How will electrochemical energy storage develop in China in 2022-analysis and prospect
With the increasing proportion of photovoltaic, wind power and other new energy in the energy structure, the demand for flexible resources in the power system increases. As an important choice, energy storage has ushered in an unprecedented period of development opportunities.
Among them, electrochemical energy storage has become the mainstream energy storage technology development direction in the future by virtue of various advantages.
From the perspective of industrial chain, electrochemical energy storage can be divided into:
● Upstream battery materials
● Midstream energy storage system and integration
● Energy storage application of downstream power system
This article will analyzes the market pattern and technical trend of each link of China’s electrochemical energy storage industry chain.
Development analysis of upstream link of electrochemical energy storage
Raw materials in the upstream of the electrochemical energy storage industry chain mainly include cathode materials, anode materials, electrolytes, separator, etc.
Cathode materials account for more than 40% of the cost of lithium-ion battery materials. In 2021, the shipment volume of China’s lithium ion battery cathode materials market was 1.13 million tons, an increase of 116% year on year, and the market size will reach 87.71 billion RMB.
It is estimated that the market size of China’s cathode materials will exceed 100 billion in 2022. There are a large number of positive material manufacturers in China with strong demand, but improving the energy density is still the main direction of the future development of lithium ion battery technology.
The energy density of lithium iron phosphate battery monomer is expected to increase by 20% through the improvement technologies such as adding lithium to the positive electrode, doping silicon and using solid liquid mixed electrolyte.
The cost of anode materials accounts for about 20% of the battery cost. In 2021, China’s export of anode electrode materials will exceed 150000 tons, more than double the previous year. It is estimated that in 2022, China’s anode materials will still maintain a substantial growth trend, and the shipment will exceed 1.2 million tons.
In the next 3 to 5 years, the global output of anode materials will also show a gradually rising trend, and more foreign enterprises will participate in the competition in China’s anode materials market.
The cost of electrolyte accounts for 10%~15% of the total cost of lithium ion battery. Lithium hexafluorophosphate is the lithium ion battery electrolyte with the highest market share, accounting for about 44% of the electrolyte cost.
The data shows that in 2021, the global shipment of lithium ion battery electrolyte will reach 612000 tons, of which the shipment of Chinese enterprises will reach 507000 tons, with a year-on-year growth of 88.5%, accounting for 82.8% of the global shipment of electrolyte.
The electrolyte produced by Chinese enterprises has become the most mature variety after years of development. Its development direction will focus on stability and security. In addition, solid electrolyte can completely solve the problem of high temperature decomposition, becoming an important development direction of electrolytic materials for lithium ion batteries in the future.
Separator costs about 8% of lithium ion batteries. In 2021, China’s lithium ion battery separator shipment was 7.8 billion square meters, with a year-on-year growth of more than 100%, and the global market share will exceed 70%.
Among them, affected by the increased requirements of the market for battery energy density, the superimposed capacity continued to release, and the wet separator firmly occupied the market leading position, with the proportion of shipments rising to 74%.
Compared with dry membrane, wet membrane has certain advantages in mechanical properties, air permeability and physical and chemical properties, but its thermal stability is relatively poor. The coating technology that can greatly improve the thermal stability of wet membrane is the future development trend.
Development analysis of middle reaches of electrochemical energy storage
The middle reaches of the electrochemical energy storage industry chain are mainly the integration and manufacturing of the energy storage system. The real maturity and growth of the energy storage market cannot be separated from the improvement of the efficiency of the energy storage system, the extension of the cycle life and the reduction of the system cost.
Energy storage battery
Energy storage battery is the core link of energy storage industry chain. As the mainstream electrochemical energy storage technology in the market, the current installed capacity of lithium ion battery energy storage accounts for about 90% of the total installed capacity of electrochemical energy storage.
In 2021, China’s energy storage lithium-ion battery market showed explosive growth. The output of energy storage lithium-ion batteries was 32GWh, with a year-on-year growth of 146%.
Globally, suppliers of energy storage lithium-ion battery market are mainly concentrated in China, Japan and South Korea. The data shows that in 2021, the global total shipment of energy storage lithium-ion batteries was 66.3 GWh, with a year-on-year growth of 132.4%.
The rapid growth of global lithium battery shipments is mainly driven by Chinese enterprises. Among them, CATL ranks first in the world with a market share of nearly 25%, followed by BYD, SDI and LGES. The total shipments of energy storage lithium-ion batteries of the four enterprises account for nearly 70% of the global market share.
However, in the short to medium term, lithium salt and other raw materials will still be in short supply. In order to establish their own competitive advantages, leading enterprises will increase the distribution of upstream raw materials and equipment links in the future.
At present, square lithium iron phosphate battery is the main type of energy storage lithium-ion battery in China. The battery cells and modules of energy storage lithium-ion battery are developing towards large battery cells and high integration.
Blade type lithium iron phosphate battery, CTP process and other technologies are expected to be promoted from power battery field to energy storage field.
Battery management system
Battery management system plays an important role in energy storage system. In recent years, the technology of China’s battery management system industry has developed rapidly.
In 2012, the market demand scale of China’s battery management system was only 100 million to 200 million RMB. In 2021, the market demand scale has reached 10.8 billion RMB. It is estimated that the market demand scale of China’s battery management system will exceed 12 billion RMB in 2022.
Energy management system
The energy management system can be divided into grid level energy management system and micro grid energy management system. The energy management system in the energy storage system mainly refers to the micro grid energy management system.
At this stage, the application proportion of China’s electrochemical energy storage management system is low, and the market scale in 2021 is only 600 million RMB. It is estimated that the average annual compound growth rate of China’s energy management system market size will exceed 100%.
The intelligent operation and fine management of the energy storage power station is an important direction for the future development of the energy management system.
Energy storage converter
The energy storage converter is a bidirectional current controllable conversion device connecting the energy storage battery system and the power grid. The scale of electrochemical energy storage of China’s energy storage converters has been growing in recent years, and the market size of China’s energy storage converters will be 3.67 billion RMB in 2021.
Most energy storage converter enterprises come from photovoltaic inverter manufacturers, and the industry competition pattern is similar. In the past two years, affected by the COVID-19 epidemic, the delivery period of global chips has been extended, and the market share of Chinese manufacturers has gradually increased.
In 2021, the top three manufacturers in the top 10 energy storage PCS manufacturers in China in terms of shipments are Sing, KELONG and Soaring Electric, and the top three manufacturers of Chinese manufacturers in the global market in terms of shipments are SUNGROW, KELONG and BYD.
In general, China’s energy storage converter market is at an early stage, with a small number of existing competitors, but it will face long-term competitive pressure from enterprises in various segments of the energy storage industry.
Energy storage system integration
The energy storage system integration is to combine the energy storage battery, battery management system, energy management system, energy storage converter and other units to achieve the optimal overall performance of the energy storage power station.
In 2021, the new installed capacity of global new energy storage increased by 10.2Gw, with a year-on-year growth of 117%. The new installed capacity of Chinese new energy storage increased by 2.4 GW, with a year-on-year growth of 54%, both of which have set a historical record.
Energy storage is entering a new era of large-scale development, driving the rapid development of energy storage system integration market.
Development analysis of downstream link of electrochemical energy storage
The downstream application scenarios of the electrochemical energy storage industry chain mainly include energy storage at the generation side, grid side and user side. With the rapid development of new energy, the demand scale of energy storage power plants is growing, and the application scenarios of electrochemical energy storage will be more and more abundant.
Power generation side
On the power generation side, the main application scenarios of energy storage include renewable energy grid connection, power peak shaving, auxiliary dynamic operation, system frequency modulation, etc.
According to statistics, in the first half of 2022, 51 electrochemical energy storage projects were put into operation in China, with an additional installed capacity of 392000 kilowatts. It is estimated that the installed capacity of electrochemical energy storage on the power generation side will account for 72% in 2022.
On the grid side, energy storage can improve the security of power system. In the first half of 2022, China added 4 grid connected electrochemical energy storage projects, with an additional installed capacity of 80.3 MW/173.6 MWh.
User side energy storage was once the most potential energy storage application scenario in China. In the first half of 2022, China added 24 grid connected and user side electrochemical energy storage projects, 34.7 MW/79.8 MWh of installed capacity, 6 distributed and micro grid electrochemical energy storage projects, and 9 MW/15.5 MWh of installed capacity.
Globally, Germany, the United States, Japan and Australia accounted for 74.8% of household energy storage in 2020. Since the second half of 2021, the sharp rise in electricity prices in many countries and the hidden worries about energy security have continued to heat up household energy storage.
However, affected by the rise in the prices of upstream lithium carbonate and other raw materials, home power storage companies have generally increased their income but not their profits.
Prospect of electrochemical energy storage industry in China
● The production level of core components in China’s industrial chain is constantly improving
The core technical barriers of battery management system and energy storage converter industry are relatively high. In the future, it will be the first to welcome the explosion of Chinese demand in the core components such as battery management system and energy storage converter.
● The iteration of mainstream technology route
In order to meet the needs of mobile energy storage and large and medium-sized energy storage applications, electrochemical energy storage technology is gradually expanding from lithium ion batteries to more technical routes, and is expected to achieve market-oriented application after 2025.
● Safety management standards and specifications should be further improved
Safety is the bottom line of the development of the electrochemical energy storage industry. In recent years, a number of safety accidents of electrochemical energy storage power plants around the world have sounded the alarm for the development of the industry, and the safety management standards and specifications need to be further improved.
● Continuously improve the market mechanism to break through the profit bottleneck
The enrichment and improvement of the market mechanism will accelerate the release of the potential of electrochemical energy storage at the source, grid and load ends, and make contributions to the consumption of new energy
● Digital technology helps the development of electrochemical energy storage industry
The hardware of the energy storage battery management system comes from the electric vehicle system, which has low communication efficiency and slow data refresh. The development and application of digital technology can support millions of data acquisition, improve the speed of control and decision-making from seconds to milliseconds, and realize the whole process control of operating parameters and various performances.