Core viewpoints
Improving the necessity and economy of energy storage
Necessity: 1. The global proportion of new energy installed capacity has exceeded 20%, and it is expected to exceed 35% by 2027. The increase in the proportion of new energy will continue to impact the stability of the power system. The installation of energy storage in front of the table is the best solution to smooth the fluctuations of the current power system. Therefore, policies in multiple regions have proposed mandatory storage requirements for new power stations; 2. European electricity prices have fluctuated significantly, and China's electricity supply continues to be tight. The installation of energy storage after the meter can effectively reduce electricity consumption risks.
Economy: 1. With the promotion of electricity market reform, the peak valley price difference, cross market price difference, and domestic industrial and commercial price difference continue to widen. Energy storage can effectively improve the temporal and spatial rigidity of electricity and expand arbitrage space; 2. After the allocation and storage of power plants, costs will increase and profitability will be affected. However, in the future, the prices of silicon and lithium ore are expected to decline to lower levels, and the efficiency of power generation/storage will continue to improve. The costs of photovoltaic modules and cells will continue to decrease, and profitability will improve.
In 2025, the global installed capacity of electrochemical energy storage will approach 80GW, and in response to the demand for approximately 300GWh of new installed capacity, the three major markets in China, the United States, and Europe will continue to grow rapidly
Chinese market: 1. Policy: The historical allocation and storage ratio of new energy is low, and policy mandatory allocation and storage boost the expected increase in energy storage; Guided by the reform of the electricity market, the profit model of energy storage is gradually becoming clearer - the pre balance sheet market profits through four methods: capacity leasing, capacity compensation, auxiliary services, and spot market arbitrage, while the post balance sheet market profits through peak valley arbitrage. 2. Trend: Deep side energy storage drives the development of energy storage in China. The expected installed capacity of electrochemical energy storage in China in 2022/2023 is 6.1GW and 13.8GW, with a year-on-year increase of+175.5% and+119.7%. By 2025, the cumulative installed capacity of electrochemical energy storage will reach 70GW, with a CAGR of+88.9% from 2021 to 2025.
US market: 1. Policy: Subsidy for energy storage based on the IRA Act, with energy storage becoming an independent subsidy subject and enjoying a 309% investment tax credit for up to 10 years. 2. Trend: Energy storage in the United States is mainly based on pre table large storage. In 2022/2023, the expected installed capacity of electrochemical energy storage in the United States is 6.0/16.6GW, with a year-on-year increase of 71.4%/+168.0%. By 2025, the cumulative installed capacity of electrochemical energy storage will exceed 75GW, with an estimated CAGR of+88.4% from 2021 to 2025.
European market: 1. Policy: The EU plans to have a wind and solar capacity of approximately 1100GW by 2030, with energy storage development promoted on both supply and demand sides. The promulgation of policies such as RE Power EU and carbon reduction 55 will increase the proportion of renewable energy structure in Europe to 45% in the long term. And provide financial support for research on battery energy storage technology. 2. Trend: Currently, the energy storage market in Europe is dominated by the aftermarket, with a significant increase in household storage demand. With the improvement of new energy installation, the pre meter market is expected to take over as the core driving force for development in the future. In 2022/2023, the expected installed capacity of electrochemical energy storage in Europe is 5.1/7.0GW,+70.0%/+37.3% year-on-year. By 2025, the cumulative installed capacity of electrochemical energy storage is close to 40GW, and the CAGR for 2021-2025 is expected to+53.796.
◆ Global Energy Storage Forecast: Over 20GW of new installed capacity will be added in 2022, with a cumulative scale of 233GW by 2025
According to calculations, the new installed capacity of electrochemical energy storage worldwide in 2022 is approximately 21.5GW/50GWh, with a year-on-year increase of+113.6%/+108.9%. The increase in installed capacity is mainly contributed by the three major economies of China, the United States, and Europe, with new installed capacity of 6.1/6.0/5.1GW and+175.5%/+71.4%/+70.0% respectively, totaling 17.2GW, accounting for about 80% of the total global installed capacity.
The energy storage installation is expected to further improve in 2023. According to calculations, the global increase in electrochemical energy storage capacity in 2023 is expected to reach approximately 46GW, with a high growth rate of+112.1% year-on-year. The new installed capacity in China, the United States, and Europe is expected to be 13.8/16.6/7.0GW, and+119.7%/+168.0%/+37.3% year-on-year, respectively. With the increasing demand for new energy installation, distribution, and storage, the cumulative scale of global electrochemical energy storage is expected to reach 233GW by 2025, with an annual installed capacity of approximately 77GW and a CAGR of+52.5% from 2021 to 2025.
◆ Global energy storage: With rapid growth in total scale, mainly focused on pumping and storage, and a sudden rise in electrochemical technology, the total increment in China, America, and Europe exceeds 80%
The total scale of global energy storage continues to increase rapidly. Since 2019, the cumulative growth rate of global energy storage has continued to grow. According to CNESA's prediction, as of the end of 2021, the cumulative installed capacity of global energy storage will reach 209.4GW, a year-on-year increase of 9.6%, and an additional 18.3GW, a year-on-year increase of 181.5%.
Pumped storage is still the mainstream, and the proportion of electrochemical energy storage is increasing year by year, which will contribute to the main increment of global energy storage in the coming years. According to CNESA statistics, as of the end of 2021, the total installed capacity of pumped storage worldwide reached 180.5GW, accounting for 86.2% of the total scale. The cumulative installed capacity of electrochemical energy storage increased from 3.0GW/1.7% in 2017 to 24.5GW/11.7% in 2021, with a CAGR of+69.39%. In 2021, the newly installed capacity of new energy storage reached 10.4GW, with a year-on-year increase of+119.6%, accounting for approximately 57% of the total new installed capacity. Among them, electrochemical technology accounted for 55%, becoming the main driving force for the global new installed capacity of energy storage. According to BNEF's prediction, the global electrochemical installed capacity is expected to reach 148GW by 2025, with electrochemical energy storage accounting for about 40% of the total.
China, the United States, and Europe are the main global markets for new energy storage. In 2021, the newly installed capacity of new energy storage in China, the United States, and Europe was 2.5/3.5/2.3GW, accounting for 24%/34%/22% respectively, and the total proportion was around 80%. It is expected that in the future, China, the United States, and Europe will continue to control the main increase in global new energy storage installations.