Behind The Development of Energy Storage: Batteries Will Be The World's Biggest Pollution in The Future

Energy storage industry overview

At present, pump storage still accounts for more than 90%, while electrochemical storage has developed rapidly, from less than 1% in 2015 to more than 10% in 2021. In the next two years, the United States, China, and Europe are the major markets dominated by the installed capacity of new energy vehicles.

By the end of 2021, the cumulative installed capacity of energy storage projects in operation and power generation in China was 46.1 GW, accounting for 22% of the world's total installed capacity, an increase of 30% over the same period last year.

In recent years, the new energy storage market has developed most rapidly. New energy storage includes electrochemical energy storage, compressed air energy storage, flywheel energy storage, etc., of which the total installed capacity of electrochemical energy storage has reached 5117.1MW, accounting for more than 11%; In 2021, 1847.9 MW of new power capacity will be added, accounting for 24.9% of the total installed capacity

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General overview of electrochemical energy storage industry in China

Since 2018, the domestic energy storage industry has shown an explosive development trend. The total installed capacity is expected to reach 4 gigawatts in 2021-2025, at 5.12 GW (5117.1 MW).

As mentioned earlier, the United States, China, and Europe have occupied the top three positions in new electrochemical storage devices in recent years. The United States has 6,361.7 megawatts of storage in 2021, while China has 5117.1 megawatts of storage. However, compared with downstream applications worldwide, the proportion of domestic energy storage and industrial and commercial energy storage in China is obviously very low, and the market is still to be developed.

In the investment cost of electrochemical energy storage systems, battery packs account for about 66%, energy storage converters (PCS) account for about 12%, and battery management systems (BMS) and energy management systems (EMS) combined account for about 12%. These are also some of the market components that will be highlighted below.

From the point of view of unit energy consumption, the battery accounts for a large proportion of the entire electrochemical energy storage system, coupled with the composition of the cell, about 8% of the cost. Lithium battery is one of the most competitive energy storage systems at present, and its price has become the main factor restricting its development.

The integration of energy storage system refers to the selection of energy storage technology and products suitable for the user according to the needs of the user, the various unit plates in the system are organically combined, and a "one-stop" solution is built for various scenarios, so as to optimize the overall performance of the energy storage power station.

At present, the domestic industrial concentration is not high, the industrial concentration of 3 and 5 percentage points are 43% and 56%, respectively. From a worldwide perspective, independent energy storage system integrators (third parties) have formed a complete system, and in our country, mainly by the energy storage industry's various plates of the leading integration extension of the system integration, occupy a dominant position. Battery manufacturers, PCS manufacturers are laying out the market for energy storage system integration. Jiangsu Duoyi Energy Co., LTD., HiBOsi Innovation Co., LTD., Singularity Energy Co., LTD., is a group of system integration, with self-developed core equipment and external procurement of parts as the main content of the third party integrators.

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Market overview of various sectors of electrochemical energy storage industry

In 2021, the demand for energy storage in the Chinese market is 48 GWh, an increase of 167% over the same period last year; In 2022, the installed capacity is expected to exceed 90 GWh, an increase of 88% over the same period last year; In 2025, it will exceed 324 GWh, an increase of 88% over the same period last year. At the same time, new installed capacity will also rise steadily.

Lithium batteries are the leader in energy storage batteries, accounting for 89.7% of the market share. However, in terms of the application scenario of the lithium battery itself, energy storage only accounts for 6.4%, and compared with applications such as new energy vehicle batteries, energy storage batteries have more stringent requirements in terms of safety requirements and thermal management systems.

Mass storage devices are the most common storage device, accounting for 61% of shipments. At present, the application market of household and portable energy storage products is very small in China, and it is mainly exported to foreign countries.

In terms of region, the domestic energy storage battery manufacturing enterprises are mainly in Guangdong and Jiangsu and Zhejiang provinces. The market share of the Ningde era still maintains an advantage of nearly 30%, followed by BYD and Yiwei Lithium Energy.

Most of the industry's leading companies are aggressively expanding abroad. In addition to Ningde Group, BYD Group and Guoxuan High-tech Group, the main customers of Pineng Technology are foreign energy storage equipment suppliers, and Sonnen Group, the largest energy storage equipment supplier in Europe, and Segen Group, the largest solar cell supplier in the United Kingdom, have a good cooperative relationship. It's also one of the top three companies in the world.

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Problems existing in electrochemical energy storage industry in China

Although the development of the energy storage industry is generally good, and has attracted widespread attention. However, here, we still want to raise the following risks and questions for readers' reference.

From the perspective of safety, at present, in the construction and operation of power plants, there is a lack of systematic norms and clear standards, and the risk coefficient of electrochemical energy storage is also very high, according to incomplete statistics, in 2021, there have been 9 energy storage safety accidents in the world. From the perspective of market maturity, the current energy storage industry has not yet formed a complete market mechanism, nor does it have a clear business model and management standards. In terms of enterprise costs, because the cost of raw materials has been high, there is the problem of low price competition of products, and there is also the pressure of labor costs, electricity costs, etc., therefore, various places have introduced the policy of subsidies for the development of energy storage, but this can not solve the problem from a long-term perspective.

Looking at the entire industry chain, due to the shortage of batteries, some companies have stopped issuing orders, and many companies have even postponed orders to next year. The traditional BMS standard is not uniform enough, resulting in the difficulty and cost of reuse and transfer. In the PCS market, there is a situation of price competition.

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The first major pollution in the future is lithium iron phosphate batteries

Four years later, it was a battery catastrophe, the entire battery of China added up, enough for us to fly to Mars, and now, everyone knows that the battery is a what a great thing, can let us in the next three days, in Shenzhen, in BYD, in Fujian, in Ningde era, is what a great thing. This is why the Ningde era is called "King of Ning", but we all understand that when demand exceeds supply, production capacity will increase, every city in China with a GDP of more than 500 billion, will invest a lot of resources to produce batteries, many countries will invest billions of funds to invest in battery factories, four years later, the battery crisis will come. And when the supply exceeds the demand, there will be a fierce competition, so a good company, can survive this stage, depends on the Ningde era.

For example, there is a company in Shenzhen called Watma, before 2020 has been bankrupt, the company is China's largest lithium iron phosphate battery manufacturer, the company's name is called Colorado, but at the peak of more than three billion, and later was eliminated, why, he was too early, his judgment is correct, his judgment is correct. But since BYD left, they've been expanding capacity like crazy, but their production is no longer enough to meet their needs, so they're thinking about how to keep capacity down, and then they start making cars, and they can't sell cars, so they buy their own cars, and they can't sell their own cars, so, They bought their own cars, and then, their cars were down, and the Ningde era was only one-tenth the size of the Watma, but their victory made them move faster. So...

"Now most of the cars can not be mass-produced, so only the Ningde era can supply, Tesla does not have such a large supplier, so only the Ningde era can supply, BYD and Xiwanda have no way to supply, the Ningde era soon responded, one trillion Ningde era supply, however, the Ningde era is not stupid, Zeng Yiqun, the boss of Ningde era, is a very powerful person, and I think he should be a very good gambling person, so I think he should be a very powerful person." My profit today is 20 percent, tomorrow's profit is 15 percent. Hong Quan said: "Now you are asking me, but ten years later I still ask you, how about we settle down and make a long-term deal?" The next manufacturer of new energy vehicles, I will negotiate with them like this, to establish a new production base. I sell lines. I sell batteries.

The price is soaring, no matter how much money I make, we each half, no matter how fierce the market competition tomorrow, dude, you can't betray me, you can't say what battery overcapacity at that time, to shop around, and then you play with others, because at this point in time, I accompany you. When you grow up, when you become the hegemon of new energy vehicles, you should also make good use of our joint venture factory. Can you understand, put a short-term business, elongate, so in your business dimension, have not done time business, if you do not do a time business, your enterprise value is difficult to release, your era he locked long-term cooperation, he knows that there is a cycle, there is a medium, rather than now crazy to die, this is called the rhythm of the cycle.

Most entrepreneurs in China, when doing business, are not their own rhythm, when they should not expand, they are trying to expand, but when they do not master their own rhythm, they will feel very uncomfortable. So, the so-called cycle is actually a rhythm, so when you find a company that will not keep up with the cycle, will not rise, then even if they have a trend, they will not have much development, on the contrary, when they take a wrong step, they will have an opportunity.

In the short term, there is little chance of that. Didn't you say that new energy is very profitable? Didn't you say that cloud computing is very profitable? Didn't you say the energy storage business was profitable? You said this window was valuable. Do you dare go in there? Guys, we can't go in there yet. It's seven years, and if we go in there, we're gonna have to clean up the mess. You only want to ask one question today, and that is seven years from now, what is the real trend, what is the real trend. In particular, there are many companies engaged in foreign trade, and they are thinking every day about what they can sell this year. I found that many entrepreneurs engaged in foreign trade, their short-term thinking is obvious, their short-term thinking, just like in the stock market, they are thinking every day, what will rise tomorrow, if you have this kind of short-term thinking, you will find that they can do nothing.

Therefore, as an entrepreneur, he must have a clear understanding of the future, he must learn to find out a direction of development in his own industry, if five years later, he can see what the direction of development, then he starts to layout now, and wait five years later, he can see is his opportunity. You have to see the future trend, but also to deconstruct it, any good company, must meet this.

To see the situation is to let the team have rhythm, enter the game, speed up the pace, stop the pace, consider whether to cooperate with, whether to quit the game, rhythm is very important. Third, the big picture determines the big picture. What is the big picture? You are not a dominant force, there are thousands of forces in a large industry, you must find your own entry point in many forces, and find your own opportunities in both aspects of demand and demand, in order to make yourself have greater value in this industry. These three forces are whether a company can take advantage of these three forces and soar to the sky.