Forecast and analysis of the future development of Hunan's energy storage industry

There are almost no photovoltaic projects in Hunan that are compatible with energy storage. The main reason is that the electricity generated by ordinary photovoltaic projects in Hunan is fully absorbed by the power grid. However, as the absorption capacity of the Hunan power grid has approached its limit, Hunan has begun to pay attention to the construction of photovoltaic energy storage projects.

1. Current status of Hunan energy storage market development

As of the end of 2018, China's cumulative installed capacity of energy storage projects in operation was 12.3GW, and Hunan's cumulative installed capacity was 1.338GW, accounting for 10.9% of the national total market size. Among them, the cumulative installed capacity of pumped storage was the largest, at 1.2GW; the cumulative installed capacity of electrochemical energy storage ranked second, at 0.138GW.

*Note: The types of energy storage projects put into operation in Hunan in 2018 include the Heimifeng Pumped Storage Power Station (1.2 million kW), the State Grid Hunan Changsha Energy Storage Power Station (120,000 kW) and the China Resources Hunan Power Plant Energy Storage Power Station (18,000 kW).

In 2018, the cumulative installed capacity of photovoltaic power generation in Hunan was 2.92 million kW, and the newly added installed capacity of photovoltaic power generation was 1.17 million kW.

As for the photovoltaic energy storage market, as of the end of 2019, the cumulative installed capacity of photovoltaic energy storage projects in China had reached 290.4MW, accounting for 18% of the scale of China's energy storage projects in operation, an increase of 12% year-on-year.

However, there are almost no photovoltaic projects in Hunan that are compatible with energy storage. The main reason is that the electricity generated by ordinary photovoltaic projects in Hunan is fully absorbed by the power grid. However, as the absorption capacity of the Hunan power grid has approached its limit, Hunan has begun to pay attention to the construction of photovoltaic and energy storage projects. In 2020, it stopped approving ordinary photovoltaic projects below 6MW and reserved photovoltaic and energy storage projects of more than 700MW. It is expected that Hunan's photovoltaic and energy storage projects will have a large development space in the next five years, which will also bring new business opportunities for the development of Hunan's energy storage equipment industry.

2. Analysis of the current status of Hunan energy storage equipment industry

Energy storage production includes battery production and the production and processing of various materials such as positive and negative electrode materials, electrolytes, diaphragms and electronic control materials. The energy storage industry involves multiple industries in the industrial economy, such as automobiles, electronic information, nonferrous metals, and chemicals. Its statistical caliber is basically consistent with the advanced energy storage materials in the new materials industry. According to the latest data from the Hunan Provincial Bureau of Statistics, in 2016, there were 84 enterprises above designated size in the province's energy storage industry, with a total main business income of 43.475 billion yuan, an increase of 11.0% over the previous year, and a profit of 2.188 billion yuan after deducting losses, an increase of 55.9%. Among them, the 66 advanced energy storage material enterprises included in the province's statistics achieved an output value of 34.5 billion yuan, a year-on-year increase of 35%.

The province's energy storage industry can be summarized by the following three characteristics.

⒈ Fast growth. In terms of income, preliminary statistics show that in the first quarter of 2017, the province's advanced energy storage material production enterprises in the scale industry achieved a total main business income of 9.734 billion yuan, a year-on-year increase of 28.6%, and the growth rate increased by 22.5 percentage points over the same period last year. In terms of added value, in the first quarter of 2017, the province's advanced energy storage materials in the scale industry achieved a year-on-year added value of 24.6%, an increase of 11.7 percentage points over the same period last year, 15.7 percentage points faster than the average growth rate of the new materials industry, and 17.3 percentage points faster than the average growth rate of the scale industry. In terms of the main constituent industries, the seven middle industries in advanced energy storage materials, such as battery manufacturing, automobile parts and accessories manufacturing, precious metal smelting, graphite and other non-metallic mineral products manufacturing, common non-ferrous metal smelting, basic chemical raw materials manufacturing, and electronic components manufacturing, achieved a total main business income of 8.412 billion yuan, an increase of 35.9%, and an added value of 2.144 billion yuan, an increase of 41.4%.

⒉ Excellent structure. At present, the province's energy storage industry is mainly based on the production of lithium-ion batteries and materials with long battery life, good safety performance and strong market competitiveness. In 2016, the added value of lithium-ion battery manufacturing accounted for 75.3% of the battery manufacturing industry in the province. By the first quarter of 2017, this proportion rose to 81.7%, and the growth rate also increased from 30.2% in 2016 to 73.7%. In the first quarter of 2017, the added value of nickel-hydrogen battery manufacturing accounted for only 7.1% of the battery manufacturing industry, an increase of 10.7%.

⒊ Good benefits. In the first quarter of 2017, the province's advanced energy storage material production enterprises in the scale industry achieved a main business income of 9.734 billion yuan, a year-on-year increase of 28.6%; after deducting losses, they realized a profit of 493 million yuan, a year-on-year increase of 38.8%, an increase of 36.8 percentage points over the same period last year, and 13.1 percentage points faster than the average growth rate of total industrial profits. Among them, the growth rates of commonly used non-ferrous metal smelting, automobile parts and accessories manufacturing, and battery manufacturing ranked in the top three, increasing by 120.4%, 108.8% and 89.0% respectively.

3. Analysis of the current situation of government-business coordination in Hunan’s energy storage equipment industry

Based on new requirements in application fields such as new energy vehicles, energy storage, 3C product power supplies, and base station energy storage, there are unlimited business opportunities in the energy storage equipment industry, including drive materials and resource recycling, and power battery materials.

Hunan Province has included the advanced energy storage materials and power battery industry chain into the province's 20 key emerging industrial advantage industry chains to be cultivated and developed. Currently, there are nearly 100 enterprises above designated size in this industry chain, forming a relatively complete industry chain with distinct regional characteristics, ranging from basic materials such as non-ferrous metals and rare earths to advanced energy storage materials, advanced energy storage devices, electric vehicles, and waste power battery recycling.

As the "locomotive" of the province's economic development, the Changsha Municipal Government issued the "Changsha Three-Year Action Plan for Accelerating the Development of Advanced Energy Storage Materials Industry (2020-2022)" in December 2019. It aims to support the agglomeration of major platforms, key enterprises, demonstration projects and other industries in the advanced energy storage materials industry at the level of municipal policies and special financial funds, and increase the inclination towards the advanced energy storage materials industry.

The Hunan Advanced Battery Materials and Battery Industry Technology Innovation Strategic Alliance, established in July 2017, will play a leading role in the development of Hunan's energy storage equipment and will also drive Hunan's energy storage equipment industry to the forefront of the country.

The 2017 National Key R&D Program - 10MW flow battery energy storage technology project was launched in Shaodong County. The energy storage R&D "national team" composed of 15 well-known energy storage universities, research institutions, and enterprises, including the Chinese Academy of Sciences, China Electric Power Research Institute, Dewopu Electric, Central South University, Hunan University, and State Grid, is bound to become the "engine" for the development of Hunan's energy storage equipment.

In November 2018, Shanshan Energy Technology, together with Changsha Advanced Battery Materials and Battery Industry Innovation Strategic Alliance and a number of industrial chain companies in the province, established the Hunan Energy Storage Materials and Power Battery Innovation Center.

The government policy support and industry adjustments for Hunan's energy storage equipment industry will stimulate the high-quality development of Hunan's energy storage equipment industry through industrial leadership, scientific and technological research and development, and innovative development.

4. Analysis of the characteristics of Hunan's energy storage equipment industry

The energy storage equipment industry is technology-intensive, has a wide range of influence, and has great development potential. It is one of the sunrise industries that has attracted widespread attention both internationally and domestically. In recent years, the battery industry in Hunan Province has accelerated its development, playing an important role in promoting the steady and positive development of the province's industrial economy. It has three main characteristics: