Due to the widespread intermittent and volatility of new energy power generation methods such as wind power generation and photovoltaic power generation, as well as the volatility characteristics of residential and industrial electricity consumption, how to ensure and balance the stability of both sides of power supply and demand has become a problem that must be overcome at present and in the future, and energy storage is the key to solving these problems.

The principle of energy storage and power bank is basically similar, charging at the bottom, discharging at the peak, storing unstable power such as wind power or photovoltaics, and then transforming and stabilizing the output. Among the many energy storage technology routes, with the progress of battery technology and the reduction of costs, electrochemical energy storage is considered to have the most development potential and is the next blue ocean market that is about to break out.

Relevant statistics show that in 2021, the state and local governments have successively introduced more than 300 energy storage-related policies, and the industrial chain investment plan has exceeded 1.2 trillion yuan. As of the beginning of this year, a total of 25 provinces have written the development of energy storage into the government work report.

Haitong Securities pointed out in the research report that the installed scale of new energy storage in China will reach more than 30GWh in 2025, and as of 2021, the cumulative installed scale of new energy storage is only about 5.7GWh, which means that the installed scale of new energy storage still has room for growth of at least 5~6 times. Everbright Securities believes that the size of China's energy storage market will reach 0.45 trillion yuan by 2025 and will grow to about 1.3 trillion yuan by 2030.

ternary lithium batteries with greater energy density have grabbed the first soup in the energy storage market. However, since 2017, there have been continuous fire and explosion accidents in energy storage power stations, including 24 fires or explosions in South Korea, which has caused concerns about the safety of ternary lithium batteries as energy storage power stations.

On June 29 this year, the General Department of the National Energy Administration issued a letter soliciting opinions on the "Twenty-five Key Requirements for Preventing Electricity Production Accidents (2022 Edition) (Draft for Comments)", which mentioned in the requirements for preventing fire accidents in electrochemical energy storage power stations: medium and large electrochemical energy storage power stations should not use ternary lithium batteries and sodium-sulfur batteries, and it is not appropriate to choose cascade utilization power batteries.

In this context, lithium iron phosphate batteries, which have more advantages in safety, cost and life, have begun to enter the energy storage market in a big way, and it should be pointed out that lithium iron phosphate batteries have not only gained opportunities for new energy storage power station projects, but also replaced the completed ternary lithium battery projects.

After the Russia-Ukraine conflict and extreme weather, the energy crisis in Europe continues to worsen. Europe's benchmark natural gas price has soared 550% in the past 12 months, and electricity prices have risen nearly 10 times in a year. The situation in France and Germany is particularly severe, with France delivering a base load electricity price of 1,130 euros/MWh next year, breaking through the 1,000 euro mark for the first time in history, an increase of more than 1,000% compared with the same period last year. The price of the German analogue reaches 995 euros/MWh.

Stimulated by the energy crisis under geopolitical conflicts and strong support from government policies, the demand for household energy storage products in the European market has increased significantly. According to Solar Energy UK, more than 3,000 solar panel installations have been carried out on the roofs of British homes every week in recent months, a threefold increase compared to the summer two years ago. The low cost of optical storage allows consumers to recoup their investment costs almost within 3~5 years.

In China, the trend of household appliances that can generate electricity is also emerging. Taking the power generation air conditioner claimed by Gree Electric as an example, an energy storage battery is arranged inside the air conditioner to charge it when the electricity price is cheap, and the battery is used to drive the air conditioner when the electricity price is expensive, which can greatly reduce the cost of user use and alleviate the pressure on the power system. In this field, lithium iron phosphate also has more cost and stability advantages than ternary.

"There are too many application scenarios for lithium iron phosphate, which is why lithium iron phosphate is suddenly increasing now, and it will continue to increase in the future." Yang Hongxin said.

Considering market demand, lithium ore supply and mining cycle, lithium battery manufacturer expansion cycle and other factors, Yang Hongxin believes that by the second half of next year, the supply and demand relationship between nickel and lithium will ease, and with the release of battery factory expansion capacity, the price of power batteries will fall to a certain extent. However, by 2026, the commissioning of power batteries and energy storage plants in Europe and the United States will further push up demand, so battery resources will still be in a tight balance in the long run.

"The century-old automobile industry was originally very stable, but there are many variables in the electric vehicle industry, such as the Fukushima earthquake, the shutdown of Australian mines, and the inability to deliver goods to South African ports, all of which may lead to the suspension of production by automobile factories around the world. My deepest feeling is that no matter whether it is a vehicle company or a battery company, we must master resources and not let resources become bottlenecks. But in the past two years, we have to endure loneliness and get through difficult times. Yang Hongxin said.

(Source: China Energy Storage Network)