According to the latest research report, compressed air energy storage is one of the most potential large-scale long-term energy storage technologies. As of September 2022, the installed capacity of compressed air energy storage under construction/to be built in China is 6.3GW, which is much higher than the existing cumulative installed capacity of 182.5MW. Under neutral expectation, the installed capacity of compressed air energy storage in China will be 6.8GW in 2025 and 43.2GW in 2030. According to the National Development and Reform Commission, the installed capacity of new energy storage in China will exceed 30GW in 2025, so under the neutral expectation, the installed capacity of compressed air energy storage will account for 23%.

With the rapid development of the industry and the further maturity of the technology, the unit investment of the project is expected to continue to decline, the energy storage efficiency is expected to further improve, and the 100 billion investment demand for driving the core equipment of compressed air energy storage is accelerated.

｜ Long term energy storage is preferred

Compressed air energy storage system: the compressed air energy storage system is a system that uses high-pressure air pressure energy as energy storage form and generates power by expanding high-pressure air when needed. The working process of the system can be divided into energy storage and energy release.

1) Energy storage: the compressed air energy storage system uses wind/photoelectric or low valley electric energy to drive the compressor to convert electric energy into air pressure energy, and then the high-pressure air is sealed and stored in abandoned mines, caves, abandoned oil wells or artificial gas storage tanks.

2) Energy release link: by releasing high-pressure air to drive the expander, the stored air pressure energy is converted into mechanical energy or electrical energy again. In the energy release phase, the traditional compressed air energy storage system needs to burn fossil fuels in the combustion chamber to heat the air, so as to realize the function of using air to generate electricity.

｜ The domestic technology of the industrial chain is leading the world

1) Upstream - equipment, resource supply: core equipment includes air compressor, turbine expander, heat storage and heat exchange system, etc. In addition, gas storage salt cavern resources are required. The main participating enterprises in equipment manufacturing include Shaangu Power, Jintongling, Shengu Group, Hang Yang, Sichuan Airlines, etc.

2) Middle stream - technology supply and project construction: At present, the technology accumulation and project construction of domestic compressed air energy storage have achieved global leadership. The main technology providers are China National Energy Corporation, affiliated to the Institute of Thermophysics of the Chinese Academy of Sciences, and Tsinghua University and other universities; The participating enterprises in the project construction include China Energy Engineering Corporation Limited and China Power Construction Corporation Limited.

3) Downstream - power grid system: the compressed air energy storage power station is connected to the power grid system, serving industrial, commercial, residential and other sectors, and playing a key role in peak shaving, valley filling, frequency modulation, phase modulation, energy storage, emergency standby, etc.

At present, there are 9 projects completed/commenced in China, with a total installed capacity of 682.5MW.

｜ The commercialization process has been smoothly promoted

The trend of efficiency improvement+cost reduction is obvious, and the commercialization of compressed air energy storage is about to start.

1) Efficiency improvement: from the perspective of current installed projects, the system efficiency of megawatt can reach 52.1%, the system efficiency of 10 megawatt can reach 60.2%, the system design efficiency of 100 megawatt level and above can reach 70%, the efficiency of advanced compressed air energy storage system can approach 75%, and the efficiency has been equivalent to that of pumped storage (about 79%).

2) Cost reduction: After the system scale increases, the unit investment cost also continues to decline. The unit cost can be reduced by about 30% for each order of magnitude increase in the system scale. According to the statement made by Discipline, General Manager of China National Energy Storage Corporation, in an interview with CCTV, the cost of compressed air energy storage is about 5000 to 6000 yuan per kilowatt, which is close to the construction cost of pumped storage (about 5500 yuan/kW). With the improvement of the future system scale and the formation of the scale effect of the industrial chain, there is still much room for cost reduction.

| The market space of 100 million level is accelerated

Compressed air energy storage can supplement and replace pumped storage:

1) High functional similarity: the application scenarios are large-scale energy throughput, mainly used for peak shaving and valley filling, and load regulation.

2) The cost and efficiency are ready for commercialization: at present, the cost and efficiency of compressed air energy storage are equivalent to that of pumped storage, and there is still room for cost reduction in the future.

3) The construction period is relatively short: the construction period of pumped storage is 6-8 years, and the construction period of new compressed air is only 1.5-2 years, and there is no immigration problem involved.

From 2022 to 2025, the permeability of compressed air energy storage in the new energy storage capacity is expected to reach 10%. It is calculated that the new installed capacity is 6.59GW. It is estimated that the cumulative installed capacity of compressed air energy storage in 2025 will reach 6.76GW. From 2026 to 2030, the permeability of compressed air energy storage in the new energy storage capacity is expected to reach 23%. The calculated new installed capacity is 36.39GW. It is estimated that the cumulative installed capacity of compressed air energy storage will reach 43.15GW in 2030.

The core link of the industrial chain is the upstream equipment. The core equipment in the compressed air energy storage system mainly includes compressor, heat exchanger and expander, and the gas storage device is also very critical. With the rapid promotion of the industrialization of compressed air energy storage, the participants in the core equipment link of the industrial chain welcome the opportunity of rapid development.

Compared with hydrogen energy storage, gravity energy storage, liquid flow battery and other long-term energy storage routes, compressed air energy storage is closer to large-scale promotion of energy storage in terms of economy and technical maturity. At present, the energy conversion efficiency of the compressed air energy storage system has reached 70%. With the expansion of the scale in the future, the economy is expected to further highlight.