Energy storage industry-the long-term development is highly certain
Building a new power system with new energy as the main body has become a global consensus, and energy storage will be involved as a core link. To sum up, under the guidance of the carbon neutral goal, the global policy is inclined to energy storage industry, and the long-term development of the energy storage industry is highly certain.
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At present, the energy storage industry is still in the early stage of development, and will become the segment industry with the highest growth rate in the new energy industry chain in the next 3-5 years. This article will analyze the current energy storage industry in the world.
Germany’s household energy storage industry is leading the world
In 2021, the installed capacity of electrochemical energy storage in Germany is 1.36 GWh, of which the installed capacity of household energy storage is 1.27 GWh, accounting for 93%, leading the world. The main reasons for the development of household energy storage industry in Germany are as follows:
● The high household electricity price in Germany has stimulated the demand for household photovoltaic energy, thus stimulating the household energy storage market;
● Germany has a perfect spot trading system in the electricity market, with large peak valley price difference, which makes energy storage industry more economical;
● Germany implements a leading industry subsidy policy for household energy storage industry.
Germany issued a policy to provide a subsidy of 30% of the investment amount for household energy storage equipment. After the policy expired in 2016, Germany began to implement a new light storage subsidy policy. The new policy initially supported 19% of the investment amount.
After several reductions, it finally fell to 10% by 2018. At this time, the cost of energy storage has fallen to a low level, and residents’ willingness to install energy storage is less affected by the subsidy. Therefore, the decline of subsidies has not caused the stagnation of the development of German household energy storage market.
The demand for German household energy storage surged under the conflict between Russia and Ukraine. After the outbreak of the Russia Ukraine war, the price of imported natural gas in Europe soared, which led to an increase in electricity prices and an upward shift in residential electricity costs.
In this context, by installing a home optical storage system, power can be used spontaneously and become an important alternative to power consumption. According to the data, the national storage capacity of Germany in 2022Q1 is about 0.63GWh/yoy+150%.
The demand of European energy storage market starts to rise
In 2020, the installed capacity of electrochemical energy storage in Europe will increase by 0.8GW, a year-on-year decrease of 11%. The new installed capacity of household energy storage is 1.07GWh, a year-on-year increase of 43.5%. Assuming that the average storage time is 2 hours, it accounts for 67% of the total energy storage.
Europe has become the world’s largest household energy storage market, mainly due to the high penetration rate of household energy storage industry in Germany. In addition to Germany, other European countries have also started to make efforts on the policy side.
For example, the national grid power system operator of the United Kingdom launched the weekly storage capacity auction test, and launched its dynamic containment response service in October 2020; Sweden will provide tax relief to individuals who install household energy storage systems from 2021;
Italy will launch a new ecological incentive policy in June 2020. Photovoltaic and energy storage systems related to renovation projects can enjoy 110% tax relief.
Based on the policies and subsidies of European countries on energy storage, the economy of energy storage in Europe has been opened up, and the market demand for household energy storage industry has begun to rise.
It is estimated that the household energy storage demand in Europe will be 20.95GWh in 2025, and the other energy storage demand will be 6.5GWh, totaling 27.45GWh. From 2021-2025, the CAGR will reach 77.3%.
The energy storage of the United States mainly comes from California
The United States is the world’s largest energy storage market. In 2021, 3.5GW/yoy+133% of new energy storage projects were put into operation, accounting for 34% of the world’s total. In the first quarter of 2022, it maintained a high growth rate, with 0.96GW/yoy+240% of new energy storage.
California’s energy time shift, industrial and commercial, and household energy storage installations are all in an absolute leading position in the United States. The reason can be summarized as mature power system and good economy.
In 2021, the installed capacity of electrochemical energy storage in the United States will be 3.5GW/yoy+133.3%, more than doubling for two consecutive years. In 2022, the US energy storage industry continued to maintain a high growth trend, with the installed capacity of 0.96GW/yoy+240% in the first quarter.
From the perspective of the installed capacity scenario, the energy storage in the United States is mainly in front of the meter, and 88% of the installed capacity is in front of the meter. At present, the industrial, commercial and household energy storage accounts for a relatively low proportion.
However, with the increase of subsidies and the maturity of the local power market in the United States, the economy is prominent, and the growth rate may increase.
It is estimated that in 2025, the demand for industrial and commercial energy storage and household energy storage in the United States will be 5.9GWh and 13.5GWh respectively, and the CAGR will be 109% and 96% respectively from 2021-2025.
The electrochemical energy storage in China grows rapidly
China’s electrochemical energy storage is growing rapidly, but the overall scale is still small. In 2021, China’s installed capacity of electrochemical energy storage was 2.4GW/yoy+53%. In the first half of 2022, energy storage industry maintained a high growth rate, with an installed capacity of 0.39GW/yoy+70%.
China’s electrochemical energy storage achieved a breakthrough from scratch in 2017-2021. The cumulative installed capacity in 2017 was only 0.4GW, but by 2021, it increased more than 13 times, reaching 5.7GW.
As far as China is concerned, the economy of energy storage is still poor, and the conditions for energy storage industry development are not yet available.
However, the strong energy storage policy can effectively stimulate short-term energy storage demand. Overlapping large bases and promoting projects throughout the county will bring about strong centralized and distributed demand for solar energy, and the short-term installed capacity of energy storage is expected to grow rapidly.
In the long run, the proportion of wind power generation will continue to increase, and China has introduced policies to increase the economic benefits of energy storage, and the margin of energy storage industry economy will be better. It is estimated that the installed capacity demand of the three scenarios in 2025 will be 53.93GWh, 7.6GWh and 14.76GWh respectively, with a total of 76.3GWh. CAGR will reach 111% from 2021-2025.
Several countries have their own development potential in energy storage industry
In 2021, the total installed capacity of energy storage in other markets except China, America and Europe will be only 2GW, and large-scale application has not yet been formed. However, many countries have the potential for energy storage industry development, and the demand may be gradually released.
South Korea once led the world in energy storage installation in 2018, but at that time, the energy storage safety design was poor, and the battery was mainly a ternary battery line, with frequent safety accidents. In the past two years, energy storage industry achieved negative growth.
Looking forward to the future, as LG and other leading enterprises began to develop lithium iron phosphate batteries, liquid cooling temperature control and fire protection products were gradually mature, and security problems were reduced, South Korea’s energy storage industry is expected to return to growth.
The spot electricity market and auxiliary service market in Australia are mature, with a high penetration rate of wind and solar power. With the introduction of tax rebate/subsidy policies by several state governments, the conditions for the development of energy storage industry are complete, waiting to be released.
In addition, Japan supports the development of energy storage industry through fund allocation, and the power grid construction in Africa is poor, so energy storage is needed to replace part of the power grid.
To sum up, with the continuous progress of carbon neutralization, energy storage industry in other regions outside China, the United States and Europe will also be gradually expanded. It is estimated that the demand will be 25.3kWh in 2025, and the CAGR will be 58.6% in 2021-2025.
Supply side analysis of energy storage industry
Cost reduction and cycle life improvement are the main focus of energy storage battery
The complete electrochemical energy storage system is mainly composed of battery pack, battery management system (BMS), energy management system (EMS), energy storage converter (PCS) and other electrical equipment.
The energy storage battery system consists of a battery pack and a battery management system. Battery pack accounts for the highest proportion of cost in the whole energy storage system, accounting for about 70%, BMS accounts for 6%, and the energy storage battery system accounts for 76% of the electrochemical energy storage cost.
At the current time node, the European household energy storage industry has started. In the next stage, the US household energy storage market will continue to drive the high growth of the household energy storage industry; In terms of centralized energy storage, the United States has reached the time point of spontaneous configuration.
With the expectation of marginal downward price of silicon and lithium carbonate, the demand for energy storage is more certain. China, driven by the strong allocation policy, also has a high expectation of installed capacity.
PV inverter companies seize the market opportunity of energy storage industry
The energy storage converter is a device that is connected between the battery system and the power grid to realize bidirectional conversion of electric energy. Most energy storage converter enterprises come from photovoltaic inverter manufacturers, and the energy storage industry competition pattern is similar.
Data shows that there are 30 PCS listed companies. According to statistics, in the global market, the top 10 energy storage PCS manufacturers include Sineng, KELONG, Soaring Electric, NR, SUNGROW and so on.
The energy storage converter industry continues to grow. According to the global market research report, the scale of grid connected energy storage inverter will increase to 7GW by 2022. The global energy storage inverter market size is expected to be 63GW from 2018 to 2022, showing a rapid growth trend.
The importance of energy storage temperature control system is highlighted
Temperature control refers to the effective control and adjustment of the temperature of something through heating or cooling technology. Energy storage temperature control technology mainly includes:
● Air cooling
● Liquid cooling
● Heat pipe cooling
● Phase change cooling
Among them, the air cooling system has simple structure, high reliability, long life and low cost, which is the mainstream technology path in China’s energy storage industry at present. The liquid cooling system has high heat dissipation efficiency and fast heat dissipation speed, and its advantages are prominent in the high magnification and high capacity scenarios.
Therefore, the global energy storage system is showing the trend of accelerating the penetration of liquid cooling to replace air cooling. Heat pipe cooling and phase change cooling need to be used together with air cooling and liquid cooling. Due to the high price, they are rarely used in the energy storage field.
The utilization rate of the global energy storage system has improved, which puts forward higher requirements for safety. The importance of the temperature control system is highlighted. With the advantages of heat dissipation efficiency and speed, the liquid cooling system is expected to accelerate its penetration.
In addition, the economy of energy storage industry in Europe and the United States is good. As the price of lithium battery raw materials decreases, the price sensitivity to the temperature control system will be reduced, which will also promote the application of liquid cooling system.
It is estimated that the global liquid cooling penetration rate will reach 45% in 2025, the market space of power system energy storage temperature control will reach 10.7 billion yuan, and the CAGR will be 92% in 2021-2025.
The increase of liquid cooling permeability will drive the average unit value of the temperature control industry to increase, and the compound growth rate of energy storage temperature control will exceed the average growth rate of the energy storage industry.