The prosperity of large storage at home and abroad continues to rise, mainly due to the impact of factors such as policy support, cost reduction, new energy regulation demand and power grid construction demand. Overseas, the United States IRA Act supports the construction of energy storage projects through subsidies, therefore the cost of the large storage system has also fallen from US$150/MWh to less than US$100/MWh now. At the same time, the outdated power grids of developed countries and the large demand for power grid construction in Asian, African and Latin American countries have also increased the demand for energy storage. Coupled with the decline in the cost of funds brought about by the Fed's interest rate cut expectations, the overseas large storage market has maintained a high degree of prosperity. In China, Inner Mongolia has also recently issued policies to support the construction of new energy storage, actively promote the development of energy storage on the power supply side and grid side, and develop grid-based energy storage. The large-scale installation of new energy in China has also brought a clear demand for energy storage. The promotion of electricity market-oriented reform has also created space for the development of energy storage. According to the bidding price data of Polaris energy storage network, the current price of domestic energy storage system is less than 0.5 yuan/Wh. Under multiple favorable factors, the domestic large storage capacity is expected to exceed expectations.
The United States energy storage market is developing rapidly with the support of policies. Lawrence Berkeley National Laboratory data shows that as of 1H2024, the energy storage grid-connected queue reached 1028GW, according to which we estimate that the queue project volume will release 61GW/183GWh of new installed capacity from 2024 to 2028. WoodMackenzie predicts that the total installed capacity of United States energy storage from 2024 to 2028 will be 276GWh, corresponding to a CAGR of 59%, of which about 90% is pre-meter energy storage. LCP Delta expects 27GW/68GW of new energy storage in Europe from 2024 to 2025/2028, corresponding to a CAGR of 51%/33%, of which more than 65% is pre-meter storage. The construction of power grids in some areas of emerging economies is relatively lagging behind, and the frequency of power security incidents is high. Energy storage supports and expands the power grid, and solves the off-grid demand in high-risk power outage scenarios, and has a wide range of application prospects in emerging markets with weak power infrastructure. The global PV installed capacity has driven the release of energy storage demand, and emerging markets outside the mainstream market have also shined. Brazil's hydropower dominates the hidden danger of power shortage, and policies support the development of photovoltaic storage while Southeast Asia's power infrastructure is weak, and the growth of traditional energy sources is limited. In the context of wind and solar parity, new energy has become an important support for the future power of Southeast Asia. The increase in the penetration rate of new energy and the superposition of off-grid scenarios will release Africa's energy storage demand. Recently, Tesla and Intersect Power, a new energy company in United States, announced the signing of a 15.3GWh contract for Tesla's battery energy storage system Megapack, wtih the worth more than $3 billion. Sungrow signed a contract for an energy storage project in Saudi Arabia with a capacity of up to 7.8GWh, and the leader's orders and shipment performance exceeded expectations, reflecting the strong demand for overseas large storage.
According to energy storage and power market data, in the first half of 2024, the actual bidding scale of energy storage systems will be 29.7GW/68.4GWh, a year-on-year increase of 94%, and sufficient projects have been reserved for subsequent demand. In the first half of 2024, a total of 486 projects in China's energy storage market will be connected to the grid, with a total scale of 14.45GW/35.15GWh, a year-on-year increase of 125%, of which 7.2GW/15.5GWh will be connected to the grid in June. This new scale is already equivalent to nearly 71% of the grid-connected scale for the whole year of 2023, and we expect the new grid-connected scale to exceed 85GWh for the whole year. The increase in new tenders and installed capacity is not only due to actual demand such as large-scale new energy installations and policy support, but also from the improvement of business models, the reduction of costs, and the promotion of electricity market-oriented reform. With the construction of the wind and solar base, it is expected that the domestic large reserves will also achieve a high installed growth rate.
