The global energy storage industry is showing a vigorous development trend

The pillars of the Third Industrial Revolution included five aspects: renewable energy, distributed generation, energy storage technology, electric vehicles, and the energy internet. Jeremy Rifkin, President of the Washington D.C. Economic Trends Foundation, proposed the concept of the Third Industrial Revolution for the first time in his book "The Third Industrial Revolution".
Energy storage, as one of the pillars of the Third Industrial Revolution, has gradually become a choice for the future development of the global power industry.
Foreign Policies to Promote the Commercialization of Electric Energy Storage
Looking around the world, major countries have made the development of energy storage industry their national strategy, and the international market continues to compete for the strategic commanding heights of energy storage manufacturing industry. In the era of global economic downturn, the energy storage industry stands out and flourishes, standing above the wind.
According to incomplete statistics from the Global Energy Storage Project Database of the Energy Storage Special Committee of the China Energy Research Association, as of the end of 2021, the cumulative installed capacity of power storage projects that have been put into operation worldwide is 209.4GW, a year-on-year increase of 9%. Among them, the cumulative installed capacity of pumped storage energy accounted for less than 90% for the first time, a decrease of 4.1 percentage points compared to the same period last year; The cumulative installed capacity of new energy storage followed closely, reaching 25.4GW, with a year-on-year increase of 67.7%. Among them, lithium-ion batteries dominate, with a market share of over 90%.
The underlying logic behind this is the blessing of favorable policies. Looking at the world's leading countries in the energy storage industry, none of them have benefited from the establishment of effective energy storage industry support policies and an electricity institutional environment conducive to energy storage participating in the market and achieving value returns.
The reporter found through extensive analysis that North America mainly encourages the development of distributed energy storage through policies and subsidies; The deployment of energy storage in major European countries has become saturated, with a policy focus on guiding new demand; The scattered deployment of energy storage in major Asian countries is the main focus, and policies and subsidies focus on household and transportation energy storage.
The rapid development and application of energy storage technology in the United States are closely related to government policy support. The achievements of the US energy storage industry inevitably require policy traceability. In 2006, the federal government proposed the ITC (Federal Investment Tax Credit) policy to encourage users to install renewable energy power generation systems. At present, this policy has been extended to hybrid projects of new energy and energy storage, which can offset 30% of the initial investment amount, greatly promoting the growth of energy storage supporting facilities.
In 2018, FERC passed Act 841. The bill clearly states that battery energy storage can participate as an independent entity in the electricity auxiliary services and wholesale market, removing obstacles to energy storage entering the capacity, energy, and auxiliary service markets, and establishing a profit model for battery energy storage. The United States has ushered in a wave of energy storage installation.
In December 2020, the US Department of Energy (DOE) released a "Roadmap for Energy Storage Challenges" report, further enhancing the strategic position of energy storage development. By promoting the development of the United States in the field of energy storage through the "Three Major Issues" and "Five Paths", we aim to create a complete energy storage industry chain that combines research and development with industry, with the goal of end use. Ultimately, we aim to build and maintain the global position of the United States in the field of energy storage technology, and achieve the goal of domestically manufactured energy storage technology that can meet all market demands in the United States by 2030, And achieve the ultimate goal of "local innovation, local manufacturing, and global deployment".
The report focuses on exploring three different technological directions in the field of energy storage, including bidirectional electric energy storage technology, chemical and thermal energy storage technology, flexible power sources, and controllable loads. Among them, the bidirectional electric energy storage technology focuses on exploring and analyzing lithium-ion batteries, sodium based (containing sodium ions and sodium based metal batteries) secondary batteries, lead-acid batteries, zinc based secondary batteries, and other metal (magnesium, aluminum) system batteries Electrochemical energy storage technologies, including liquid flow batteries, rechargeable fuel cells, electrochemical capacitors, as well as mechanical energy storage technologies such as pumped storage, compressed air, liquid air, and gravity energy storage.
In December 2020, the United States Congress passed the Better Energy Storage Technology (BEST) Act, which will provide $1 billion in funding support for the federal government's innovative investment in energy storage technology research, development, and demonstration over the next five years. The bill establishes a new competitive funding plan for states, utility companies, and energy storage enterprises to deploy energy storage in different application scenarios.
In January 2021, the US Department of Energy announced a funding of $47 million to support transformative energy technologies, including energy storage. We will support potentially disruptive new technologies in the entire energy sector, accelerate the transformation of energy innovation technologies from laboratory to commercial, including new electric vehicle power batteries, data center efficiency, grid modernization, emission reduction, and further development of energy storage.
In March 2021, the US Department of Energy announced that the Northwest Pacific National Laboratory (PNNL) will begin designing and constructing a $75 million Grid Storage Launchpad that will promote clean energy use and accelerate the development and deployment of low-cost long-term grid level energy storage projects.
It is not difficult to find that the policies related to energy storage in the United States have the characteristics of comprehensiveness and sustainable development. At the same time, in terms of funding subsidies, tax exemptions, and clear independent subject status, the continuously introduced favorable policies undoubtedly stimulate the positivity of the US energy storage market to varying degrees, promoting its rapid development.
The reporter noticed that Japan has not introduced policies specifically targeting the energy storage industry, but supports the development of local battery energy storage enterprises through funding major projects. In terms of funding, Japan is committed to providing direct funding for the research and development of energy storage technology and providing cost subsidies for the promotion of energy storage technology. For example, the Ministry of Economy and Industry (METI) of Japan has invested approximately $98.3 million in a budget, providing 66% cost subsidies for households and businesses installing lithium electronic batteries. As of 2020, the cumulative domestic investment in Japan reached 5 trillion yen.
Taking sodium sulfur batteries as an example, the Japanese government not only provides free financial support in the early research and development stage, providing more than 50% of the funds from various aspects such as technology, market, and demonstration projects, but also continues to provide subsidies after they are put into commercial operation. The sustained subsidy policies in Japan not only promote the rapid maturity and application of battery technology, enhance the disaster recovery capacity of power users, but also drive Japanese lithium-ion battery manufacturers to quickly enhance global competitiveness.
In terms of technology, Japan is committed to reducing the cost of batteries and providing their service life. Therefore, it has launched multiple projects for technological research and development, including wind power projects, vehicle batteries, fixed energy storage batteries, battery material technology evaluation, etc. The energy storage technologies involved include lithium batteries, nickel hydrogen batteries, and all vanadium flow batteries. In 2020, Japan developed a new generation of savings batteries and hopes to reduce production costs by 90% compared to lithium batteries through mass production.
Compared to Japan, South Korea's energy storage industry started relatively late, but it has elevated its development to a national strategic level.
South Korea will focus its policy support on building a globally competitive energy storage industry. Since 2011, the South Korean Ministry of Knowledge Economy (MKE) has invested a large amount of funds in the development of energy storage technology and the construction of energy storage markets. In order to cultivate suppliers for the entire energy storage industry chain, South Korea's energy storage technology research field runs through upstream battery and component production technology, as well as downstream engineering EPC, project development, and software development. With policy support, companies such as Samsung SDI and LGChem have become leaders in the global energy storage battery industry.
Not only that, on the one hand, South Korea focuses on improving the international competitiveness of its battery industry and building a comprehensive energy storage technology research and development and demonstration application system; On the other hand, South Korea has actively promoted the application of energy storage in fields such as frequency regulation auxiliary services, renewable energy generation, and smart grids by carrying out demonstration projects and implementing incentive policies.
In addition to the aforementioned countries, countries around the world such as the UK, Germany, and Australia that have developed their energy storage industry mostly adopt direct policies such as setting energy storage development goals, energy storage application demonstration projects, frequency modulation energy storage procurement plans, energy storage installation subsidies, investment tax incentives, photovoltaic+energy storage incentive plans, energy storage technology research and development projects, as well as electricity market energy storage access policies, auxiliary service payment compensation mechanisms, etc Indirect policies such as time-of-use electricity price policy, demand electricity fee policy, demand response subsidy incentive project, smart grid/distributed energy system demonstration incentive policy, and simplified approval process for energy storage grid integration are promoting the opening of the energy storage application market.
The global energy storage industry is showing a vigorous development trend
The development trend of the energy storage industry has attracted high attention from the capital market, and the global energy storage industry is showing a vigorous development trend. The energy storage industry in countries such as the United States and Japan leads the world.
The United States has nearly half of the world's demonstration projects and has emerged with several commercial energy storage projects. According to a new US energy storage monitoring report released by research firm Wood Mackenzie and the Energy Storage Association (ESA) *, the United States will deploy an energy storage system with an installed capacity of 345MW in the second quarter of 2021. And this is an increase of 162% compared to the same period in 2020, making the second quarter of 2021 the second highest quarter for energy storage system deployment in the United States.
According to the 2022 White Paper on Energy Storage Industry Research, the development of the US energy storage market in 2021 has still set a historical record, despite the pressure of delayed project construction caused by supply chain battery procurement shortages and price increases. On the one hand, the scale of newly added energy storage projects has exceeded 3GW for the first time, which is 2.5 times that of the same period in 2020. Among them, 88% of the installed share comes from pre meter applications, mainly source side light storage projects and independent energy storage power stations; On the other hand, the installed capacity of individual projects is also constantly breaking historical records. The largest energy storage project completed in 2021 is the 409MW/900MWh Manatee Energy Storage Center project of Florida Power and Lighting Company. At the same time, the United States is about to embark on a new era of gigawatt level projects from the gigawatt level.
Due to resource scarcity and strong environmental awareness among Japanese citizens, solar power generation was already applied in the early days without policies and with very high prices for photovoltaic modules. During the 10 years from 2011 to 2020, Japan's photovoltaic installed capacity continued to rise. Since the introduction of the solar power grid electricity price subsidy policy in 2012 and the green and pollution-free characteristics of solar power generation, photovoltaic power generation devices have been able to be installed and applied on a large scale.
In 2021, the Japanese Cabinet passed the draft of the Sixth Energy Basic Plan, setting the goal of new energy composition by 2030. The document proposes that by 2030, the proportion of renewable energy in the electricity composition will increase from 22% to 24% to 36% to 38%.
Unlike the United States, driven by the renewable energy goals and commitments of various European countries, as well as the opening up of various grid service market opportunities, the installed capacity of the European energy storage market has been continuously increasing since 2016 and showing a rapid growth trend. According to the "White Paper on Energy Storage Industry Research 2022", in 2021, Europe added 2.2GW of new operational capacity, and the household energy storage market performed strongly, with a scale exceeding 1GW.
Among them, Germany still holds the leading position in this field, with 92% of the new installed capacity coming from household energy storage, with a cumulative installation volume of 430000 units. In addition, the household energy storage market in Italy, Austria, the United Kingdom, Switzerland and other regions is on the rise. The pre table market is mainly concentrated in the UK and Ireland, where the former allowed the construction of projects with a scale of 50MW and over 350MW in England and Wales, resulting in a rapid increase in installed capacity, with the average size of a single project rising to 54MW; The latter is the open auxiliary service market for energy storage resources. Currently, Ireland is planning a grid level battery energy storage project with a scale of over 2.5GW, and the market size will continue to rise in the short term, maintaining high-speed growth.
As far as Germany is concerned, it does not have the resources to develop solar thermal power plants. Therefore, utilizing energy storage technology to achieve smooth grid connection of more renewable energy has become one of the important choices, especially in the field of solar energy storage batteries, with huge potential. By the end of 2020, nearly 70% of residential solar power generation facilities in Germany had been equipped with battery energy storage systems. As of 2021, the cumulative deployed capacity of the German residential energy storage market is approximately 2.3GWh.
According to a report commissioned by the German Energy Storage Association (BVES) and consulting firm Energie Consulting, German household users have currently installed over 300000 residential battery energy storage systems, with an average capacity of approximately 8.5kWh per deployed residential energy storage system.
According to a survey by Energie Consulting, the revenue of the residential energy storage market in Germany in 2019 was approximately 660 million euros, which increased by 60% to 1.1 billion euros by 2020. The reason for this is the increasing interest in energy elasticity, self-sufficiency and security, as well as the independence of power supply.
As the third country to accelerate electrification deployment after China and Europe, India's new energy market is awakening. Many overseas battery manufacturers have established factories in India, increasing their interest in providing products locally or throughout Asia, and have established a number of production bases for power batteries and energy storage products. Currently, renewable energy accounts for 10% of India's total electricity generation. According to the 2021 India Energy Outlook released by the International Energy Agency (IEA), India's installed renewable energy capacity will double to 900GW by 2040. Due to solar electricity prices below 2 rupees/kWh, renewable energy in India is now competitive in cost and will become the main source of electricity supply in the coming decades.
The era of energy storage is approaching, and what are the future development trends?
Throughout the development of the global energy storage industry, countries have formulated and implemented many incentive policies and subsidies to promote the sustainable development of the energy storage industry. Looking ahead, driven by the rapid development of the renewable energy industry, electric vehicle industry, and energy internet industry, the energy storage industry is expected to show an explosive growth trend.
Experts point out that in the future energy landscape, energy storage products and services will comprehensively cover the three major energy consumption fields of transportation, construction, and industry. Electrochemical energy storage technology will become the mainstream energy storage technology, comprehensive energy services and smart energy technology will become the basic configuration of future energy enterprises, and electricity combined with energy storage will replace traditional energy as one of the important international trade commodities in the new era.
At present, it seems that the global energy storage market has great potential for development. Facing the huge market space, China's energy storage industry may face a new trend. In addition, the performance and cost of battery systems determine the large-scale promotion and application of energy storage, which is a bottleneck problem affecting the rapid development of the industry. Experts predict that the technological development path of energy storage batteries will gradually become clear in the next 10 years.
Major institutions around the world have predicted the size of the future global energy storage market, indicating that the development potential of the energy storage market is enormous. Based on various predictions, the installed capacity of energy storage worldwide is expected to triple by 2030. The driving force for energy storage growth mainly comes from the promotion of renewable energy and the improvement of power system requirements. It is expected that the development of renewable energy generation, distributed power generation, smart grids, and electric vehicle markets will drive further growth in the global energy storage market. At the same time, it is predicted that although many large pumped storage power station projects are still under planning, in the long run, the proportion of pumped storage power stations in the energy storage installation structure will show a decreasing trend.

In addition, as the demand for renewable energy continues to grow, long-term energy storage will become even more important. The average continuous discharge time of the energy storage system will increase by more than 2 hours, which has already occurred in the US market. Analysts predict that the global market will catch up with this trend in 2022.
Looking back at the development path of China's energy storage industry. Taking advantage of the "dual carbon" trend, the energy storage industry has received unprecedented attention and a hot investment boom. In 2021, more than 300 national and local energy storage related policies were introduced, and the industrial chain investment plan has exceeded 1.2 trillion yuan. New energy storage enterprises have also made significant breakthroughs in financing and technology, and the large-scale development of energy storage has arrived.
But objectively speaking, currently, China's energy storage industry is still in the early stages of large-scale application, and some relevant technical standards are not yet perfect. In contrast, the commercialization models of energy storage abroad have become more mature, and their energy storage policies, business models, and successful experiences may bring us some inspiration.