Industry News, Market Trends

In The Next 5 Years, The Estimate Energy Storage Market Trend

Storage for solar system

In the following 5 years, the annual installed capacity of independent energy storage can reach an average of 7.2 GW!

With the proposal of the “Double carbon” target and related supporting policies, the installed scale of new energy power generation is growing rapidly, the demand for energy storage, especially for large-capacity independent energy storage, is increasing obviously, and the capacity of independent energy storage is expected to increase to 7.2 GW in the next 5 years. The “White Paper on Independent Energy Storage Business Model” was jointly produced by Shenzhen SmartPropel Energy System Co., Ltd, which focuses on clean energy power investment, and the technological alliance of the energy storage industry, this paper analyzes the status quo of the development of independent energy storage at home and abroad, surveys and summarizes the development modes of independent energy storage in typical regions, discusses the commercial mode of independent energy storage, and puts forward market mechanism and policy suggestions, and looks forward to the development trend of independent energy storage in the future, to provide decision-making advice and layout reference for investors to invest in independent energy storage projects.

The independent energy storage unit is large in scale, high in regulation efficiency, and can meet the demand of large-order regulation of the power grid, in the past two years the policy support and owners of the favor, have shown a rapid outbreak of the situation. By the end of 2021, the cumulative installed capacity of China’s stand-alone energy storage projects has reached 1,295 MW, up 195% over 2021. The cumulative installed capacity of electrochemical energy storage projects is 1,135 MW, accounting for 87.64% of the stand-alone energy storage market. The independent energy storage projects that have been put into operation are mainly distributed in 8 provinces, including Shandong, Hunan, Hebei, Qinghai, Gansu, Fujian, Jiangsu, and Henan, the cumulative installed capacity of Shandong, Hunan, and Jiangsu exceeded 100 MW.

From the perspective of the application scenario, the cumulative installed capacity of the grid-side independent energy storage projects is the largest, with 1120MW, accounting for 86.49% of the installed capacity of the independent energy storage projects, and the rest are the power side, with 175MW, accounting for 13.51% of the installed capacity.

In terms of technical distribution, the lithium-ion battery accounts for 100% of the total applications, especially in power-side projects, and 86.3% in the power-side lithium-ion batteries.

In the future, with the gradual improvement of electricity market rules, independent energy storage will fully reflect its commercial value and become the preferred option for energy storage investors. According to Zhongguancun’s energy storage industry technology alliance, 2021 newly installed independent energy storage capacity in the country accounts for more than 35 percent of the new energy storage market, and in the first half of 2022, China planned to build 45.3 gigawatt-hours (GWh) of independent energy storage capacity under construction, it accounts for over 80% of the new energy storage capacity planned/under construction. Zhongguancun’s energy storage industry technology alliance predicts that the average annual installed capacity of stand-alone energy storage will reach 7.2 GW in the next five years, indicating huge market development potential.

The income sources of independent energy storage mainly include capacity leasing income, spot market arbitrage income, ancillary services income, capacity compensation income, and other income. Among them, capacity leasing income and ancillary services income are the main sources of income. Although the spot electricity market is an important potential profit point of the independent energy storage power station, it is only in the trial operation of Shandong province at present. Due to the different power attributes such as grid structure, new energy penetration rate, and power load, the demand and urgency of energy storage value are different in different provinces, which results in great differences in policy support and emphasis, therefore, the independent energy storage business model of each province has a strong regional attribute, and the source of income is diversified. For example, the main income sources of independent energy storage in Hunan province are capacity leasing income and ancillary services income; The main income sources of independent energy storage in Shandong province are capacity lease income, spot market arbitrage, auxiliary service income, and capacity compensation income.

Energy Storage System

At present, the independent energy storage industry is still in its initial stage of development, and the maturity of its business model is restricted by many factors.

First, the lack of a capacity leasing landing mechanism, and capacity leasing income there is some uncertainty.

Second, the spot market is in the initial stage of construction, and most of the provinces have not yet been able to achieve arbitrage through the spot market.

Third, the new”Two rules” will be independent storage in the main auxiliary services market, but most of the provincial policies have yet to be put in place.

Fourth, the value of energy storage capacity is gradually reflected, but the rules reflecting the value of capacity need more in-depth exploration and practice.

Fifth, the income source is relatively unitary, and realizing the multiple values through the participation market is difficult. Sixth, the market information disclosure mechanism has not been established, and the transparency of market rules is low.

Solar Energy Storage

With the development of the power market, the independent energy storage business model will mature gradually. From the source of income, the future value of independent storage capacity and energy value will be fully reflected. From the perspective of the investors, the existing investors are mainly the owners of the new energy stations of the state-owned enterprises (Soes), which are driven by the policy of“Forced allocation” of new energy storage, in the future, investors in stand-alone plants will also be more diverse and are expected to expand from the current owners of new energy plants to power sales companies, load-side enterprises, and third-party investors. From the view of the source of funds, the market needs the support of financial institutions with the ability of cooperation between industry and finance in order to effectively solve the financing needs of independent energy storage projects at different stages.

In the future, with the joint efforts of the participants in each link of independent energy storage, independent energy storage policies and market mechanisms will be improved, investors will be more diversified, financial services will be more abundant, and business models will be more mature. The independent energy storage industry is expected to enjoy long-term healthy development, and then become our country’s new electric power system construction providing an important support function.