With demand booming, battery storage could be the future

The rapid growth of the industry is inseparable from the traction of market demand.

For the energy storage markets in Europe and the United States, the economic demands brought about by rising electricity costs and the self-sufficiency needs brought about by poor power supply stability not only promote the large-scale application of the photovoltaic industry but also drive the rapid development of household energy storage. However, for domestic consumers, except in a few remote areas, people can enjoy a stable, reasonably priced, even segmented electricity supply, so the demand for residential PV and energy storage systems is growing relatively slowly.

However, for enterprise users, reasonable use of TOU advantage of a clean energy power system can achieve the purpose of "peak cutting and valley filling" to reduce electricity costs, especially in summer and winter power supply tight areas, local enterprises can be more flexible to cope with the impact of "power limit" on production and operation. The so-called "peak cutting and valley filling" is a mode of "price arbitrage" based on the time-of-use tariff mechanism, which charges the energy storage system at the trough of the price and discharges at the peak of the price.

Different application scenarios also determine the differentiation of technology, that is, the different ways of energy storage. According to the technology path classification, energy storage system is mainly divided into chemical energy storage and physical energy storage. Among them, chemical energy storage "consumes" electric energy and stores it by converting electric energy into chemical energy. The mainstream technology paths include battery energy storage and hydrogen energy storage. Physical energy storage mainly includes flywheel energy storage, pumped storage, etc. The working principle of flywheel energy storage is that under the condition of abundant electric power, the electric energy drives the flywheel to rotate at high speed, and the electric energy is converted into mechanical energy storage, but the energy storage time is short. Pumped storage uses electricity to pump water to higher ground, converting electricity into gravitational potential energy storage.

Today, battery storage has a clear "position" in the market and is the darling of capital, but pumped storage has a lower cost of kilowatt-hour and a higher share of the market. According to China Merchants Bank, the accumulated installed capacity of energy storage projects has reached 35.6GW by 2020, among which pumped storage energy dominates at 31.79GW. Among the new energy storage, the scale of electrochemical energy storage ranks second, with 3.3GW. Among the electrochemical energy storage technology, lithium ion battery is the largest, with a cumulative scale of 2.9GW. In terms of cost, according to the calculation of Yingda Securities, the kWh cost of pumped storage is about 0.23-0.34 yuan /kWh, and the battery energy storage is about 0.67 yuan/KWH (in the future, sodium battery/vanadium battery is expected to drop to 0.27/0.44 yuan at the lowest level).

So why is battery storage so popular? It is necessary to comprehensively consider the popularization of energy storage and large-scale construction after the initial application of photovoltaics. On the one hand, limited by the energy storage environment, pumped storage can hardly meet the increasing demand for energy storage. On the other hand, pumped storage is mainly used for capacity energy storage, and there is a lack of power energy storage, while battery energy storage can be taken into account. Specifically, from the perspective of initial investment cost, the construction of a pumped storage power station can cost hundreds of millions or even billions, while the scale of battery energy storage can be flexibly arranged according to the demand. In addition, there are relatively complete battery supply chains in the market at present, and enterprises among them have also entered into the energy storage circuit, further promoting the rise of battery energy storage.

At present, "low-carbon" can be said to be one of the few development directions that the world can reach a consensus on. The mining and utilization of clean energy is more like a self-rescue of mankind. At present, photovoltaic, as a more stable and easily accessible clean energy, has become the main force for the replacement of global energy structure, and its supporting energy storage system is the key to determine whether the photovoltaic industry can be scaled and implemented in multiple industries. Facing the differentiated demand at home and abroad, Chinese enterprises are also exploring and polishing more efficient and low-cost solutions, which will undoubtedly become another big opportunity for China to export.