"On the path where wind, solar, and energy storage go hand in hand, if we say that wind and solar are in their youth, then energy storage is still in its adolescence, urgently needing rapid growth to develop in tandem and balance with wind and solar," said Zhu Gongshan, Chairman of the Global Green Energy Council (GGEIC) and Leader of the SNEC Photovoltaic-Energy Storage-Hydrogen Industry Alliance, describing the current development of the energy storage industry.
From September 24th to September 27th, the SNEC 9th (2024) International Energy Storage (Shanghai) Technology Conference and Exhibition (hereinafter referred to as "SNEC ES+2024 International Energy Storage Congress") was successfully held at the Shanghai New International Expo Center.
The International Finance News reporter learned from the organizer that the exhibition covered an area of over 60,000 square meters, gathering more than 500 domestic and international exhibitors, with exhibition content covering the full range of technical research, integrating and concentrating the entire industry chain, attracting more than 150,000 professional visitors, and also welcoming international delegations and visiting groups from Germany, Italy, the Middle East, Africa, and other countries and regions.
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In the view of industry insiders, the SNEC ES+2024 International Energy Storage Congress is the highest standard in previous sessions, reflecting the strong momentum of the energy storage industry's development and highlighting the importance of the industry's future status. However, with the rapid expansion of the industry, issues such as low-price competition, technical shortcomings, safety hazards, and low utilization rates have emerged one after another. Especially with the ups and downs of the photovoltaic industry as a precedent, how the energy storage industry can overcome the above-mentioned stage development bottlenecks, support the construction of a new type of power system, and help achieve the "dual carbon" goals has become an important topic of this conference.
The Reality and Illusion of the Trillion-Dollar Opportunity
In recent years, the global demand for green development and low-carbon energy transformation has become increasingly urgent, and energy storage, as a key element of transformation and development, plays an extremely important role. Under the "dual carbon" goal, China has contributed nearly half of the global energy storage market, and the domestic energy storage industry has also entered the "fast lane" of development driven by both policy and market.
Firstly, there are frequent policy benefits. According to statistics from the中关村 Energy Storage Industry Technology Alliance (CNESA), as of July 2024, China has issued more than 2,200 energy storage policies. Especially this year, new-type energy storage was written into the government work report for the first time; from January to July 2024, nearly 500 new policies were issued, 1.6 times that of the same period last year.
Secondly, the market enthusiasm is high. The "14th Five-Year Plan for the Development of New-Type Energy Storage" clearly proposes that new-type energy storage will enter the stage of large-scale development from the initial stage of commercialization by 2025, with the goal of having the conditions for large-scale commercial application. According to forecasts from the China Industrial Association of Power Sources, at that time, the scale of China's new-type energy storage industry will break through one trillion yuan.
To seize this trillion-dollar opportunity, the energy storage industry has ushered in an investment boom. Tianyancha data shows that the number of new energy storage-related enterprises established in 2023 reached 72,000, doubling the growth compared to 2022. In the first half of this year, among the 34 energy storage equipment enterprises classified by Shenwan Industry Classification (2014), a total of 25 achieved profitability, accounting for more than 70%.At the opening ceremony of the 9th (2024) SNEC International Energy Storage (Shanghai) Technology Conference, Zhou Guoping, the 14th National Committee Member of the Chinese People's Political Consultative Conference (CPPCC), former Chairman and Party Secretary of China Energy Construction Group Co., Ltd., disclosed that from January to August this year, the total investment in domestic energy storage projects has exceeded 300 billion yuan. In the first half of this year, the newly added installed capacity of new energy storage has reached 26.4 million kilowatt-hours, a year-on-year increase of 48.5%.
However, as the energy storage industry officially enters the stage of large-scale development, the development of new energy storage also faces many challenges. In the view of Wang Siqiang, President of the China Electric Power Construction Enterprise Association, Co-Chair of the International Finance Forum (IFF) Energy Transition and Development Committee, and the first Secretary-General of the National Energy Expert Advisory Committee, the industry currently faces four major difficulties. First, the development positioning needs further clarification; second, the planning and operation are not yet standardized; third, there are still many hidden dangers in the industrial development, especially with new technologies competing for attention, the risk of elimination cannot be ignored, the quality of equipment is uneven, and safety issues are frequently raised; fourth, it is difficult to make a profit due to price competition.
Zhu Gongshan also pointed out three pain points: First, there is still a gap between reality and ideal, and the energy storage industry urgently needs to improve utilization. In the first half of this year, the average utilization index of national electrochemical energy storage power stations was 42%, and most energy storage power stations have not yet reached half of the designed number of charge-discharge cycles.
Second, the degree of internal competition has slightly improved, but the industry inflection point has not yet appeared. Zhu Gongshan said that in the first half of this year, although the investment in energy storage capacity returned to rationality and production increased year-on-year, the total export volume decreased year-on-year due to factors such as the decline in upstream raw material prices. At the same time, the industry competition is still fierce, many enterprises show the phenomenon of increasing revenue but not profit, and about 30% of cross-border energy storage enterprises have already disappeared in the market, and this trend is still continuing.
Finally, the energy storage price continues to fall, and it will take time to turn around. It is reported that the current lithium battery energy storage cell unit price is approaching 0.3 yuan/Wh, the lithium battery energy storage system unit price has decreased by 49% compared to the same period last year, and has broken through 0.5 yuan/Wh, and the average winning price of energy storage engineering total contract (EPC) in the first half of the year has decreased by 27% year-on-year.
Wang Siqiang believes that in the face of these urgent problems to be solved, all parties urgently need to pay attention from the height and perspective of high-quality development of the industry. At the government level, it is necessary to carry out special planning for energy storage, further clarify the independent market entity status of new energy storage, improve the price mechanism, project incentive mechanism, and energy storage technology standards and management system of new energy storage. It is necessary to vigorously promote the construction of energy storage projects on the power side, actively promote the reasonable planning and layout of energy storage on the grid side, and strongly support the diversified development of energy storage on the user side. At the enterprise level, it is necessary to carry out forward-looking, systematic, and strategic research and development of key energy storage technologies, and promote the research and development of strategic energy storage key technologies for key material unit modules. At the social level, especially at the level of industry associations, it is necessary to actively promote the training of energy storage technology discipline professionals, help build energy storage technology industry-education integration innovation platforms, actively promote the transformation of innovative results, and help carry out energy storage industrialization demonstrations.
Long-term energy storage demand highlights
In the view of industry insiders, the energy storage industry is at the starting stage of high-quality development, and the so-called pain points are also opportunities.
As we all know, the application scenarios of the energy storage industry can be divided into power side, grid side, and user side. At present, China is building an electric power storage system dominated by pumped storage and supplemented by new energy storage. In terms of new energy storage, lithium-ion battery energy storage, with the advantages of cost and density, occupies a dominant position, and the integration scale is developing towards gigawatts. With the continuous increase in the proportion of wind and photovoltaic installations, the matching contradiction between the power generation side and the power consumption side is becoming more and more prominent, especially the limitations of short-term energy storage dominated by lithium batteries are exposed, and long-term energy storage of more than 4 hours urgently needs breakthroughs. In addition, lithium-ion battery technology still has problems such as insufficient safety and difficulty in recycling and utilization.Against the aforementioned backdrop, the year 2023 marks the inaugural year for long-duration energy storage investment. It is understood that last year, approximately 20 companies related to long-duration energy storage secured financing, with over 100 investment institutions participating, and the total investment amount approached 5 billion yuan.
The current updates and iterations of energy storage technology are no longer limited to lithium batteries but have shown a characteristic of diverse coexistence and flourishing. In the leadership dialogue under the theme of "Global Energy Transition and Energy Storage Industry Development under the Dual Carbon Goals," Cao Hui, Chairman and President of Ruipu Lanjun Energy Co., Ltd., stated, "We cannot deny any technological path."
In Cao Hui's view, whether an energy storage technology has an advantage mainly depends on three aspects—"one high, one low, and one fast." Among these, "one high" refers to high energy efficiency or high energy density, "one low" refers to low cost, and "one fast" refers to a rapid response speed. Regardless of the type of energy storage technology, if it possesses two or more of these advantages, it has prospects for future development.
Wu Jianbin, Chairman of Changxing Taihu Energy Valley Technology Co., Ltd., stated that any energy storage technology that meets four dimensions has opportunities for development. These four dimensions include unrestricted raw material availability, stability and safety, high raw material recycling and utilization rates, and sustainable economic advantages.
Based on the above considerations, Changxing Taihu Energy Valley is positioning itself in the lead-carbon energy storage field. According to Wu Jianbin, lead and carbon resources are relatively abundant in nature, and China has a large number of lead-zinc mines, accounting for about 20% of the global total. In addition to the low raw material cost, the construction cost of lead-carbon battery energy storage is around 0.35 yuan/Wh to 1 yuan/Wh, and its electricity cost is relatively low. At the same time, the environmental load of lead-carbon energy storage throughout its lifecycle is low, and the battery's positive and negative electrode materials and electrolyte can all be recycled, with a simple and mature recycling process, and a recycling rate as high as 90%. Moreover, lead-carbon energy storage has long duration capabilities, with energy storage times exceeding 10 hours.
At present, China's lead-carbon energy storage has established a complete industrial chain and supply chain system. It is understood that the Changxing Heping Joint Storage Comprehensive Smart Energy Project, invested in by Zhejiang Guodian Investment, Jidong Share Guodian Investment, and Taihu Energy Valley, has a total investment of about 1 billion yuan, with a scale of 100MW/1.06GWh. It is the first GWh-level single energy storage power station in China and also the largest lead-carbon energy storage power station in the country.
In addition, Jidong Share has cooperated with Taihu Energy Valley and other companies to create the Jidong Energy Valley lead-carbon battery production and waste battery comprehensive utilization project in the Baicheng Green Electricity Industry Demonstration Park in Jilin. The total investment is 10 billion yuan, and the plan is to build an 85GWh lead-carbon battery research and development production base. The first phase of the project, which produces 5GWh of lead-carbon batteries annually, has officially started production.
From the perspective of power system planning, Han Xiaoqi, Chief Safety Officer of the Electric Power Planning and Design Institute and Deputy Secretary-General of the China New Energy Storage Industry Innovation Alliance, stated that the domestic energy storage market is vast and varies in conditions. When constructing energy storage projects, it is generally necessary to consider the construction pace, including short cycles, medium cycles, and long cycles, and to use different technological paths to match the construction plans. Taking remote areas as an example, they have abundant mountain and water resources, good pumped storage conditions, and can build a large amount of new energy. At the same time, the safety requirements in remote areas are relatively lower, and often only a firewall needs to be set up to use lithium batteries. In places with higher safety requirements or tight land resources, the safety and cost advantages of flow batteries are greater.
It is reported that the flow battery with the highest degree of commercialization and technological maturity is the all-vanadium flow battery, which has a charge and discharge cycle life of over 20,000 cycles and a calendar life of more than 15 years (generally over 20 years), making it the longest-lived among all types of secondary batteries.AI and Energy Storage: A Two-Way Embrace
This year, there has been a continuous emergence of anxious voices about "artificial intelligence (AI) being constrained by energy." Jensen Huang, founder and CEO of NVIDIA, previously pointed out in a public speech that the end of AI lies in photovoltaics and energy storage. On the path to promoting the development of AI, one should not be limited to just enhancing computational power but should more comprehensively examine the core issue of energy consumption. Sam Altman, founder of OpenAI, also publicly stated, "The future of AI technology depends on energy, requiring more photovoltaics and energy storage."
In fact, AI's high dependence on energy is not baseless. According to a report by The New Yorker magazine, to respond to approximately 200 million user requests, ChatGPT may consume over 500,000 kilowatt-hours of electricity per day, which is more than 17,000 times the average electricity consumption of an American household. Moreover, if generative AI is further adopted, the electricity consumption may be even greater.
Given that existing fossil energy sources cannot possibly meet the subsequent demands of AI development, vigorously developing new energy is not only about solving environmental issues but also about addressing the energy issues behind the digital revolution. The intermittent and fluctuating characteristics of new energy generation are restricting its further development and have determined that future energy storage systems will become the core and hub of power generation and consumption.
At the same time, the involvement of AI is providing more flexible and efficient solutions for energy storage dispatch. Elina Kamenova, the head of industrial decarbonization at the World Economic Forum, previously stated that to achieve zero net emissions from economic activities, the cleanliness, modernization, and decarbonization of the power network are crucial. AI helps solve the problem of integrating a large amount of renewable energy into the power grid. The fluctuation in renewable energy generation leads to an excess of power supply during peak periods and a lack during low periods, causing resource waste and grid instability. By analyzing data such as weather patterns and energy consumption trends, AI can accurately predict power generation and promote job scheduling and load migration, ensuring that data centers effectively utilize energy when powered by renewable energy, ensuring the stable and efficient operation of the power grid, and achieving a 24-hour sustainable clean electricity supply.
At the thematic forum on "AI + Energy and Energy Digitalization - Empowering the Development of New Quality Productivity in Energy Storage and Hydrogen," Miu Nanlin, the director of the energy storage industry at Nanjing NARI Technology Co., Ltd., delivered a keynote speech on "Key Technologies and Applications for the Construction and Stable Operation of New Energy Power System Networks."
It is reported that to address issues such as insufficient grid regulation capabilities under the new type of power system and the marketization of electricity, insufficient utilization of new energy, ineffective participation of distributed energy in large grid regulation, and insufficient forward-looking capabilities of the electricity market, the company has developed the PCS-9000 grid active power autonomous cruise system. This system follows the concept of information fusion, autonomous cruise, and safe scheduling, proposes a multi-resource and multi-target spatiotemporal collaborative optimization dispatch architecture adapted to the characteristics of the new type of power system, and develops a highly scalable active optimization dispatch general algorithm. It has realized functions such as inter-provincial tie line dispatch, intra-provincial multi-energy orderly dispatch, aggregated resource optimization dispatch, and electricity market forward-looking dispatch. It has been widely applied at the network level, provincial level, municipal level, and local grid level, fully releasing the flexibility of each link of source, grid, load, and storage, effectively enhancing the grid regulation capability and new energy consumption capability, and significantly improving the level of automation and intelligence in power dispatch.