How to view the energy storage value and return of lithium iron phosphate batteries

How do you view the energy storage value of lithium iron phosphate batteries and the return of the power lithium iron phosphate battery craze? With BYD announcing that it will launch CTP lithium iron phosphate batteries (blade batteries) and claiming that the volume energy density can be increased by 50%, lithium iron phosphate batteries have returned to everyone's attention, and the entire market seems to have begun to re-examine lithium iron phosphate batteries.

With automakers such as SAIC and Wuling announcing that they will launch iron-lithium versions of passenger cars, and BYD receiving 5G energy storage orders one after another, it can be expected that the application prospects of lithium iron phosphate batteries in 2020 will be significantly better than in 2019, and the market performance is indeed worth looking forward to.

1How to view the energy storage value of lithium iron phosphate batteries

The iron-lithium battery energy storage system can serve as a buffer between various power sources and stable power demand, and can increase the power generation capacity of unstable power sources such as wind power and solar power. The wind power generation system causes output power oscillation due to changes in wind speed, and the energy storage system can provide stability and reactive power compensation for the wind turbine output through characteristics such as fast response speed and almost equal charge and discharge cycles. At the same time, the energy storage system can adjust the voltage and control the system frequency in the off-grid power generation system.

Lithium iron phosphate battery energy storage system can be used to save fixed equipment investment in the power grid system; improve the utilization rate of power grid equipment, reduce financial risks, avoid huge one-time investment and extremely low equipment utilization, and use the investment in more needed and important occasions; reduce the use cost of end users.

Pumped storage accounts for more than nine layers of energy storage in my country, but the proportion of electrochemical storage has been increasing in recent years. The 5G investment of the three major operators in 2020 has doubled compared with 2019. China Mobile's expected capital expenditure in 2020 is 179.8 billion yuan, of which 5G-related investment plans are about 100 billion yuan, while in 2019 it was 24 billion yuan, which has doubled five times this year. With the explosive construction of 5G base stations, it is expected to bring about a substantial increase in the demand for lithium iron phosphate batteries.

2How do you view the return of the power lithium iron battery craze?

As the prices of major raw materials for iron-lithium batteries have dropped significantly, the cost-effectiveness of iron-lithium batteries has become higher and higher. For large-scale production, the raw material cost of lithium iron phosphate batteries is less than 0.35 yuan/wh, and some companies can even achieve better levels. This is also the main reason why mainstream companies have dared to reduce the price of iron-lithium modules to 0.6-0.65 yuan/wh since 2020, which is 0.15-0.2 yuan/wh cheaper than ternary batteries. Against the backdrop of a price difference of 20%, it is not surprising that car companies have begun to choose to use lithium iron phosphate batteries.

In the early stage of the development of new energy vehicles, in order to change the disadvantage of low battery life, major manufacturers began to develop batteries with higher energy density to achieve longer battery life. Therefore, ternary lithium batteries with large capacity and high energy density have become the most used batteries in new energy vehicles; at the same time, affected by the subsidy policy, new energy vehicle subsidies have requirements for long battery life of vehicles, and ternary lithium batteries can just meet this requirement, so ternary lithium batteries have gradually become the main force in the power battery market.

The reason why lithium iron phosphate batteries are marginalized by the market is that their energy density is low, resulting in insufficient battery life. For a long time in the past, the power battery market was dominated by ternary lithium batteries. Now, with the launch of blade batteries, it is bound to break the existing power battery market structure and usher in new breakthroughs. The release of blade batteries has brought the attention of the majority of users back to lithium iron phosphate batteries. Its advantages of high battery life and greater safety will lead a new trend in power batteries.

The energy density technology of lithium iron phosphate batteries has been significantly improved. With the change in the direction of policy decline, lithium iron phosphate has gradually gained favor due to its own advantages of low cost, high safety and long life. The pattern of "the rise of ternary batteries and the decline of lithium iron phosphate" may be broken, which is also a major change for the power battery market. With the continuous increase in the demand for lithium iron phosphate batteries, the lithium iron phosphate battery market may have a substantial growth in the future.