Trillions Of Energy Storage Market Ushers In Strong Policy Signal: 30 GW Installed Capacity In Five Years And Full Marketization In Ten Years

On July 23, the national development and Reform Commission and the State Energy Administration issued the guiding opinions on accelerating the development of new energy storage (hereinafter referred to as the Guiding Opinions), which proposed to realize the transformation of new energy storage from the initial stage of commercialization to large-scale development by 2025.

"Guidance" after the release of A-share "energy storage" concept stocks. By the end of the day, Kelu electronic trading limit, Nandu power, Penghui energy and other concept stocks rose more than 7%.

The so-called new energy storage is different from other types of pumped storage, mainly including electrochemical energy storage. According to the guidance, by 2025, the installed capacity of new energy storage in China will exceed 30GW.

According to the white paper 2021 on energy storage industry issued by Zhongguancun energy storage industry technology alliance, by the end of 2020, China has put into operation energy storage projects with a total installed capacity of 35.6gw. Among them, the cumulative installed capacity of pumped storage is the largest, which is 31.79gw; The cumulative installed capacity of electrochemical energy storage is about 3.27gw.

This means that in the next five years, China's new energy storage capacity will have at least eight times the growth space.

Liu Yong, Secretary General of energy storage application branch of China chemical and physical power industry association, said in an interview with 21st century economic reporter that the introduction of this programmatic document will effectively promote the market-oriented mechanism for the coordinated development of energy storage and power system, steadily improve the performance and quality of products, accelerate the pace of joint venture cooperation between enterprises, and further improve the efficiency of industrial resource allocation, The process of technological innovation and engineering demonstration application has been accelerated, and the core competitiveness of independent, controllable, safe and efficient industrial chain and supply chain system has been significantly enhanced.

New energy storage development meets "top level policy"

In October 2017, the National Energy Administration issued the guiding opinions on promoting the development of energy storage technology and industry, which set the tone for the transition of domestic energy storage industry from the initial stage of commercialization to large-scale development.

Under the influence of this "top-level policy" which is regarded as the development of the whole energy storage industry in the industry, the domestic energy storage industry has ushered in rapid development in the past three years. In 2020, the cumulative installed capacity of China's energy storage projects has accounted for 18.6% of the total global market, with a year-on-year increase of 9.8%.

The 21st century economic reporter noted that although pumped storage currently occupies an absolute proportion in the global energy storage structure. However, industry insiders generally believe that the biggest growth space of energy storage in the future is in the field of electrochemical energy storage.

Founder Securities pointed out that pumped storage is currently the most widely used energy storage power station, but the construction of water storage power station is subject to the geographical environment, and due to the low efficiency of pumped storage, with other energy storage technologies gradually mature, the growth rate of its new installed capacity slows down year by year. The agency estimates that by 2025, the accumulated energy storage scale of the global generation side, grid side and user side will exceed 205gw. And in the context of carbon neutral, energy storage policy support is strong, superimposed system cost reduction leads to economic performance, and the energy storage expectation increases with certainty.

Based on conservative and ideal scenarios, Zhongguancun energy storage industry technology alliance forecasts the scale and development trend of China's electrochemical energy storage market from 2021 to 2025. Among them, under the conservative scenario, the domestic electrochemical energy storage market will continue to maintain rapid development in 2021, with a cumulative installed capacity of 5.79gw“ During the fourteenth Five Year Plan period, the CAGR of domestic cumulative installed capacity of electrochemical energy storage is 57.4%, and the market will show a steady and rapid growth trend.

In fact, since April this year, the guidance has attracted wide attention from the industry.

According to the guiding opinions, by 2025, the innovation ability of new energy storage technology will be significantly improved, the independent and controllable level of core technology and equipment will be greatly improved, and great progress will be made in the aspects of low cost, high reliability and long service life, the standard system will be basically improved, the industrial system will be increasingly complete, and the market environment and business model will be basically mature. New energy storage plays a significant role in promoting the process of carbon peaking and carbon neutralization in the energy field.

It is worth mentioning that the guiding opinions clearly put forward that by 2030, new energy storage will be fully market-oriented. The new energy storage core technology and equipment are independent and controllable, technological innovation and industrial level are in the forefront of the world. The standard system, market mechanism and business model are mature and sound. They are deeply integrated with all aspects of the power system. The installed capacity basically meets the corresponding needs of the new power system. New energy storage has become one of the key supports for carbon peaking and carbon neutralization in the energy field.

In addition, the Guiding Opinions also put forward that it is necessary to strengthen planning guidance, encourage diversified development of energy storage, carry out special energy storage planning as a whole, vigorously promote the construction of energy storage projects at the power supply side, actively promote the rational distribution of energy storage at the power grid side, and actively support the diversified development of energy storage on the user side; We should promote technological progress, strengthen the energy storage industry system, enhance the ability of scientific and technological innovation, strengthen the integration of industry, University, research and application, accelerate the transformation of innovation achievements, and enhance the competitiveness of energy storage industry.

Business model still needs to be explored

Although the development of domestic energy storage industry is facing huge growth potential, in the short term, China's energy storage industry needs to further explore feasible business models.

"At present, most operators in the energy storage industry have not yet found a market mechanism and business model suitable for their own development. The power market institutions are lagging behind and lack of models. Technology manufacturers rely on advanced funds and integrators take risks." An energy storage industry analyst told the 21st century economic report that at present, most orders of domestic energy storage projects are driven by policies, and the mechanism of energy storage system participating in electricity price trading has not been straightened out.

Some domestic employees engaged in energy storage business development told the 21st century economic reporter that if the domestic energy storage industry wants to develop smoothly and sustainably, it needs to reform and promote the electricity price mechanism or dispatching rules.

The 21st century economic reporter has noticed that "improving the policy mechanism and creating a healthy market environment" has become an important part of the guiding opinions. First of all, it is clear that the energy storage power station will no longer exist as a subsidiary of thermal power and new energy.

The guiding opinions pointed out that the independent market status of new energy storage should be clarified. We will study and establish the access conditions, trading mechanisms and technical standards for energy storage to participate in medium and long-term trading, spot and ancillary services, and accelerate the entry of energy storage into various power markets and allow them to participate in all kinds of electricity markets at the same time. According to local conditions, we should establish and improve the "pay for results" compensation mechanism for power ancillary services, deepen the market mechanism of power auxiliary services, and encourage energy storage as an independent market entity to participate in the auxiliary service market. We should encourage exploration and construction of shared energy storage.

In the aspect of improving the new energy storage price mechanism, the guiding opinions put forward that it is necessary to establish the capacity price mechanism of independent energy storage power stations on the grid side, and gradually promote the energy storage stations to participate in the power market; The cost-benefit of alternative energy storage facilities in power grid should be included in the recovery of transmission and distribution price. Improve the peak valley price policy to create more space for the development of energy storage on the user side.

In fact, positive signals are being released. On May 25 this year, the national development and Reform Commission officially announced the notice on the action plan for deepening the reform of price mechanism during the period of the 14th five year plan. It is proposed that the reform of transmission and distribution electricity price will continue to be promoted, the structure of transmission and distribution electricity price will be straightened out, and the flexibility of electricity price mechanism will be improved. At the same time, the plan once again made it clear that the newly issued price mechanism of pumped storage should be implemented, and a new energy storage price mechanism should be established to promote the development of new energy and related energy storage industry.

Liu Yong believes that the development of China's energy storage industry in the next five and ten years, especially the cost advantage, scale advantage and performance advantage of energy storage technology will become more and more clear.

"At present, one of the core elements of commercialization of energy storage projects is still cost reduction." The aforementioned analysts told the 21st century economic reporter that in the past decade, the construction cost of domestic energy storage system is accelerating, which has significantly improved the economy of energy storage application scenarios.