CIES2024 | Release of "2024 New Energy Storage Typical Application and Development Trend Analysis Report"

China Energy Storage Network News: The 14th China International Energy Storage Conference and Exhibition, hosted by the China Chemical and Physical Power Industry Association, co-organized by the Energy Storage Application Branch of the China Chemical and Physical Power Industry Association and China Energy Storage Network, was grandly opened at the Hangzhou International Expo Center on March 10, 2024. The theme of the conference is "Co-building the Energy Storage Ecosystem and Creating New Development of Energy Storage".

The conference released major research results such as the "2024 China New Energy Storage Industry Development White Paper", "2024 China Shared Energy Storage Development Research Report", "2024 China Compressed Air Energy Storage Industry Development White Paper", and "2024 New Energy Storage Typical Application and Development Trend Analysis Report".

Among them, the "2024 New Energy Storage Typical Application and Development Trend Analysis Report" (hereinafter referred to as the "Report") was edited by the China Chemical and Physical Power Industry Association, compiled by the research team of the Energy Storage Application Branch of the China Chemical and Physical Power Industry Association, and provided academic support by the Expert Committee of the Energy Application Branch of the China Chemical and Physical Power Industry Association.

The report combs and analyzes the development trend of the new energy storage industry in 2023 from six aspects: industrial policy, standard formulation, market development trend, technology development dynamics, business model and market mechanism, summary and outlook.

The report points out that new energy storage is in the process of commercialization and large-scale development. The industry development is gradually shifting from policy-driven to market-driven. Energy storage technology is also constantly iterating and developing, and relevant mechanisms are constantly being established and improved.

In terms of policy, the report points out that the national and local government authorities have issued a number of important policies covering the power market, standard construction, industrial development, and technological innovation. China's new energy storage policy formulation shows a development trend in five aspects: establishing a diversified coordinated operation mechanism for energy storage, continuously improving the power market mechanism, and supporting the construction of a new power system.

In terms of standard formulation, the report expounds on the importance of establishing and improving the technical standard system of the entire energy storage industry chain, introduces the setting and framework of domestic and foreign standardization organizations, and points out that the new energy storage standard system is becoming more and more perfect this year, and the construction of the standard system has made significant progress. More than 40 national standards and industry standards have been officially released or implemented, and the standard system has been gradually established, especially the electrochemical energy storage standard system has been basically established. Some important standards have been revised, for example, the national standards for the three core energy storage equipment, lithium-ion batteries, energy storage converters, and battery management systems, have all been revised and released or implemented.

The report also provides an in-depth interpretation of eight important national standards or industry standards, including the national standard "Design Specifications for Electrochemical Energy Storage Power Stations", the national standard "Safety Regulations for Electrochemical Energy Storage Power Stations", and the national standard "Lithium-ion Batteries for Power Energy Storage".

In terms of the development trend of the new energy storage market, the report introduces the scale of China's energy storage market, pointing out that the scale of domestic new energy storage grid connection will explode in 2023, with an additional installed capacity of 22.6 million kW/48.7 million kWh in 2023, an increase of more than 260% year-on-year.

In addition, many places have accelerated the development of new energy storage, and 11 provinces (regions) have installed capacity exceeding one million kW.

The report states that during the 14th Five-Year Plan period, with the continued rapid advancement of wind power and photovoltaic projects, especially the construction of large new energy base projects in deserts, Gobi and desert areas, and with the gradual improvement of the power market mechanism, the improvement of profitability of energy storage on the new energy side and the grid side will promote the construction of new energy storage projects, and new energy storage on the new energy side and shared energy storage on the grid side will continue to grow rapidly.

The report points out that China's new energy storage application scenarios are becoming increasingly rich, mainly including conventional power supply side, new energy side, grid side and user side.

In 2023, the new energy storage in China, including the new energy side and the grid side, are the focus of current industry construction. By the end of 2023, the cumulative installed capacity of energy storage on the new energy side will account for 34%; the cumulative installed capacity of energy storage on the grid side will account for 57%; the cumulative installed capacity of energy storage on the conventional power supply side will account for 3%; and the cumulative installed capacity of energy storage on the user side will account for 6%.

The report focuses on analyzing typical application scenarios of new energy storage on the conventional power supply side, new energy side, grid side and user side.

As far as energy storage technology routes are concerned, the "Report" believes that the dominant position of lithium iron phosphate battery energy storage will remain unshakable in the short term. In addition to lithium iron phosphate battery energy storage, various technical routes are "blooming", especially compressed air, flywheel energy storage, supercapacity energy storage, flow battery and sodium ion battery energy storage are new energy storage types with high market popularity and good development prospects. In addition, new technologies such as gravity energy storage, liquid air energy storage, and carbon dioxide energy storage have also been implemented.

The "Report" focuses on the above-mentioned technical routes with high market popularity and their application projects.

The "Report" also analyzes the price changes of lithium iron phosphate batteries in 2023, pointing out that since 2023, the supply and demand relationship of raw materials and battery markets has changed dramatically, prices have fluctuated sharply, prices of raw materials such as battery-grade lithium carbonate, lithium hexafluorophosphate, and graphite have continued to fall, shipment growth has slowed down, production capacity is in excess, and battery prices have fallen sharply.

The report states that the prices of the main raw materials for lithium iron phosphate batteries are unlikely to change the situation of oversupply in a short period of time. However, as the prices of raw materials such as battery-grade lithium carbonate have approached the cost line, some companies have begun to reduce production and stop production. It is expected that the prices of main raw materials such as battery-grade lithium carbonate, artificial graphite, and lithium hexafluorophosphate will gradually stabilize in 2024.

The report also analyzes the price changes and trends of the main materials of lithium iron phosphate batteries, including positive electrode materials, negative electrode materials, electrolytes, diaphragms, copper foil, and aluminum foil.

The report emphasizes that with the sharp decline in the price of battery-based energy storage equipment, the equipment cost and EPC cost of energy storage systems have decreased month-on-month.

By the end of 2023, taking the 2h charge and discharge energy storage system as an example, the price of centralized topology energy storage systems is mainly distributed in the range of 0.73-0.8 yuan/Wh, compared with the winning price of energy storage systems at the end of 2022 of 1.35-1.69 yuan/Wh, a year-on-year decrease of more than 45%. The unit price of centralized energy storage equipment with a duration of 1h, 2h, and 4h is around 0.95 yuan/Wh, 0.73 yuan/Wh, and 0.62 yuan/Wh. As the energy storage track becomes increasingly crowded, overcapacity, and homogeneity becomes increasingly serious, industry competition has become increasingly fierce under the background of low-price bidding. With the improvement of battery cells and integration technology, the decline in battery prices, and the involution of the industry, it is expected that energy storage equipment will still hover at a low level.

With the rapid decline in the price of energy storage equipment, the price of EPC general contracting has also dropped significantly. Taking the current typical 100MW/200MWh independent energy storage (excluding booster stations) as an example, the EPC winning bid price at the end of 2023 is around 1.05 yuan/Wh, which is about 25% lower than the price of around 1.4 yuan/Wh at the end of 2022.

In terms of typical grid-connected projects, the report points out that this year, new energy storage projects have been implemented faster, the installed capacity has continued to increase rapidly, the grid-connected projects cover various application scenarios, and the number of large-scale energy storage power stations has increased rapidly. By the end of 2023, more than 100 new energy storage projects with a capacity of 100 megawatts or more will be added, mainly concentrated on the new energy side and the grid side. In addition, several electrochemical energy storage power stations with a single unit scale exceeding GWh are gradually carrying out preliminary work, and some projects have started.

The report also lists 118 typical new energy storage projects put into operation in 2023 on the thermal power side, new energy side, grid side, and user side.

Regarding the development of new energy storage technologies, the report points out that industry leaders have introduced a number of new technologies, such as large-capacity battery cells, high-temperature resistant batteries, 5MWh+ integrated devices, BMS with cloud-edge collaboration and PACK-level gas linkage functions, immersion liquid cooling technology, large-capacity cascade energy storage and other new technologies, which reduce the full life cycle cost of energy storage systems, improve the reliability and intrinsic safety level of energy storage, and achieve friendly interaction and efficient support with the power grid.

The report also sets up a special chapter to introduce in detail the business models and market mechanisms of conventional power supply side, new energy storage, grid-side energy storage, and user-side energy storage.

In view of the continuous decline in the prices of upstream battery raw materials and downstream energy storage equipment, fierce competition in the industrial chain, serious homogeneity, and the looming crisis of reshuffle, the industrial chain shows uneven hot and cold, hot outside and cold inside.

In the last part of the report, a number of suggestions are proposed, including calmly carrying out the layout of the energy storage industry in the long term, improving the market mechanism that adapts to the participation of energy storage, establishing a diversified and long-term development mechanism for energy storage, carrying out energy storage planning and layout according to local conditions, and strengthening the summary of the entire process of the entire life cycle of energy storage.

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