Zhitong Consulting Chen Jingwen Talks on "Electrochemical Energy Storage": Integration Will Become a Potential Trend in the Industry

Global Network Technology Reporter Zheng XiangqiCurrently, under the "dual carbon" goal, the renewable energy industry is pressing the "acceleration key" for development. As a key technology supporting the development of renewable energy, energy storage has also entered a new stage of leapfrog development

Global Network Technology Reporter Zheng XiangqiCurrently, under the "dual carbon" goal, the renewable energy industry is pressing the "acceleration key" for development. As a key technology supporting the development of renewable energy, energy storage has also entered a new stage of leapfrog development. According to data from the National Energy Administration, in the first half of 2023, the installed capacity of new energy storage in China was approximately 8.63 million kilowatts/17.72 million kilowatt hours, equivalent to the total cumulative installed capacity in previous years.

At present, common energy storage technologies include physical energy storage (mainly pumped storage), new energy storage (mainly electrochemical energy storage), hydrogen energy storage, and so on. Among them, electrochemical energy storage is under the spotlight.

The report "Insight into the Electrochemical Energy Storage Industry" recently released by Zhitong Consulting shows that electrochemical energy storage is increasingly favored by the market due to its high energy density, high working voltage, long cycle life, fast charging speed, and high discharge power, which are not affected by natural conditions. It can compensate for the randomness and intermittency of wind and solar energy, improve the flexibility and economy of the power system, and is more and more favored by the market.

Electrochemical energy storage has broad market potential

According to Chen Jingwen, a leading partner in the information technology industry and co managing partner in transaction support services at Zhitong Consulting TMT, electrochemical energy storage has a broad market space. In the top-level design dimension, in order to promote the development of the energy storage industry, a series of supportive policies have come one after another. In addition, China has a unique advantage in carrying out electrochemical energy storage. The rapid development of the power battery field has provided a solid technology, production capacity, and brand foundation for electrochemical energy storage.

Based on the strong market potential in the field of electrochemical energy storage, many companies have recently increased their layout on this track. The first "zero carbon factory" focused on energy storage batteries in Ningde Era was born, BYD's global research and development center and energy storage industrial park project began construction, and Tesla's first overseas energy storage super factory landed in China

Chinese electrochemical energy storage related manufacturers have strong competitiveness in the international market in terms of technical level, project experience, and market share, and are considered leading globally in their development stage. Chen Jingwen stated that the advantages of China's electrochemical energy storage supply chain are mainly reflected in two aspects: battery packs and energy storage system integrators. These suppliers not only maintain strong competitiveness in the domestic market, It also occupies a dominant position in overseas markets.

For example, in the field of battery packs, both Ningde Times and BYD have become the world's leading suppliers of energy storage battery packs. According to SNER Research, the global market share of Ningde Times' energy storage battery shipments in 2022 reached 43.4%.

According to Chen Jingwen, China's electrochemical energy storage industry has formed a complete industrial chain. From upstream materials (mainly battery core raw materials), midstream core components (battery packs, battery management systems, energy storage converters, etc.), to downstream applications, there is a complete layout, and in each segmented field, enterprises with core competitiveness have emerged internationally.

Focusing on downstream applications, the current main scenarios for electrochemical energy storage include the power generation side, transmission and distribution side, and user side. According to the 2023 statistics of the Energy Storage Special Committee of the China Energy Research Association on the installed scale of new energy storage projects in China, electrochemical energy storage is mainly on the power generation side (accounting for 48%) and the transmission and distribution side (accounting for 45%), and the user side is still in its infancy.

Energy storage manufacturers need to overcome cost control challenges

Looking ahead, Chen Jingwen believes that large-scale energy storage (large-scale energy storage on the power generation and grid sides) will still be the main application scenario for electrochemical energy storage. However, with the development of distributed energy sources (such as distributed photovoltaic power plants), the demand for user side energy storage, especially household energy storage systems, will increase. Secondly, in terms of technological route, lithium batteries are still mainstream, but the application of non lithium energy storage and hybrid technologies will gradually increase.

In addition, Chen Jingwen told reporters that the integration of the electrochemical energy storage field is a potential trend for future development. Upstream lithium battery companies may enhance their ability to independently research and develop energy storage equipment in the future, directly reaching downstream customers, bringing significant competitive risks to pure energy storage integrators. In fact, in recent years, system integrators have emerged as the midstream end link of the energy storage industry chain, with equipment providers as the upper link and energy storage system owners as the lower link. In the current mode, upstream device providers are unable to directly reach downstream customers and have access to first-hand customer resources.

The 'full stack self research' capability of energy storage enterprises means that the main components of energy storage systems such as battery cells, BMS, PCS, EMS, etc. are all developed and produced by themselves, which can maintain the consistency of component design, improve safety and efficiency, and reduce costs. Therefore, in the future, with the accumulation of customer resources, the advancement of research and development in various aspects of energy storage and component technology, equipment providers, especially lithium battery providers, It is possible to bypass the system integrator and directly engage in business with downstream customers, as a pure energy storage integrator poses significant competitive risks.

When it comes to the challenges that electrochemical energy storage manufacturers may face, Chen Jingwen candidly stated that cost control is a major challenge faced by energy storage enterprises, especially the first batch of entrants in the industry. Specifically, cost control includes two aspects: on the one hand, the financial pressure brought by large-scale capital investment in the early stage, and on the other hand, the pressure to reduce production costs in the early stage. For capital investment, similar to power batteries and photovoltaic cells, the production of energy storage batteries needs to be matched with large-scale equipment, infrastructure, etc. Therefore, a large amount of capital investment is required. Continuous financial support is an important issue that energy storage enterprises need to solve.

In terms of production costs, Chen Jingwen stated that, The power industry is a cost sensitive industry, and the cost of configuring and using energy storage equipment in the large-scale application of the power system is lower than the benefits it can bring to power enterprises. Therefore, being meticulous in the production cost of energy storage batteries is an important way for energy storage production enterprises to enhance their competitiveness. Especially in the early stage of industry development, the technical route is not yet mature, and early entrants need to invest in large amounts of research and development to clarify the technology Technological route, reducing production costs

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