This year, the National Development and Reform Commission and the National Energy Administration issued the 14th Five-Year Plan for the Development of New Energy Storage, proposing to vigorously develop new energy storage. It indicates that Chinese energy storage market will usher in even greater development opportunity in the future. According to the Energy Storage Application Research Report 2022 issued by China Chemical and Physical Power Industry Association, the installed capacity of electrochemical energy storage will reach about 110 gigawatts by 2030. After 2025, the annual installed increase of electrochemical storage will remain at 12 gigawatts to 15 gigawatts.

In addition, under the dual-carbon background, the installed amount of new energy power generation continues to grow.

Data showed that by the end of May this year, China's installed capacity of non-fossil power generation was 1.01 billion kW, of which the installed capacity of new energy such as wind power and solar power was 667 million kW. The installed capacity of new energy power generation is expected to reach 1.64 billion kilowatts by 2030, accounting for 43.2 percent of the installed capacity.

| understanding energy storage industry

Energy storage refers to the process of storing a kind of energy in the same or another form of energy through a medium or equipment, and releasing it in a specific form according to the requirements of the application. According to different access modes and application scenarios, the application of energy storage system mainly includes centralized and distributed forms.

Distributed energy storage system has a wide range of application scenarios because of its flexible access location. Combined with the composition of the power system, the application scenarios of distributed energy storage mainly include the power generation side, the power grid side and the power consumption side, which can be divided into the following six categories: auxiliary energy storage for new energy stations, user-side energy storage, micro-grid energy storage, distributed generation trading auxiliary, incremental distribution network energy storage and grid side energy storage.

| industry is flourishing, trillions of blue ocean market

From the perspective of the global and Chinese energy storage project composition, relatively mature energy storage technologies are respectively pumped energy storage, electrochemical energy storage, molten salt energy storage, compressed air energy storage and flywheel energy storage. The installation of electrochemical energy storage has the fastest growth, becoming the main force to promote the development of energy storage market.

By the end of 2020, the world's total installed capacity of energy storage projects has reached 191.1GW, with pumped storage projects accounting for 90.3% of the total. The cumulative installed capacity of the electrochemical energy storage project reaches 14.2GW, and in the new 4.7GW put into operation in 2020, electrochemical energy storage accounts for about 75%. The newly installed global electrochemical energy storage capacity is 10GW in 2021, and it is estimated that the newly installed global electrochemical energy storage capacity is 25/40/55/75GW in 2022-2025.

China's energy storage industry is in the stage of coexistence of multiple energy storage technology routes. Pumped storage is the most mature mainstream energy storage technology with the largest installed capacity and the lowest KWH cost, accounting for 90.3% in 2020. The proportion of electrochemical energy storage is about 7.5%.

| energy storage industry chain is perfect

The upstream participants in China's electrochemical energy storage industry are equipment suppliers, including energy storage battery, battery management system, energy management system, energy storage converter and other equipment suppliers. The midstream is the energy storage system integrator and the investment and operation of energy storage power station, and the downstream is the energy storage application body.

1. Energy storage system: including battery, PCS, BMS, EMS and other links, the specific targets include Ningde Times, Yi Wei Lithium Energy, Sunshine Power supply, Nandu Power supply, Costar, Kehua Data and so on, among which the leading companies Ningde Times, BYD, Sunshine Power Supply, Jinlong Technology and so on are exported to overseas.

2. Project EPC, grid-connected detection, late operation and maintenance: specific targets include Nanwang Technology, Attus, Linyang Energy, Baoguang Electric, Wanliyang, Institute of Electrical Science and Technology, etc.

| energy storage market, head enterprise first-mover advantage obviously, latecomers competition is intense

Domestic: The energy storage demand is estimated to be 49.5GW/126.7GWh in 25 years.

According to the calculation of Guolian Securities Research Institute, the energy storage demand in 2022 will reach 7.9GW/18.4GWh, and it is estimated that the energy storage power demand and capacity demand will increase by 227% and 276% respectively. It is estimated that the energy storage demand in 2025 will be 49.5GW/126.7GWh, and the corresponding power demand and capacity demand will be CAGR of 113% and 125% in 21-25 years, respectively.

With the further development of the market in the future, enterprises with products, channels and cost advantages will still benefit from the high growth rate of the industry and finally stand out.

Global: It is estimated that the newly installed capacity of global energy storage will be 107.82GW/285.35GWh in 25 years.

On the basis of the rapid growth of energy storage market demand in Europe and China, it is expected that a large number of electric energy storage and household energy storage demand in the United States will still occupy an important share of the global market, while the market potential of Asia-Pacific, Latin America, the Middle East and other markets will be gradually released. It is estimated that the global energy storage demand in 2025 is expected to be 107.82GW/285.35GWh. The CAGR of the corresponding energy storage power demand and capacity demand for 21-25 years is 80.31% and 77.44%, respectively.

| energy storage "draught" attracts a lot of oil company

In the context of carbon neutrality, photovoltaic, wind power and other new energy are in a period of rapid development. As an important supporting link, energy storage industry is also making great progress. In the future, energy storage is expected to open up a larger market space, and therefore will become one of the basic configurations of energy companies. In recent years, energy storage "tuyere" has attracted the attention of many traditional oil companies, many companies see the opportunity to increase the merger and acquisition efforts.

In May, Total Energy signed an agreement with GIP to acquire a 50 percent stake in ClearwayEnergy Group (CEG), the fifth-largest renewable energy company in the United States. Operates 7.7 gigawatts of wind and solar assets and has 25 gigawatts of renewable energy and storage projects. bp and Tesla's energy business unit have teamed up to install a wind farm energy storage project in the Midwestern state of South Dakota. Savion operates under Shell's renewable Energy and Energy Solutions integrated power business under its existing brand name.

Although most of the energy storage systems deployed in recent years are battery storage systems, new energy storage technologies are emerging and rapidly entering the market as costs fall and the demand for long-term storage increases, and are expected to play a pivotal role in the future. But the consensus in the industry is that lithium-ion technology will continue to play a dominant role in energy storage for some time. Lithium-ion batteries are expected to dominate the market until at least 2030, given their cost competitiveness and well-developed supply chain.

At present, the technology, market, policy, legislation, standards and regulation of the energy storage industry are still in the early stage of development. For traditional energy enterprises, it is of great importance to make a forward-looking layout, pay attention to energy storage technology reserves, and participate in the development of large-scale energy storage projects at the right time, so as to gain a dominant position in the fierce market competition in the future. The future of energy storage is not yet known, but it is certain that the energy storage industry is approaching its golden age.