and accelerate technological innovation and transformation and upgrading. Continuously improve the supply capacity of advanced products, and maintain a rapid growth trend overall.

First, production continues to grow rapidly, and the industrial scale continues to expand. In 2022, China's lithium-ion battery production reached 750 GWh, an increase of more than 130% year-on-year, and production is expected to reach 997 GWh in 2023.

3. Industry development prospects

The target installed capacity, market position and business model have been clarified, and energy storage will accelerate with renewable energy. Overlaying the application of new derived ecosystems such as distributed power stations, charging piles, and microgrids energy storage will usher in new application demand. The industry has broad prospects.

● Demand release drives the development of the industry.

With the increasing proportion of new energy sources such as wind and solar energy in China. The technologies and industries closely related to the development of new energy have also attracted a lot of attention. The new storage system is mainly electrochemical energy storage represented by lithium-ion batteries.

The electrochemical energy storage system mainly includes battery pack, bidirectional converter (PCS), energy management system (EMS), battery management system (BMS) and other electrical equipment.

The development potential of electrochemical energy storage is huge, and leaders in various fields have laid out different links to the energy storage track in advance, and the release of demand promotes the development of the industry.

Industry development prospects

 

● Technological progress drives the development of industry.

As the only way to apply photovoltaic and wind power on a large scale, energy storage is a key track for global energy innovation, and the road to industrial development is clear.

At present, China's new market to store energy is still in the early stages of development, and the penetration rate is low. The market still has a lot of potential for development. With the continuous advancement of technology, the new storage system industry will further develop.

According to the different forms of energy storage, generalized storage technology is mainly divided into three categories: thermal, electric and hydrogen (ammonia) energy storage. Among them, the electric one includes electrochemical , mechanical and electromagnetic energy storage.

At present, pumped storage is still the main method to store energy projects in the power system. However, a variety of new storage system methods represented by electrochemical to stpre energy are developing rapidly.

4. Application scenarios and functions

Energy storage can play an important role on the power generation side, the grid side, and the household side. The application scenarios of it can be divided into these three parts, too and the business model of each link is also different.

On the power generation side, it mainly plays the role of matching power production and consumption, and reducing the pressure on the power grid. On the grid side, stored energy is mainly used to reduce or delay investment in grid equipment, alleviate grid congestion, and provide auxiliary services such as peak shaving and frequency regulation for the power system. On the home energy storage, it helps users achieve modes such as peak shaving, valley filling, or spontaneous photovoltaic self-consumption to reduce electricity costs.

The future of independent power stations

 

● Operating model

Difficult bottlenecks in the business model need to be addressed. In terms of operation mode, power grid enterprises lack power investment, and existing non-independent projects face the problem of settlement. The two major power grid companies have successively proposed strict control of grid investment, which to a certain extent inhibits the power to build new storage system.

The projects that have the conditions for direct grid adjustment or choose to settle with the grid generally adopt the contract energy management model. Under the contract energy management model, such projects usually do not have the status of independent market entities, can only participate indirectly in the electricity market through grid enterprises, and may face delays or arrears of revenue from the owner.

● Revenue model

In terms of revenue pricing models, the barrier is that costs cannot be passed on to the user side. There is a need to develop a capacity cost recovery mechanism and a spot market for electricity. Revenue from grid-side energy storage comes mainly from the compensation of auxiliary services such as peak shaving and frequency regulation.

However, the cost of auxiliary services on the grid side is currently difficult to transmit to the user side, which may limit the development of the auxiliary service market to a certain extent. There is a need to develop a capacity cost recovery mechanism and a spot market for electricity to improve the cost allocation mechanism and expand revenue sources.

 

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