Large-scale energy storage-the development of energy storage industry
Table of Contents
The new energy industry has been booming in recent years, with promising prospects. However, with the rapid growth in installed capacity of wind power and photovoltaic, the problem of new energy consumption is becoming more and more prominent, and the energy transition is facing serious challenges. Based on this, people increasingly see the importance and urgency of developing large-scale energy storage.
New energy development and large scale energy storage
New energy development needs to rely on supporting energy storage
Over the past decade or so, China’s energy transition has achieved global prominence. According to Chinese government data, by 2021, China’s cumulative installed capacity of wind and scenery reached 26.7%, and 11.7% of wind and scenery power generation. Looking ahead, the share of new energy generation will continue to rise until it becomes the main source of electricity, while traditional thermal power slowly recedes to the second line, with the ultimate role as a peaking and complementary capacity.
According to research data, when the penetration rate of new energy from 20% upwards will cause a steep increase in the net load fluctuations of the power system, bringing challenges to the security of the grid.
So how to solve, is to support energy storage.
First of all, the new energy generation side configuration storage can balance the randomness and volatility of new energy, so as to effectively avoid the problem of power outages caused by insufficient generation capacity when the new energy output drops, or when the electricity load rises. For example, the integration of wind and storage projects.
Second, the configuration of energy storage on the grid, equivalent to the increase of the “buffer”, can effectively guarantee the dynamic balance between the power generation side and the use of electricity.
Finally, as the proportion of traditional adjustable power such as thermal power continues to decrease, the need to introduce energy storage as a new source of regulatory capacity, thereby strengthening the flexibility of the power system.
However, the current rate of installed energy storage is still far from the speed of renewable energy development, and there is still a significant gap. Moreover, the world is in the era of deepening electrification, and the scenarios of electrification will become more and more abundant in the future. According to the forecast, by 2060, the proportion of electrical energy to end-use energy is expected to reach 66%.
Condensed in one sentence, the increasing share of photovoltaic and wind power, large-scale energy storage is not only an important prerequisite for the development of new energy, but will also be deeply involved in the process of energy transformation and become a key component of the power system.The development of the energy storage industry is breaking through, and it is also a major trend. The top 10 lithium energy storage battery manufacturers in China have also long been poised for the spring of the energy storage industry.
Preliminary understanding of large-scale energy storage
The Chinese government has released a document saying that by 2030, the total installed capacity of wind power and photovoltaic in China will reach more than 1.2 billion kilowatts. In the face of such a large scale of new energy access, the pressure on the grid can be imagined. The power system urgently needs large-scale energy storage to solve the problem of new energy consumption, in order to improve the security and stability of the power system and energy system.
What is large-scale energy storage? As the name implies, it refers to energy storage with greater power and capacity. According to the national standard data, a large energy storage power plant is defined as a 30MW power plant and a 30MWh capacity and above energy storage power plant.
The main application scenarios of energy storage cover the power generation side (wind farms, photovoltaic power plants, traditional power plants, etc.), the grid side (grid companies, etc.) and the power consumption side (households, industry and commerce, etc.). Large-scale energy storage is more often used on the power generation side and the grid side.
At present, the large energy storage route presents a multi-point flowering situation, of which pumped energy storage and electrochemical energy storage are the most concerned.
Pumped energy storage. As the world’s most mature technology and the largest installed energy storage technology, it occupies about 86% of China’s installed energy storage capacity. It can be said that pumped energy storage acts as the anchor of the energy system.
Lithium battery energy storage. With short construction cycles, flexible site selection, excellent regulation performance, lithium battery energy storage has become the pioneer of electrochemical energy storage. According to data, global shipments of lithium batteries for energy storage totaled 142.7 GWh in 2022, up 204.3% year-on-year.
Sodium ion energy storage. In addition, although the energy density of sodium ion batteries is not high and cannot be compared with lithium batteries, it is more economical and safe, and is expected to be more widely used in the future in fields such as energy storage, becoming an important branch of electrochemical energy storage.
Large-scale energy storage opens up new horizons
The growth of volume
In the past, because the penetration rate of new energy was at a low level, the power system made full use of the regulating capacity of hydropower and carried out part of the flexibility transformation of thermal power units to meet the requirements of stable operation, so the power generation side of the demand for large energy storage is not urgent.
Now, in the context of the multiplication of new energy consumption pressures, from 2021 onwards, around the clear requirements of new energy storage configurations. Up to now, more than 20 provincial-level administrative regions in China have specified the proportion and length of new energy generation projects with energy storage, and the development of large-scale energy storage has become the consensus of the industry.
Improvement of business profit model
Beyond the macroscopic perspective, the next step is to look at the changing trend of large-scale energy storage from the perspective of commercial operation.
Large-scale energy storage as new energy generation enterprises just need, its construction cost and profitability has been the focus of the latter.
From the analysis of the income side of energy storage, energy storage projects are mainly charged at low electricity prices and discharged at high electricity prices to earn the difference in electricity prices to obtain the corresponding income.
Secondly, the power auxiliary service market mechanism is improving, and the revenue sources of large energy storage are more abundant, such as providing auxiliary service revenue, capacity leasing, capacity compensation, etc. This means that the problem of a single source of revenue for large energy storage in the past has opened up room for improvement, and in the future we can earn money by doing more “side business”.
For example, China is actively exploring the “shared energy storage” model to increase the revenue sources of energy storage plants. The so-called shared energy storage is the integration of independent and scattered power-side and grid-side energy storage resources, and to the grid for unified coordination, to provide services for multiple new energy power plants, thereby improving the utilization of energy storage resources and revenue capacity.
Then analyze the cost of energy storage. According to data, from 2010 to 2020 , the average price of lithium battery packs fell from 1100 US dollars / kWh to 137 US dollars / kWh, a drop of 89%. The next lithium battery energy storage system to play its greater effectiveness is the core driver or rely on the cost further down.
In short, only large-scale energy storage projects have achieved reasonable revenue capacity, in order to promote the installed capacity of energy storage, which in turn feeds the scale of new energy growth.
The outlook of energy storage battery
Looking ahead, the new energy installation will still maintain the trend of rapid growth. With the support of large-scale energy storage ushered in definite growth, the core of the industry chain will be the first to benefit from the dividends of industry growth.
For the lithium battery energy storage industry chain, the core link energy storage system consists of energy storage battery, energy storage converter (PCS), battery management system (BMS) and energy management system (EMS). Among them, the energy storage battery is the most important and the highest cost part of the energy storage system, accounting for 60% of the value of the energy storage system, the remaining PCS, EMS and BMS costs in descending order, respectively, about 20%, 10% and 5%. You can check out our top 10 energy storage PCS manufacturers in China to learn more about PCS.
Considering that the technical principles of energy storage batteries and power batteries are the same, and the capacity can be switched between each other, power battery companies have taken the lead in rushing into the energy storage track. So far, energy storage products have covered power generation side, grid side and user side, covering solar and wind power generation energy storage, industrial enterprise energy storage, commercial buildings and other fields.
Although energy storage batteries have low energy density requirements compared to power batteries, they have higher requirements for service life, charge and discharge times, battery safety, and economy, and battery companies with core technology and cost control capabilities are expected to take the lead in the future.