At the beginning of 2023, “new energy” appeared in many electronics industry trend forecast reports, showing its extremely high prosperity. Among them, the industry is particularly optimistic about the three major subdivisions of wind power, energy storage and new energy vehicles.
But in fact, these tracks are not new technology, or even new terms. How to seize new opportunities from old concepts? This article will focus on “energy storage” in the three major segments, and analyze the development highlights and trends of China’s energy storage market through in-depth interviews with representatives of energy storage-related enterprises.
New track, old track?
By definition, energy storage refers to the process of storing energy through interpretation or equipment and releasing it when needed. Its essence is to solve the problem of imbalance between power supply and demand.
Figuratively speaking, energy storage is to store “energy”, just like a charging treasure, store electric energy, and then use electricity when needed, which can be stored during the day, electricity at night, or stored on sunny days, and used in rainy days, very flexible in regulating resources to ensure the consumption of new energy.
The “energy storage” in people’s previous impressions refers more to pumped storage and lead batteries. For example, pumped energy storage is to use electric energy at the trough of the power load to pump water to the upper reservoir, and then release water to the lower reservoir to generate electricity during the peak period of the power load. It can convert excess power during low grid load into high-value energy during peak grid hours. The lead storage battery, like the solar street lights, solar garden lights, and centralized solar power stations on the market, they all have functional units for storing energy, but lead batteries are used to store energy at that time.
But in fact, according to the different forms of energy storage, energy storage can be divided into electric energy storage, hydrogen energy storage and thermal energy storage. Electric energy storage can be divided into electrochemical energy storage and mechanical energy storage, of which electrochemical energy storage is mainly familiar battery energy storage, including lithium batteries, lead storage batteries, sodium-sulfur batteries, etc.; Mechanical energy energy storage mainly includes pumped storage, compressed air energy storage, flywheel energy storage, etc.
In other words, in power energy storage, pumped storage is a more traditional energy storage method, while electrochemical energy storage and other new energy storage methods. From the perspective of China’s energy storage market structure, the cumulative installed capacity of pumped energy storage accounts for more than 86%, while the cumulative installed capacity of electrochemical energy storage accounts for only about 12%.
The current hot energy storage market is mainly lithium battery energy storage. Among all electrochemical energy storage installed types, lithium batteries account for 92%, which is the mainstream mode of electrochemical energy storage.
Why has lithium battery energy storage only risen in recent years? On the one hand, with the development of the industry, lithium batteries have gradually highlighted their advantages and become the protagonists of energy storage functional units. On the other hand, the global energy shortage in recent years, coupled with China’s emphasis on green energy and policy tendency, has accelerated the gorgeous transformation of energy storage from a functional unit to a market direction.
It is worth mentioning that the IIC Shanghai 2023 International Integrated Circuit Exhibition and Symposium will be held in Shanghai on March 29-30, which will focus on the cutting-edge technology of international “carbon neutrality” industry development, and at the “2023 International” Carbon Neutral” Electronics Industry Development Summit Forum, ST and other industry leaders will share industry insights and share the overall situation, and welcome industry players to actively register to participate.
China’s lithium battery energy storage market is in full swing
In the past three years, the development of China’s lithium battery energy storage market has entered the “highway”.
2021 can be called a year of frequent policies in the energy storage industry. For the realization of the “dual carbon” goal, the importance of energy storage is self-evident. Therefore, since 2021, energy storage has become the focus of national policies.
For example, on July 23, 2021, the National Development and Reform Commission and the National Energy Administration officially jointly issued the “Guiding Opinions on Accelerating the Development of New Energy Storage”, which put forward the installation scale target for the first time at the national level: it is expected that by 2025, the installed scale of new energy storage will reach more than 30 million kilowatts, which is close to 10 times the installed scale of new energy storage at that time, bringing great confidence to the development prospects and market scale of the energy storage industry.
In the past 2022, despite the repeated new crown epidemic and frequent supply chain crises, the energy storage market still bucked the trend and broke out with a strong growth momentum. According to the data, global energy storage battery shipments will reach about 125GWh in 2022, a significant increase of more than 160% from 48GWh in the previous year. Therefore, 2022 is called the “true first year” of electrochemical energy storage.
From the end of 2022 to the beginning of 2023, a number of large energy storage manufacturers have won large orders, laying the foundation for the continuous outbreak of the energy storage industry in 2023.
For example, CATL has reached a long-term supply agreement of nearly 7.5GWh with British new energy investor Gresham House Energy Storage Fund. Crestec and its holding subsidiary, CATL, Crestec Technology Co., Ltd., have received a product purchase order signed with customer A, the contract subject is energy storage products, and the order amount is 210 million US dollars. China Reserve Technology Wuhan lithium battery intelligent energy storage PACK production line and energy storage research institute project signed a contract to settle in Jiangxia District, Wuhan, Hubei Province, with a total investment of 1 billion yuan, to build a 6GWh automated PACK production line, which is expected to be put into operation in February 2023.
As a result, representatives of the three companies interviewed by this magazine all said that 2023 will be a big year for China’s energy storage development.
Research data shows that in 2022, affected by factors such as the shortage of global supply chains, rising lithium mine prices, and the raging global epidemic, the installed capacity of new global power energy storage projects will slow down slightly year-on-year, and is expected to increase by 95.8%. In 2023, the world will enter the post-epidemic era, the European energy crisis will continue, and local projects will continue to make efforts. It is predicted that the installed capacity of new power storage projects in the world is expected to exceed 200% year-on-year, of which 24% of new power storage projects will be generated in China.
Four development highlights of China’s lithium battery energy storage market
Companies expect that in five years’ time, China, the United States and Europe will be the largest incremental markets, roughly sharing about eighty percent of the global market share. For this huge market prospect, is China’s lithium battery energy storage industry chain ready? The author has observed and summarized the following four development highlights.
Highlight 1: The local industrial chain is relatively perfect
The industrial chain of new energy storage includes upstream raw materials and equipment, midstream energy storage systems and integration, and downstream power system energy storage applications.
Among them, upstream raw materials mainly include positive electrode materials, negative electrode materials, electrolytes, diaphragms and structural parts; The upstream integrated system equipment mainly includes coaters, mixers, etc. Midstream energy storage systems and integration generally include four components: battery pack, battery management system (BMS), energy management system (EMS) and energy storage converter (PCS). Downstream application scenarios mainly include power system energy storage on the power generation side, grid side and user side.
Among them, in the application of energy storage, the most important semiconductor devices are: digital control platforms and high-power switching devices.
The digital control platform is the core of energy storage, and the digital control platform in the energy storage system needs to calculate the signal collected by the power loop in real time, and the workload of the data is very large, and it needs to achieve a response speed comparable to the analog circuit, which puts forward very high requirements for the digital control platform. Power switching devices, such as MOSFETs used in bidirectional full-bridge DC-DC and IGBTs used in DC-AC, are major factors that determine the quality and performance of energy storage systems.
At present, the representative enterprises of upstream equipment providers in the energy storage industry chain are, BYD, Pineng Technology, Guoxuan Hi-Tech, etc.; The representative enterprises of the battery management system include Nebulas Co., Ltd., Joyson Electronics, Shenzhen Collet, CATL, Guoxin Power, etc.; The representative enterprises of energy management system include Guodian Narui, Huazi Technology, etc.; Representative enterprises of energy storage converters include Sungrow, Shenghong Co., Ltd., Kehua Hengsheng, Huawei and so on.
Representative enterprises of midstream energy storage system integrators include Sungrow, Kelu Electronics, Haibo Strong, Nandu Power, Shenghong Co., Ltd., Guoxuan Hi-Tech, etc.; The representative enterprises of energy storage system installers include Yongfu Co., Ltd., TBEA, PowerChina, China Energy Construction and so on.
Highlight 2: All technologies are going hand in hand
After ten years of technology research and development, demonstration application and commercialization attempts, China’s energy storage industry is at the forefront of the world in terms of technology application. This has also formed a more prominent industry feature – all technologies are going hand in hand, but there is a lack of a technology with all-round absolute advantages.
The technologies here include both pumped storage, compressed air energy storage, flywheel energy storage, super capacitors and other physical energy storage technologies, as well as electrochemical energy storage technologies such as lithium batteries, lead-carbon batteries, flow batteries, sodium-sulfur batteries, etc., which have their own advantages and disadvantages, and the scope of application is also relatively different.
In terms of different advantages and disadvantages, large-scale, long-life, safe and fast response technologies are more suitable for application on the power generation side and grid side, while technologies with low cost, good recyclability, safety and fast response are more suitable for application on the user side.
Whether it is on the user side including consumer electronics, or the scale application of power and power grid, lithium batteries are relatively ahead, and their technological progress is more difficult. In the secondary market, it has been able to piece together a complete lithium battery energy storage industry chain. In the primary market, because the first mover has completely gained a foothold, it is difficult to achieve a breakthrough in the lithium battery industry chain. However, at present, the high cost and poor safety of lithium batteries have been hindering the application of this technology route in large-scale energy storage.
Looking forward to the next three to five years, lithium battery technology can rapidly improve the market space through product innovation and process innovation, continuously reduce the cost of raw material production, product manufacturing costs, and improve product performance, including safety and service life.
Highlight 3: Vigorous expansion plan
In the next three to five years, the overall scale of the lithium battery energy storage industry will maintain an average annual compound growth rate of more than 50%. As a result, energy storage companies have pressed the fast-forward button to expand production. According to incomplete statistics, in 2022, China’s local energy storage battery-related expansion projects have reached 26, with an investment of more than 300 billion yuan and a total production capacity of 820GWh.
At the same time, large-scale cross-border investment will be staged in 2022, including Yongtai Energy, Midea Group, Sany Heavy Industry and other enterprises, through cooperation, acquisition and independent construction, etc., to enter the energy storage industry.
However, in the next few years, there will still be a shortage of energy storage battery production capacity. According to a survey, the production capacity released by some energy storage lithium battery suppliers in 2023 has been locked by downstream customers in the second quarter of 2022, and many small and medium-sized enterprise owners and system integrators will face different degrees of battery supply risks in 2023. Therefore, it is inferred that the probability of expanding production is still a necessary business strategy for power energy storage battery companies in the next 2 to 3 years.
Highlight 4: Actively going overseas and conquering the global market
From a global perspective, the US power system is more complex, and the installed capacity of energy storage is high, of which the pre-balance sheet market (large storage) is the main source of new installations. It is expected that the demand for large reserves in front of the US balance sheet is expected to increase to 70GWh in 2023, a year-on-year increase of more than 50%.
The energy gap has led to a sharp rise in natural gas prices in Europe, and it is expected that the price of electricity on the European residential side will remain high in 2023, coupled with the continuation of household storage subsidies and the decline of on-grid electricity prices, which will continue to stimulate European household storage demand. The increase in the number of European energy storage projects on the front side of the table is expected to ensure the scale of large storage capacity in 2023.
Other developing countries are driving demand for energy storage installations due to weak grid infrastructure and increased wind and solar installations. Since 2021, Brazil, India, Chile and other countries have driven the installation of pre- and post-meter energy storage through policy means.
For the above overseas markets, some Chinese energy storage integrators have successfully “gone to sea”, such as CATL, Sungrow, CLOU Electronics, Shuangyili Energy Storage, Nandu Power Supply, etc. It is believed that in 2023, more domestic enterprises will accelerate their overseas expansion and enter the era of 100-megabit orders.
Breaking through the restrictions, China’s energy storage market has unlimited prospects
At present, the technology of energy storage is still developing and improving, and there are technical problems that need to be solved urgently in safety, cost, raw materials, and energy storage efficiency.
- Energy storage safety
In the safety of energy storage, technical breakthroughs are the primary solution. A sufficiently safe solution can land a sufficiently safe energy storage, and most of the problems of energy storage security need to be solved by technical means.
For example, battery safety is the key to new energy storage safety, relying on traditional big data and artificial intelligence to achieve remote monitoring, can only flow on the surface of the battery, it is difficult to penetrate the battery to make predictive judgment of safety. Only the realization of technological innovation can understand the life state of the battery in real time, in order to effectively prevent battery safety accidents.
It is understood that after years of dedicated research and development, some companies have broken the neck technology of battery safety, let the electrochemical algorithm penetrate into the battery mechanism, and realize the “blood-level” pre-diagnosis of the battery, leading the technological development of the industry. - Cost and market-oriented trading mechanism
For energy storage systems, the cost problem is a challenge that is difficult to bypass for electrochemical energy storage, and the large-scale commercial use of electrochemical energy storage will involve the planning of electricity costs. It is reported that among the many current electrochemical energy storage modes, lithium batteries are still the most cost-effective choice, but their battery costs are significantly higher than the cost of new energy power generation. However, the cost of battery storage has fallen significantly worldwide, and the price of stand-alone lithium-ion batteries is expected to fall from $1,100/kWh in 2011 to $58/kWh by 2030.
The market-oriented trading mechanism is another focus on whether energy storage can be promoted on a large scale. Benefiting from the market-oriented reform of coal-fired power generation on-grid tariffs, industrial and commercial users fully implement market-oriented time-of-use electricity prices and expand the peak-to-valley price difference, which will further drive the development of energy storage, and the “investment product” attribute of energy storage will become more prominent, and the industrial and commercial storage space will be fully opened. In the future, with the maturity of the market-oriented trading mechanism, more energy storage units will reflect greater value in the time storage of energy.
How to break the game? Future Electronics believes that the establishment and development of any emerging industry must go through a process of continuous improvement of technology, continuous decline in cost and continuous expansion of industrial scale. As an emerging industry, energy storage is in the early stage of market application, and it is in a scorching period when technology, application and market mechanism need to be further innovated and breakthroughs. With its rich product line and technical strength, Future Electronics promotes the standardization of energy storage technology, helping energy storage companies to improve technology, reduce costs, ensure product quality, and practice “internal strength”.
“The dual carbon goal is not only the exploration of technology, the innovation of the platform, but also the innovation of business, the one-stop solution and service of energy and carbon is the business innovation to achieve the dual carbon goal, in which based on the core equipment and ecological partners and core technologies and capabilities, we have created a business model of energy flow and carbon flow separation and governance, and provided one-stop solutions to serve a variety of possible energy-using customers, such as governments, enterprises, families, etc. Finally, we realized the systematic products based on clean energy for our one-stop solution for zero-carbon management and smart core management, and made our business innovation exploration for the realization of the dual carbon goal. Weng Jie said. - Digitalization and platformization
Weng Jie believes that the digitalization and platformization of the energy Internet is the technical foundation for achieving the dual carbon goal.
In terms of digitalization, Sungrow has realized the intelligent collection of photovoltaic inverters, energy storage inverters, modules, combiner boxes and environmental data through intelligent digital acquisition equipment, and also realized the scheme based on public data management to realize structured data management, data quality assurance, and data density change management, thus laying the conditions for distributed data storage.
In terms of data mining and data visualization, we actively explore equipment fault location, early warning, and device life prediction, and also make photovoltaic, wind power, and load power predictions. Under the digital foundation, it is also one of the technical foundations to achieve the goal of dual carbon by doing a good job in intelligent equipment to station-level operation and maintenance management management and group management platform to advanced management platform.
Chen Shipeng agreed: “In the new energy world, the smart Internet of Things will play the role of the new power grid, making the new energy system more flexible and releasing synergistic value. In the field of carbon management, Envision relies on EnOS to build the Ark Energy Carbon Management System, which provides carbon footprint monitoring and automatically generates carbon emission reports based on artificial intelligence + Internet of Things + big data + blockchain and other technologies. At the same time, it simulates and optimizes emission reduction paths, directly connects to external green equity markets, purchases carbon credits such as green power, green policy, carbon sink, CCR, etc., and realizes carbon offsetting and compliance at the lowest cost, realizing a one-stop closed loop of carbon neutrality. ”
Looking at the present, the era of the energy revolution has begun. In the next few decades, China’s energy storage industry needs to strive to fulfill this great historical mission and make full use of big data, cloud computing, Internet of Things, edge computing, and AI technologies to help achieve the dual carbon goal faster. It is believed that China’s lithium battery energy storage industry will develop in a more efficient, friendly and intelligent direction!
