In 2024, new energy storage was written into the "Government Work Report" for the first time, which the industry regarded as a major positive news. Over the past year, the domestic new energy storage industry has been "hot and competitive." Driven by policies and industry development, the industry supply has grown explosively, with the number of energy storage companies established in one year exceeding the total number of the previous two years, and the newly added installation scale is more than twice that of 2022.
Crowded tracks and cost reduction have also led to overcapacity and a halving of energy storage prices. Chen Xiang, President of EVE Energy Storage, introduced in public that due to overcapacity of lithium carbonate, the price has fallen from a high of 568,000 yuan/ton to nearly 100,000 yuan/ton; the price of power cells and energy storage systems, which are greatly affected by upstream materials, fell by 58.4% and 40.1% respectively from January 2023 to February 2024. In 2024, the enthusiasm for new energy storage remains unabated, and many practitioners also frankly said it "will be more competitive." Some leaders of leading enterprises said that the new energy storage industry is accelerating the reshuffling, and the market will pay more attention to the actual value of energy storage. The author believes that this requires investors to have a clearer understanding of the positioning of new energy storage in the power system.
Previously, some people believed that in the process of large-scale new energy consumption, new energy storage has not played a role, which is equivalent to "using a few mineral water barrels to hold water from the Yangtze River." However, some practitioners believe that the value of new energy storage does not lie in the proportion of its charging and discharging capacity to the total power generation and consumption, but lies in its ability to provide short-term and efficient regulation when the power supply and demand are out of balance, ensuring the safety of the power grid. At the same time, as a regulatory resource, new energy storage has "competitors" such as coal power, gas power, and pumped storage, and new energy storage still does not have a price advantage. Not exaggerating value and acknowledging substitutability is another aspect of a rational view of the development of new energy storage.
"It has become a consensus that the development of new energy storage cannot be separated from a profitable model under specific application scenarios, but the difficulty of cost recovery is still a major problem in the development of the industry. At present, many places temporarily lack a clear basis for energy storage calls. Some experts have proposed that due to its dual attributes of source and load, new energy storage cannot simply use the current electricity price policy and related price formation mechanism. At the same time, participating in the electricity energy and ancillary services market is a clearer profit channel for new energy storage in the future, but the current power market mechanisms and transaction varieties in many places still cannot accurately and comprehensively reflect the multiple values of new energy storage.
Solving the cost guidance problem of energy storage requires a process, and the industry has both opportunities and challenges. China has a vast territory and a more diverse energy development form, and different regions have different types and scale requirements for new energy storage. In recent years, support policies with regional characteristics for different types of energy storage have been introduced intensively. The energy storage industry should seize favorable conditions, fully explore development space in various sub-markets, and gradually explore and improve profit models in practice.
Some practitioners have revealed to the author that the current attitude of enterprises towards supporting policies is more rational. While using them as investment references, they will pay more attention to the actual implementation and stability of policy execution. Jiang Xinyu, Chairman of Zhiguang Energy Storage, also put forward in public that energy storage is a long-term investment, and it is necessary to be vigilant about the impact of the conversion between short-term policy incentives and long-term market competition on investment.
AUTHOR: Southern Energy Observe
LINK: https://mp.weixin.qq.com/s/RjJ_WXMF94QSCzoTJTHkNQ