Policy support in the early stage of commercialization and is promising future
Energy storage market: Under the background of carbon neutrality, new energy storage is the general trend
Under the background of carbon neutrality, it has become a global consensus to promote the energy revolution and build a new power system with new energy as the main body. Energy storage, as the urgent need to coordinate and interact with the load storage of source network and realize the dynamic balance between power supply and demand, has become the core link. Among them, the new energy storage has fast response, flexible configuration and short construction period, which effectively avoids the geographical limitations of traditional pumped storage, improves the flexibility of power system, provides important support for achieving the goals of carbon peaking and carbon neutralization, and becomes the only way for upgrading and transforming the energy storage industry. After the 13th Five-Year Plan, China's new energy storage market is expected to reach a new level during the 14th Five-Year Plan period. 2021 is the first year for China's new energy storage to develop from the initial stage of commercialization to scale. According to the statistics of CNESA Global Energy Storage Project Library, by the end of 2021, the cumulative installed capacity of power energy storage projects put into operation in China was 46.1 GW, accounting for 22% of the total global market, with a year-on-year increase of 30%. Among them, the market increment mainly comes from new energy storage, with the cumulative installed capacity reaching 5729.7 MW, up 74.5% year-on-year. By the end of 2022, the installed capacity of new energy storage projects that have been put into operation nationwide has reached 8.7 million kilowatts, with an average energy storage time of about 2.1 hours, an increase of more than 110.0% over the end of 2021, with strong growth momentum. Taking advantage of the carbon neutral and peak carbon dioxide emissions strategy, the national and local governments have intensively issued a number of policies to promote the scale and comprehensiveness of the development of the energy storage market.
Figure 1: New energy storage is the general trend
Intensively release a serious of policy and clarify the independent market entity status of new energy storage
Since the National Energy Administration's Guiding Opinions on Promoting the Development of Energy Storage Technology and Industry clearly defined the great significance, general requirements, key tasks and safeguard measures for developing China's energy storage technology and industry, the National Development and Reform Commission, the National Energy Administration, the Ministry of Science and Technology, China Electricity Council and other departments have successively issued a number of policies in the past five years to lead the development of new energy storage. In July 2021, the National Development and Reform Commission and the National Energy Administration issued the Guiding Opinions on Accelerating the Development of New Energy Storage, pointing out that by 2025, the new energy storage will be transformed from the initial commercialization to large-scale development, with an installed capacity of over 30GW. By 2030, the comprehensive market-oriented development of new energy storage will be realized, the development goals of new energy storage within ten years will be defined, and its important position in promoting carbon peaking and carbon neutralization in the energy field will be established. At the end of July, 21, the National Development and Reform Commission further issued the Notice on Further Perfecting the Time-of-Use Electricity Price Mechanism, proposing to reasonably widen the price difference between peak and valley electricity prices and extend the implementation scope of the time-of-use electricity price mechanism to industrial and commercial power users, which effectively promoted the profitability of the industry and promoted the rapid development of the energy storage market. In the past 22 years, the national energy storage policy has been frequency released, with increasing efforts and improving details, which has further promoted the participation of new energy storage in the power market and dispatching application, and provided clearer guidance on the technical standard system, production scale and operation mechanism of different types of new energy storage.
Local Policy: Financial Subsidy and Compulsory Reserve Allocation to Promote the Rapid Development of the Industry
1. In order to support the smooth implementation of the new energy storage peak cut, local governments have successively introduced energy storage subsidy policies
On July 23, 2022, Chongqing's "Notice on Launching the Declaration of Optical Storage Integration Demonstration Project in Tongliang District in 2022 (Draft for Comment)" proposed to give a one-time subsidy of 1.3 yuan/Wh according to the scale of energy storage facilities. If new photovoltaic equipment is built at the same time as energy storage facilities, a one-time subsidy will be given to newly built photovoltaic equipment according to 2.9 yuan/W; On November 7th, the General Office of Changsha Municipal People's Government of Hunan Province issued the Implementation Opinions on Supporting the Advanced Energy Storage Materials Industry to Become Bigger and Stronger, supporting enterprises to use energy storage power stations to reduce electricity costs, and giving 0.3 yuan/KWh rewards to the operators of energy storage power stations according to the actual discharge capacity of energy storage power stations, with the annual reward amount of a single enterprise not exceeding 3 million yuan. The implementation of local subsidy policy is conducive to reducing the cost of electricity, improving the yield of energy storage power stations, improving the investment enthusiasm of the industry and boosting the sustainable development of the energy storage market.
2. In addition to the subsidy policy, many provinces and cities implement compulsory storage allocation
In order to promote the allocation and storage of new energy and reduce the impact of new energy projects on the consumption capacity of power grid, under the guidance of the central policy, relevant local departments have issued compulsory allocation and storage policy documents according to local conditions to promote the allocation and storage of new energy. Relevant documents put forward certain requirements on energy storage allocation ratio and charging hours, and allocated energy storage for new energy projects from "encouragement" to "compulsory", thus opening up incremental space for domestic energy storage market. At present, more than 24 provinces and autonomous regions in China have announced the allocation and storage policies, and the allocation and storage ratio in most provinces is between 8% and 30%, and the allocation time is mainly 1-2 hours, up to 4 hours.
3. During the "14th Five-Year Plan" period, the local government over-planned the installed capacity target and seized the opportunity of new energy storage scale
The "14th Five-Year Plan" is a key stage in the transformation of energy storage from the initial stage of commercialization to large-scale development. Qinghai, Inner Mongolia, Gansu, Guangdong, Hubei, Zhejiang, Beijing and other 20 provinces and cities have planned the installed capacity of new energy storage during the "14th Five-Year Plan" period. By 2025, the installed capacity of new energy storage will reach 66.55 GW, among which Qinghai, Gansu and Shanxi have the largest energy storage scale, and the installed capacity of new energy storage is expected to be 6GW in 2025. The establishment of the new energy storage installation target is conducive to mobilizing the investment enthusiasm of all parties, promoting steady investment and steady growth, better stabilizing market expectations and enhancing development potential.
Figure 2: Financial subsidies and compulsory allocation and storage are two-pronged approach to promote the rapid development of the industry
For new energy storage: The situation is clear and expect to prosperity
In the next five years, "new energy couple with energy storage" is the main application scenario of new energy storage, and policy promotion is the main growth driving force; According to the forecast of China Energy Storage Alliance (CNESA) on the market scale of new energy storage in China in the next five years, if the factors such as policy implementation, cost reduction and technical improvement fail to meet expectations, it is estimated that the cumulative scale of new energy storage will reach 48.5 GW in 2026 and the compound annual growth rate (CAGR) in 2022-2026 will be 53.3%, and the market will show a steady and rapid growth trend. Optimistic scenario: With the gradual improvement of the power market, the matching of energy storage supply chain and the maturity of business model, the new energy storage stands out in the competition by virtue of its advantages of short construction period, small environmental impact and low site selection requirements. It is estimated that the cumulative scale of new energy storage will reach 79.5 GW in 2026, and the compound annual growth rate (CAGR) from 2022 to 2026 will be 69.2%.
New energy storage: Various technical routes help the smooth operation of the power grid
Energy storage is the key to solve the problem of new energy power grid
Wind power and photovoltaic power generation has the characteristics of fluctuation, intermittence and randomness, and the power generated is poor in stability. The increase in the proportion of new energy power generation will seriously impact the stability of the power grid. In addition, due to the influence of geographical factors, wind and solar power generation is generally located in Northwest China, where the local population is small, the industrial scale is small, and the consumption capacity is limited, which leads to the serious phenomenon of abandoning light and electricity. At the same time, the power demand of power grid users fluctuates greatly in one day, which affects the stability of power grid. Energy storage technology can store redundant photovoltaic power generation in storage batteries during the day, make greater use of photovoltaic power generation and reduce electricity charges, store electricity during off-peak hours, transfer energy to peak hours, avoid expanding transformer capacity, provide peak value of highly variable load, and ensure smooth operation of power grid.
There are various types of new energy storage technologies to meet the diversified needs of the market
New energy storage refers to new energy storage technologies except pumped storage, including lithium-ion battery, flow battery, flywheel, compressed air, hydrogen (ammonia) energy storage, hot (cold) energy storage and so on. Compared with pumped storage, the new energy storage technology project has short construction period, simple and flexible site selection, strong adjustment ability, good matching with new energy development and consumption, and its advantages are gradually highlighted. There are various types of new energy storage and different characteristics. For example, flywheel energy storage refers to the energy storage mode that uses the motor to drive the flywheel to rotate at high speed and then uses the flywheel to drive the generator to generate electricity when needed. The technical characteristics are high power density and long life, which is suitable for short-term energy storage; Compressed air energy storage is a kind of physical energy storage technology which can run for a long time with high power, and is often used in long-term energy storage system. The large-scale development of new energy storage technology will gradually expand from standby (off-grid black start) and power (smooth power fluctuation and frequency modulation) to energy (temporary peak output for about 1 hour) and capacity (peak shaving and valley filling for more than 4 hours) to meet the diversified needs of energy storage market.
Pumped storage occupies most of share, and new energy storage lithium batteries occupy the mainstream
According to the incomplete statistics of CNESA Global Energy Storage Project Library, as of the end of 2021, the cumulative installed capacity of power energy storage projects that have been put into operation in China is 46.1 GW, of which the cumulative installed capacity of pumped storage is 39.8 GW, accounting for 86.3%; New energy storage accounts for 12.5%, and the market share of lithium-ion batteries in new energy storage is as high as 89.7%, occupying the absolute mainstream; By the end of 2022, the share of lithium-ion batteries in new energy storage has further increased to 94.5%, and the permeability of flow batteries has accelerated to 1.6%, showing a strong competitive advantage.
Figure 3: Pumped storage occupies an absolute share, and new energy storage lithium batteries occupy the mainstream
Compared with pumped storage, electrochemical energy storage has strong flexible adjustment ability
Pumped storage power station is a generator driven by a hydraulic turbine to generate electric energy, which is connected to the power grid through a transformer. Therefore, its regulating speed is consistent with that of conventional hydropower units, and it does not have the ability of rapid regulation. Electrochemical energy storage technology mainly realizes the conversion of electrical energy and chemical energy through battery or supercapacitor technology, and its comprehensive energy efficiency can reach 85% ~ 90%, mainly including lithium-ion battery, sodium ion battery, flow battery and so on. It not only has fast reaction speed and flexible adjustment ability, but also has high energy density and can store large capacity of electric energy; At the same time, it has the technical advantages of strong environmental adaptability, small decentralized configuration and short construction period, which can better stabilize the power fluctuation of distributed generation and promote system consumption.
The maturity of lithium battery industry chain is high, and the inflection point of commercialization of sodium and vanadium batteries is approaching
Lithium battery: power and energy storage are shared, and the industrial chain maturity is high
1. The large-scale development of power batteries lays a solid foundation in the field of energy storage
On June 29, 2022, the Comprehensive Department of the National Energy Administration issued "Twenty-five Key Requirements for Preventing Electric Power Production Accidents (2022 Edition)", which mentioned that ternary lithium batteries and sodium-sulfur batteries should not be selected for medium and large electrochemical energy storage power stations, and cascade power batteries should not be selected, so lithium iron phosphate batteries have become the main technical route for electrochemical energy storage. In addition to the differences in electrochemical performance indexes and appearance dimensions, lithium iron phosphate batteries used for power and energy storage are highly consistent in material system design, battery packaging structure (square aluminum shell), production equipment and process. Therefore, the rapid growth of power batteries and the improvement of permeability of lithium iron phosphate batteries accelerate the maturity and scale of the industry, greatly reduce the cost, and lay a foundation for its application in the field of energy storage.
2. Low cost and long life are the technical directions pursued by energy storage batteries
Compared with consumers of power batteries, they pay more attention to experience. Energy storage batteries are investment products with the characteristics of new infrastructure, and pay more attention to return on investment, return cycle, electricity consumption cost, initial investment cost and so on. Therefore, the pursuit of low cost and long life has become the main direction of lithium iron phosphate battery technology development. In 2020, Contemporary AMPEREX developed an advanced long-life zero-attenuation battery, which can achieve zero attenuation within 1500 cycles, and was successfully applied to the first phase of the pilot project of Jinjiang Energy Storage Power Station in Fujian (30MW/108MWh). It is the first lithium iron phosphate battery with a cycle life of more than 12,000 cycles in the industry. In October 2022, EVE Energy released LF560K battery, which has an ultra-large capacity of 560Ah. A single battery can store 1.792 kWh of energy and has a cycle life of more than 12,000 times. The total cost of the system can be reduced by adopting CTT (Cell to TWh) technology. In the application of system integration, the number of batteries can be reduced by 50%, the number of Pack parts can be simplified by 47%, and the production efficiency can be improved by 30%.
3. The energy storage battery industry chain can be divided into upstream materials, midstream energy storage systems and integration, and downstream power system energy storage applications
Upstream is the same as power battery industry chain, including positive electrode, negative electrode, separator, electrolyte and so on. The middle reaches of the industrial chain are mainly the integration and manufacturing of energy storage systems, including battery pack, battery management system (BMS), energy management system (EMS) and energy storage converter (PCS). Among them, the battery pack is the most important component of the energy storage system, which is responsible for energy storage; Battery management system is mainly responsible for battery monitoring, evaluation, protection and balance; The energy management system is responsible for data collection, network monitoring and energy scheduling. Energy storage converter can control the charging and discharging process of energy storage battery pack, and carry out AC/DC conversion. Downstream is mainly the power system energy storage on the power generation side, the grid side and the user side.
Figure 4: The energy storage battery industry chain can be divided into upstream materials, midstream energy storage systems and integration, and downstream power system energy storage applications
Sodium electricity: The material cost advantage is obvious, and the commercialization process is accelerated
1. Sodium resources are abundant and have the advantage of material cost
In the periodic table of elements, sodium and lithium belong to the first main group and have similar physical and chemical properties. They all show similar "rocking chair" electrochemical charging and discharging behaviors in battery operation, with the same working principle and similar battery structure. In recent years, the reserves of lithium ore resources are scarce (the content is 0.0065%), the distribution is uneven, and the price has soared. On the contrary, the reserves of sodium mineral resources are very rich (the content accounts for 2.75%), and the balanced distribution is not limited by regions, so the attention of sodium electricity is increasing. In addition, the choice of current collector is different. Aluminum foil with lower cost is used as current collector on the negative side of sodium ion battery. If aluminum foil is used in lithium battery, it is easy to undergo alloying reaction with metal lithium, resulting in rapid capacity attenuation. According to the calculation of HINABETTERY company, when the lithium price is 150,000 yuan/ton, the theoretical material cost of sodium ion battery can still be 30%-40% lower than that of lithium battery, with obvious advantages.
2. Cathode materials have various technologies
It is reported that the cathode material system of sodium ion battery is mainly divided into three technical routes: layered transition metal oxide, polyanion and Prussian blue. Layered transition metal oxide cathode has the characteristics of low cost, simple process and relatively mature technology, and takes the lead in mass production; Prussian blue has low cost, high specific capacity and energy density, excellent magnification performance and great potential in the future. Polyanionic material system is similar to lithium iron phosphate material, which has low cost, no resource limitation, good recycling and safety, is suitable for large-scale application, and is expected to be applied to the energy storage market on a large scale in the future. Diversified technical routes, compatible and complementary with lithium batteries, are important guarantees for the long-term stable development of China's new energy industry.
3. The commercialization of sodium batteries is accelerating, and 23 years is expected to become the first year of mass production
Since the first generation of sodium ion batteries were released in Contemporary AMPEREX in July 2021, the commercialization of sodium electricity has accelerated, and it is estimated that a basic industrial chain will initially form in 23 years. On October 27, 2022, TRANSIMAGE Technology Sodium Power Pilot Line was successfully put into operation, and the first phase of 4.5 GWh production line is expected to be put into operation in 23 years. At the same time, 30,000 tons/year of positive electrode materials, 40,000 tons/year of negative electrode materials and 150,000 tons of electrolyte are matched to build an integrated industrial development model. On November 29, 2022, the world's first GWh-class sodium ion battery production line of HINABETTERY (Fuyang) went offline, which is expected to expand to 3GWh-5GWh in 23 years, and it is expected to complete the implementation and use of 100MW-class sodium ion battery energy storage system. In addition, China Energy Construction Anhui Institute won the bid for the EPC project of Anhui Fuyang Energy Storage System of Three Gorges Energy, which is currently the largest sodium ion energy storage battery project in China, containing 270MW/540MWh lithium iron phosphate battery and 30MW/60MWh sodium ion battery, which is expected to be put into operation in June 2023. With both supply and demand booming, the commercialization of sodium ion batteries ushered in an inflection point.
Figure 5: The commercialization of sodium ion batteries is accelerating, and 23 years is expected to become the first year of mass production
Vanadium electricity: long life and high safety, energy storage rookie ushered in the dawn of commercialization
1. Vanadium battery is a flow battery with long life and high safety
Vanadium battery is called all-vanadium redox flow battery, which is stored in sulfuric acid electrolyte of vanadium ions with different valence states in the form of chemical energy. Electrolytic pressure is introduced into the battery stack through an external pump to make it circulate in different liquid storage tanks and closed circuits of half batteries. Electrolyte solution flows parallel through the electrode surface to generate electrochemical reaction, and current is collected and conducted through double electrode plates, so that chemical energy stored in the solution is converted into electric energy; The water-based electrolyte characteristics of all-vanadium redox flow battery can prevent its combustion and explosion, and have high safety. The power and capacity of the battery are independent of each other, which realizes the separation of the power and capacity of the battery core. The capacity can be expanded by increasing the capacity of the liquid storage tank, and it has a long cycle life of more than 16,000 times, which is suitable for large-scale energy storage scenarios.
2. It is used for long-term energy storage and has obvious economic benefits
The output power and energy storage capacity of all-vanadium redox flow battery can be independent of each other. The longer the energy storage time, the lower the cost per kilowatt hour and the cheaper the price. Especially, when the energy storage time exceeds 4h, the cost per wh is reduced to below 3 yuan. In addition, the electrolyte of all vanadium redox flow battery can be recycled online or offline. 1kWh electrolyte contains about 8kg of high purity V2O5, and the residual value rate of electrolyte is very high. According to the calculation, for the system with energy storage time of 4h, the initial investment cost is 3000 yuan/kWh, the residual value of the battery system is 1125 yuan/kWh, and the actual cost is about 1875 yuan/kWh. If the energy storage time is 10 hours, the initial investment cost is 2100 yuan/kWh, the residual value of the battery system is 1080 yuan/kWh, and the actual cost is only 1020 yuan/kWh. Therefore, from the perspective of life cycle, all-vanadium redox flow battery has low power consumption cost, high costs performance and good economic benefits.
3. The initial installation cost dropped more than expected
Because the imperfection of the industrial chain is constrained by the high cost of initial installation, the commercialization of vanadium electricity develops slowly; On November 3, 2022, CNNCHN announced the successful candidates for 1GWh flow battery energy storage procurement, and the unit price range of five candidates was 2.2 yuan/Wh ~ 3.6 yuan/Wh. Among them, the average bidding prices of Dalian RONGKE power and Liquid Flow ENERFLOW are 2.65 yuan/Wh and 2.2 yuan/Wh, respectively. Compared with the unit price of Hubei Project of National Power Investment in August 21, 3.8 yuan/Wh, the initial installation cost price dropped more than expected, which is conducive to promoting the large-scale application of vanadium batteries.
4. The commercial process of vanadium and electricity is speeding up, and the future prospects can be expected
In March 2022, the National Development and Reform Commission and the National Energy Administration jointly issued the Implementation Plan for the Development of New Energy Storage during the 14th Five-Year Plan, which clearly stated that the 100 MW flow battery technology should be included in one of the key directions for tackling key problems of new energy storage core technology and equipment during the 14th Five-Year Plan. The policy outlines the development prospect and accelerates the commercialization of vanadium battery energy storage. From 2020 to now, according to the statistics of ZERO power, the installed capacity of the planned vanadium battery project has reached 6GW and the capacity has exceeded 20GWh. At the same time, the first GWh-level centralized production of all-vanadium redox flow battery energy storage was opened, and Dalian redox flow battery energy storage peaking power station, the first national large-scale chemical energy storage demonstration project, was officially connected to the grid for power generation. According to EV Tank's forecast, a large number of vanadium battery energy storage projects in China will start construction in 2022, and it is estimated that the new installed capacity will reach 0.6 GW; In 2025, the new scale of vanadium battery will reach 2.3 GW, with a compound growth rate of 40%, and in 2030, the new scale will reach 4.5 GW, when the cumulative installed capacity of vanadium battery energy storage project will reach 24GW.
5. Domestic enterprises have brake into the market of vanadium and electricity industry chain one after another
Stack and electrolyte are the core components of flow battery. The stack is mainly composed of ion exchange membrane, electrode, bipolar plate, etc. The representative companies are Dalian RONGKE Power, Beijing VRBENERGY, LESHAN SHENGJIA Electric, etc. Ion exchange membrane can separate positive and negative electrolytes and selectively pass qualified ions. However, due to its complex preparation process, it has long been monopolized by a few American and Japanese manufacturers such as DUPONT, GORE and ASASH GLASS Co. Domestic enterprises such as DONGYUE Group and Jiangsu HOPERUN Software are accelerating domestic substitution. Electrolyte accounts for 40% of battery cost, and representative companies include DALIAN BOLONG NEW MATERIALS CO.LTD. and Hunan Province YINFENG New Energy Co., Ltd. The raw material of the core component in electrolyte is vanadium pentoxide, and the production capacity of vanadium resources in China is relatively concentrated. PANGANG Group Vanadium Titanium and Resources Co., Ltd. and HBIS Company Limited. are in a leading position in the world in the comprehensive use of vanadium and titanium resources and the production of vanadium products.
Under the Driven from the Policy and Demands,Future of New Energy Storage Looks Promising-China.exportsemi.com
