Counterattack from "part-timer" to "protagonist" The hidden worries behind the trillion-dollar energy storage market
Release time：2024-09-03click：0
Once upon a time, energy storage was just a follower behind photovoltaics and wind power. Although it had a certain presence, it was always shrouded in the halo of the protagonists and did not receive much attention. Until this year, driven by China's "dual carbon" strategy, domestic new energy mandatory distribution and storage policy, the energy game triggered by the Russia-Ukraine war, and soaring global energy prices, energy storage has officially crossed the dormant period and has reached the limit of its role. And the scenes are constantly broadened, showing a "double bloom" situation in domestic and overseas markets. Nowadays, energy storage has kept pace with photovoltaics, wind power, new energy vehicles, lithium batteries and other tracks that also belong to the new energy industry chain. It has counterattacked from a "partner" to a "protagonist", and has the potential to take up the banner of new energy. .
The popularity of energy storage is inseparable from the continuous introduction of a series of favorable policies. In the past, the energy storage industry might only issue one policy every few years, but now dozens of policies are issued a year. According to statistics,in the first half of 2022, my country released a total of 52 national policies related to energy storage, including 23 supply-side related policies, 18 demand-side related policies, and 11 market mechanism-related policies. A total of 437 energy storage-related policies have been issued by various provinces and regions across the country, including 177 supply-side-related policies, 156 demand-side-related policies, 51 energy storage-related subsidy policies, and 53 power spot market-related policies. At present, 24 provinces and regions in China have promulgated new energy distribution and storage policies, requiring new energy power stations to be equipped with energy storage equipment in proportion to 10%-20% of the installed capacity through self-construction or leasing.
According to Everbright Securities’ forecast, China’s energy storage market will reach 0.45 trillion yuan in 2025 and 1.3 trillion yuan in 2030. It is worth mentioning that 2030 is only the year when my country’s “double carbon” goal is to achieve the “carbon peak” goal. Facing the longer-term 2060 “carbon neutral” goal, the energy storage industry still has huge room for development.
N segmented tracks in the energy storage market
Intensive introduction of favorable policies, coupled with track prospects Broad enough, energy storage has naturally become a new trend in the eyes of the industry and investors, and multiple subdivided tracks have been derived from this.
According to different storage media and technical principles, energy storage technology can be roughly divided into physical energy storage, electrochemical energy storage, thermal energy storage and hydrogen storage. Physical energy storage and Electrochemical energy storage is the absolute mainstream of the market. current,The main application forms of physical energy storage include pumped hydro energy storage, compressed air energy storage and flywheel energy storage. Among them, pumped hydro energy storage accounts for the largest proportion, reaching 86.5%. Its advantages are low cost, long life, High efficiency, large capacity and good stability. The main application forms of electrochemical energy storage include lithium-ion batteries, lead-acid batteries, sodium-sulfur batteries, secondary batteries, flow batteries and other types of batteries. Lithium-ion batteries account for the largest proportion, reaching 89.7%, its advantages are mature technology, high energy density, many cycles and long service life.
Although nearly 90% of the global and Chinese energy storage markets have been dominated by pumped hydro storage for a long time, electrochemical energy storage is the "number one" in the current energy storage track and is the capital The "new favorite" in the market. According to statistics, of the 66 energy storage projects that were connected to the grid and put into operation in China in the first half of 2022, 51 were electrochemical energy storage projects and 12 were pumped hydro energy storage projects.
There are several reasons for this: First, after the introduction of photovoltaic application volume and new energy distribution and storage policies, energy storage has experienced a blowout market demand. Pumped hydro storage is limited by geographical conditions. It is difficult to meet the continuously growing demand for energy storage; secondly, pumped hydro energy storage is mainly used for capacity energy storage and is still lacking in power energy storage, while electrochemical energy storage can take into account both, and has high controllability, high energy density, and conversion efficiency. The efficiency is fast; third, the investment in building a pumped storage power station often amounts to billions or even tens of billions, and the construction cycle is often 5-10 years, with large investment and long return period; fourth, electrochemical energy storage is already available in the market With a relatively complete supply chain, corresponding companies can directly enter the energy storage track, and can flexibly arrange the scale of projects according to demand.
It should be noted that although electrochemical energy storage is booming and has higher growth potential, pumped hydro storage is by no means a thing of the past. Peak shaving and valley filling will definitely continue in the next few years. Mainly pumped hydro storage. According to calculations by Yingda Securities,the cost per kilowatt hour of pumped hydro storage is about 0.23-0.34 yuan/kWh, and that of electrochemical energy storage is about 0.67 yuan/kWh. Pumped hydro storage is still the most cost-effective storage method. Can way. Industry insiders have said that the proportion of pumped hydro energy storage will reach 70%-80% by 2030. When the cost of lithium batteries for electrochemical energy storage continues to decrease and new technologies continue to mature, the scale of new energy storage will gradually exceed that of pumped hydro energy storage. The scale of energy storage.
Electrochemical energy storage street battle is about to break out
Currently, lithium battery storage is firmly in the top spot of electrochemical energy storage.The energy system consists of core parts such as batteries, energy storage converters, other equipment in the management system, and system integration. Among them, the cost of the battery pack accounts for about 60%, and the energy storage converter (PCS) accounts for about 20%. %, and other costs account for about 20%. When it comes to battery packs, readers who are familiar with the field of automotive power batteries will definitely think of two companies - CATL and BYD. Are they here again? Yes, to be precise, they have already arrived.
In 2011, when CATL was founded, it set two business goals, one is power batteries and the other is energy storage batteries. Over the past 11 years, CATL has continued to lay out the energy storage track through the establishment of joint ventures or equity investments, and its revenue on the energy storage side is now considerable. CATL's 2021 financial report shows that its total revenue was 130.356 billion yuan, a year-on-year increase of 159.06%. Among them, energy storage system business revenue was 13.624 billion yuan, a year-on-year increase of 601.01%, accounting for more than one-tenth of the total revenue.
Compared with the CATL era, BYD entered the energy storage industry earlier. In 2008, BYD Electric Power Research Institute was formally established and began to focus on the energy storage track. BYD's 2021 financial report shows that its energy storage business has grown significantly thanks to the momentum of new energy development. In the energy storage industry's secondary rechargeable batteries and photovoltaic business, revenue was approximately 16.471 billion yuan, a year-on-year increase of 36.27% >.
From a production perspective, energy storage battery production lines and automotive power battery production lines can basically be used interchangeably. The only difference is that energy storage batteries have higher requirements for cycle charge and discharge times. The number of battery cycles needs to reach about 6000-8000 times, and the number of cycles of automobile power batteries only needs to reach 1000-2000 times. With industry giants such as CATL and BYD leading the way, how can other battery companies let go of the opportunities in front of them? In recent years, companies such as Honeycomb Energy and Yiwei Lithium Energy have also switched part of their production capacity and have caught up.
At the same time, in addition to energy storage batteries, the market for energy storage converters, another high proportion of costs in electrochemical energy storage systems, is also rising. Similar to the energy storage battery market, companies with various professional backgrounds entered the market early. Because energy storage converters and photovoltaic inverters have the same origin,leading companies in inverters and power electronic devices such as Sungrow, Kehua Data, Soying Electric, Shangneng Electric, and Nan Ruijibao, Kelu Electronics, etc. have already taken the lead. There are also companies on the track that use experience in solar photovoltaics, microgrids, remote power systems and other related fields to occupy the energy storage market shareEnterprises such as Shenghong Electric, Xinfengguang, Shouhang New Energy, Huazi Technology, Zhiguang Energy Storage, Growatt, Goodwe etc. As companies with different backgrounds flock to the track, in the next few years, the energy storage converter market will also usher in fierce competition like the energy storage battery market.
In addition to the entry of traditional companies, the market has also welcomed many cross-border players, including industry giants and star companies - Midea acquired Hekang New Energy, which focuses on new energy business Energy and undertake its new energy storage-related business; Yongtai Energy and Haide Co., Ltd. jointly established Detai Energy Storage, whose business scope includes energy storage technology services, battery manufacturing, battery sales, etc.; Hangzhou Boiler Co., Ltd. changed its name to "Xizi Clean Energy" and cooperated with Shaoxing Green Energy signed its first energy storage project contract; Shaoneng Group and Dashun Company jointly established Ruichu New Energy, which is mainly engaged in the investment and development of wind power, photovoltaic, energy storage and other projects. Sany Group established Sany Lithium Energy in Changsha, Hunan. Its business includes battery manufacturing, sales, leasing, energy storage, etc. Xiaomi and Huawei announced that they will jointly invest in Weilan New Energy, focusing on the research and development of hybrid solid-liquid electrolyte lithium-ion batteries and all-solid-state batteries. And production... Recently, there have been numerous news reports like this. According to incomplete statistics, 22 listed companies have invested in cross-border energy storage since 2022.
Hidden worries under the trillion-dollar market
Faced with energy storage, a broad track with certain high growth , players from the traditional power industry, power battery industry, photovoltaic industry and other industries filed in, and everyone was just blindfolded and running wildly, showing a mixed trend. In fact, current energy storage technology has not substantially improved compared to two years ago. In terms of electrochemical energy storage, key inspection dimensions include charge and discharge speed, battery density, and safety. Nothing revolutionary has happened.
Whether you are an investor or an entrepreneur, it is not easy to get a share of the energy storage market. From the perspective of the industry chain structure, first of all, industry giants already exist, and external investors without any resources dare not enter the market casually, and they may not make money if they enter the market; secondly, it is obvious to all that the energy storage track is very popular, and in the industry chain Upstream and downstream companies are extending the industrial chain. For example, many electronic component companies and vehicle companies are now eyeing energy storage and battery projects. Thirdly, the original midstream manufacturers are taking the opportunity to expand production capacity and seize the market. For a time, the entire track was very involution. Therefore, while energy storage was booming, some investors lamented: "Energy storage is not profitable."
From a technical perspective, energy storage materials and core technologies still need to be broken through. Wu Feng, an academician of the Chinese Academy of Engineering, once expressed four views on the issues faced by domestic power battery and materials companies: First, material innovation, that is, how to innovate positive, negative electrode and dielectric materials; second, technological breakthrough, that is, how to break through key technical bottlenecks and how to achieve Low-carbon manufacturing; the third is the production capacity issue, that is, how to solve the problem of overcapacity of low-end production and the shortage of high-quality production capacity; the fourth is the cost issue, that is, how to adopt new technical strategies in the face of rising raw material prices. Currently, energy storage projects often fail to gain traction, and cost is one of the major pain points. Since 2022, energy storage companies have generally faced the dual pressures of rising costs and declining gross profit margins, and even leading companies are no exception. In the first half of 2022, CATL’s energy storage business revenue increased by 171.41% year-on-year, achieving revenue of 12.736 billion yuan.However, the gross profit margin plummeted from 36.6% in the same period last year to 6.43%, a year-on-year decline. 30 percentage points. In previous news reports, an employee of a listed company once revealed to the media: "The company's energy storage project has orders worth more than one billion yuan this year, but due to the cost of upstream resources, it is temporarily afraid to accept orders."
In fact, the energy storage track not only has raw material cost issues on the supply side, but also construction costs and subsequent operating costs on the power generation and power grid sides. It is understood that domestic energy storage product revenue is mainly divided into three aspects: first, selling energy storage products and providing operation and maintenance services, and companies mainly obtain orders through bidding; second, storing excess power and providing power for power stations and power grids Ancillary services such as frequency and peak regulation are provided to obtain corresponding income; the third is for the electricity consumption side. In areas where the price difference between peak and valley electricity prices is too high, energy storage products are used to store low-priced electricity and then sell it to enterprises when electricity prices peak. According to relevant industry insiders, the current bidding for energy storage on the power generation side and the grid side is actually not profitable. Even after some new energy power stations are equipped with energy storage, the energy storage products are in a state of zero dispatch and have not been truly integrated. National Electric Power System. At the same time, safety issues are also another systemic issue that cannot be ignored in the energy storage industry, involving multiple factors. In the past ten years, there have been at least 30 fire and explosion accidents in energy storage power stations around the world. Currently, my country's energy storage industry safety and standard system is still in the stage of gradual improvement. It can be seen that there are still many bottlenecks in the business model of the energy storage industry that need to be unclogged.
It is true that as the concept of green, low-carbon, and circular development accelerates, energy storage will surely complement each other with photovoltaic and wind power and become the main force in the adjustment of the global energy structure. But we should also see that energy storage is still in the policy-driven market stage, and the business model is not yet mature.Ripe. In many projects, replacing the full life cycle cost of electricity with initial investment cost is the core consideration of the owner's investment. We believe that as the industry structure continues to change, only those companies that are deeply integrated into market operations, develop more efficient and low-cost solutions, and explore more mature business models can become market winners and truly benefit the country and the people. And those companies that are opportunistic and try to take advantage of troubled waters will eventually be submerged in the torrent of time and ruthlessly eliminated by the market. In the end, they will only harm others and themselves.
Original title: Hidden worries under the trillion-dollar energy storage market
