The Development Trend of Global Energy Storage

Stimulated by the surge in global energy storage demand, in the first three quarters of 2022, the United States added nearly 7.0 gigawatts of new energy storage installed capacity, while Europe added nearly 6.0 gigawatts of new energy storage installed capacity. During the same period, China's new energy storage installed capacity increased by more than 7.0 gigawatts, significantly improving the high prosperity of the global energy storage market. According to the International Energy Agency's prediction, the global installed energy storage capacity will increase by 56% in the next five years, reaching over 270 gigawatts by 2026.
The Dinghai God Needle for Energy Transformation
The year 2050 or 2060 is the time limit set by major global economies to achieve the goal of "carbon neutrality". Replacing traditional fossil fuels with clean energy has become the best choice, among which clean energy that can demonstrate strong alternative functions and broad application prospects mainly includes hydropower, hydrogen energy, solar energy, and wind energy. However, hydropower not only has an uneven global distribution, but also has a very limited number of resource endowments; Due to the immaturity of technological conditions, hydrogen energy resources cannot be developed and utilized on a large scale in the short term. In this way, the heavy responsibility of diluting traditional thermal power, creating future green electricity, and ultimately achieving energy transformation goals falls on wind and solar energy.
However, although wind and solar energy may seem inexhaustible, their own shortcomings are obvious when it comes to power generation. Taking wind energy as an example, the daily output amplitude can reach up to 80%, reaching a peak around the morning and then weakening to a low point in the afternoon. The "reverse load" characteristic is exceptionally obvious; Similarly, the fluctuation range of light energy during the day is as high as *, reaching the peak of the day at noon and showing a uniform decline before and after noon. The output at night drops to zero, with distinct peak valley characteristics; Not only that, light energy is also susceptible to weather disturbances. The impact of cloudy and sunny weather on the actual active power release of light energy is very strong, and the daily actual active power also has a certain degree of randomness. It is precisely the volatility, intermittency, and randomness of wind and solar energy that create unstable output power sources, which can easily lead to uneven and discontinuous power output on the power generation side, and it is also difficult to balance the power supply and demand on the power grid side and the user side. The volatility of the entire power system is severe, and social production and people's lives are affected by risks.
Overall, the stronger the substitution of clean energy for fossil fuels, the greater the output power of green electricity. However, at the same time, the difficulty of balancing power supply and demand will also significantly increase. Therefore, only by utilizing the power mechanism of energy storage can the risk of converting clean energy such as wind and solar energy into green electricity be reduced to a minimum. Objectively speaking, before storage, both wind and solar energy were idle and surplus. However, through storage, intangible energy became valuable resources, especially when the power energy was insufficient or the demand for electricity increased, the stored energy was released and converted into electricity, and each unit of wind and solar energy was fully utilized and developed; At the same time, storing wind and solar energy can greatly reduce unexpected interference from subsequent weather factors, enhance the continuity and stability of power transmission on the power generation side, and with the help of energy storage, the grid side (enterprise) can timely purchase electricity when the power supply side is in high demand, sell electricity quickly when the demand on the power consumption side is in high demand, cut peak and fill valley, and greatly improve the flexibility of the power grid system, In practice, clean energy electricity can also be consumed to prevent the behavior of "abandoning wind and light" due to supply and demand imbalance.
It is also worth emphasizing that whether it is the power generation side, the grid side, or the user side, energy storage can also provide ideal premium benefits. That is, when the peak and valley state of electricity leads to a rise in electricity prices, the three parties can transfer surplus energy storage for a fee through the green electricity trading market and profit from it, thereby greatly enhancing the competitiveness of each energy storage entity, *Ultimately, a closed-loop and virtuous cycle mechanism for the commercial market of "energy storage power generation trading value-added re storage" will be formed, while promoting the balance of electricity supply and demand. The transformation risks of replacing traditional energy with clean energy can be effectively diluted and eliminated. In this sense, we can regard energy storage as the anchor of energy transformation.
New energy storage coming from behind
According to the resource tools and their performance that energy storage relies on, energy storage in various countries around the world is mainly divided into two types: traditional energy storage and new energy storage. The former mainly refers to pumped energy storage, while the latter includes electrochemical energy storage and compressed air energy storage. Pumped energy storage refers to the use of electricity from low power loads to pump water into the upper reservoir, and then release water to the lower reservoir for power generation during peak power loads; Electrochemical energy storage refers to the use of high-power and high-performance batteries for positive and negative energy storage and discharge. Compressed air energy storage mainly utilizes the remaining electricity from the grid during low load periods to compress the air, which is stored in high-pressure sealed facilities and released during peak electricity consumption to drive gas turbines for power generation. At present, the cumulative installed scale of pumped storage energy globally is * large, followed by electrochemical energy storage, and compressed air energy storage is in a slow expansion state.
Pumped energy storage not only has a long history, but also has mature technological accumulation and business models. However, as the main energy storage method, pumped energy storage is strictly limited by geographical potential space. It not only has slow startup speed, long construction period, limited resource endowment, and high cost, but also is less affected by external factors. Project startup and construction are flexible, and response speed is fast. More importantly, As a widely distributed electrochemical energy storage method, lithium-ion energy storage not only has mature processes, but also has an increasingly significant marginal trend of cost reduction. Data shows that as of the end of 2021, the cumulative installed capacity of global pumped energy storage was below 90% for the first time, a year-on-year decrease of 4.1%, while the proportion of electrochemical energy storage increased to 12.2%, with a cumulative installed capacity of 25.4 gigawatts, a year-on-year increase of 67.7%. Moreover, based on the flexibility of electrochemical energy storage and its high adaptability to densely populated areas, the future expansion space will be more extensive.
Further analysis reveals that the global market share of lithium battery energy storage has exceeded 90%. However, data shows that sodium is abundant, accounting for up to 2.75% of the Earth's crust and distributed globally. In contrast, lithium is only 0.0065%, mainly distributed in the Americas; In terms of price, the price of sodium is only 0.29 US dollars per kilogram, while the current price of lithium is about 21.5 US dollars per kilogram. Affected by this, the raw material cost of sodium batteries is 30% to 40% lower than that of lithium batteries; Not only that, sodium ion batteries can achieve a discharge retention rate of over 90% in a low temperature environment of -20 ℃, release over 70% of capacity at a low temperature of -40 ℃, and can be recycled for charging and discharging at a high temperature of 80 ℃. The project implementation and scenario application are more flexible, so replacing lithium batteries with sodium batteries will be the trend; In addition, vanadium batteries have a lifespan of more than 10 years, can be cycled more than 10000 times, and will not experience thermal runaway, combustion, and explosion. The world's proven vanadium metal reserves reach up to 22 million tons, and vanadium battery energy storage may also come from behind.
Compared to electrochemical energy storage, although the scale of compressed air energy storage is much lower, just like pumped energy storage, compressed air energy storage has a considerable history. Germany and the United States have long used caves (such as rock caves, salt caves, abandoned mines, etc.) for compressed air energy storage. However, the shortcomings of traditional compressed air energy storage that rely on fossil fuels and natural gas storage caves have limited expansion space, and in response to related bottleneck factors, Countries around the world are actively developing new types of compressed air energy storage technologies, including isothermal compressed air energy storage systems, liquefied air energy storage systems, and constant pressure compressed air energy storage systems. At present, the efficiency of the new compressed air energy storage system is approaching 75%, with a project cost of 720-850 US dollars per kilowatt, which is equivalent to pumped storage. At the same time, it also has advantages such as long service life, clean and pollution-free, unlimited energy storage cycle, and no dependence on fossil fuels and geographical conditions. It may show great potential in the future.
Massive expansion and mainstream trends
Data shows that by the end of 2021, the cumulative installed capacity of energy storage projects that have been put into operation globally was 209.4 gigawatts, of which 18.3 gigawatts were newly added in 2021, a year-on-year increase of 185%. In 2022, due to geopolitical factors, energy prices in Europe continue to rise, driving local electricity prices to record highs. At the same time, cost driven inflation caused by rising commodity prices has also raised the traditional energy consumption costs of global enterprises and residents, thereby stimulating explosive growth in energy storage demand. Market research firm HIS Markit pointed out that the new global demand for energy storage in the next five years will reach 630 gigawatts per hour, which will be driven by the trend. The scale and commercialization of global energy storage are bound to continue to increase. What is more noteworthy is that while the total scale of energy storage is expanding, there will also be several very clear lines and trends in global energy storage in the future.
Firstly, the proportion of new energy storage is increasing. In 2021, the installed capacity of new energy storage projects in the world exceeded 10 gigawatts for the first time, reaching 10.3 gigawatts, a year-on-year increase of 119%. By the end of 2021, the cumulative installed capacity of new energy storage projects worldwide was about 25 gigawatts, a year-on-year increase of about 68%, and its proportion in all energy storage installations increased to 12%. According to a research report released by the National Renewable Energy Laboratory in the United States, by 2030, the cost of battery energy storage systems, which are the main cost of new energy storage systems, will continue to decrease significantly and rapidly. It is not until 2050 that the decline rate is likely to slow down, which will trigger the acceleration and expansion of new energy storage. At present, the United States has completely stopped building new pumped storage power generation facilities. With the aim of saving and protecting water resources, major global economies are expected to take the lead in following up, and traditional energy storage will eventually exit the market.
Secondly, the head effect is becoming increasingly significant. As of the end of 2021, the three major economies of the United States, China, and Europe accounted for 34%, 24%, and 22% of energy storage projects that have been put into operation globally, with a combined proportion of up to 80%. This trend of leading economies will continue to strengthen. BNEF (Bloomberg New Energy Finance) predicts that in the next five years, the compound growth rate of new installed capacity in the US energy storage system will reach 118.3%, China will be faster at 174.3%, and Europe will be 76.3%.
Thirdly, the application scenarios are becoming increasingly diverse. According to different application fields, energy storage can be divided into pre meter energy storage and post meter energy storage. Pre meter energy storage can be divided into power generation side energy storage and grid side energy storage, while post meter energy storage includes user side energy storage by industrial and commercial energy storage and household energy storage. Based on the rigid demand for power grid construction, mature business models, and a tilted focus on policy subsidies, the energy storage in the United States is mainly manifested as pre table energy storage. The corresponding annual compound growth rate of energy storage installed capacity in the next five years is as high as 125%; Similarly, due to the mandatory allocation of energy storage under the policy requirements of the power generation side, China's future new energy storage will mainly focus on pre table energy storage, and the corresponding annual composite growth rate of new installed capacity for energy storage is expected to reach 190%; In addition to China and the United States, the new energy storage in major energy storage countries and regions such as Europe, Japan, and Australia is mainly reflected in post table energy storage, especially the special roof structure in the European region, coupled with long-term high electricity prices. Distributed photovoltaic and household energy storage (household energy storage) will be an important energy storage entity. In the next five years, the annual composite growth rate of post table energy storage installation in Europe can reach 142%, with household energy storage growth rate expected to exceed 150%.
Fourthly, long-term energy storage is becoming increasingly prominent. At present, the service response demand provided by global new energy storage systems is generally 4 hours, with some even shorter. However, with the advancement of ultra long and medium long time scale energy storage technologies and high proportion of renewable energy active support technologies in the future, long-term energy storage (with a duration of more than 10 hours or even in days) will become the main development trend of the industry. At the same time, according to the Energy Earthshots program initiated by the US Department of Energy, In the next decade, the cost of long-term energy storage can be reduced by 90%, and long-term energy storage will further highlight the advantages of commercial applications. Correspondingly, the coverage of new energy storage technologies such as compressed air energy storage that can support long-term energy storage is expected to accelerate its expansion.
Fifthly, the safety of energy storage is receiving increasing attention. According to incomplete statistics, there have been over 50 global energy storage safety accidents in the past 10 years. However, this year's fire at SK Energy's battery storage building in South Korea has once again sounded an alarm for the market, and energy storage safety issues have become a common problem facing the world. To this end, establishing a standard system for the application of energy storage technology, limiting low-priced and low-quality competition, clarifying the main responsibility of energy storage safety, and improving relevant safety regulations and norms will quickly bring infrastructure construction issues to the forefront of international attention and government decision-making.