Data proves who is winning the energy storage race? Where is the future of energy storage?

The current energy storage market is like a raging fire, with official production capacity being higher and higher, and the winning bid price being lower and lower. Leading companies, led by lithium batteries, photovoltaics, and household storage, have accelerated their expansion of production capacity, snatched up territory, and boosted sales after raising tens or hundreds of billions of dollars in financing. According to the most conservative statistics, the current domestic energy storage battery production capacity has exceeded 400GW, which not only absolutely crushes the global energy storage installed capacity of 20.5GW in 2022, but also far exceeds the global energy storage installed capacity of around 200GW generally expected in 2025. Correspondingly, the winning bid price of energy storage systems has dropped from 1.6 yuan/Wh at the beginning of the year to below 1 yuan/Wh, and some battery cell companies have called out sales prices of no more than 0.5 yuan/Wh.

This wave of investment in energy storage started in 2021. Due to the rapid development of new energy sources such as photovoltaics and wind power, the surge in industrial, commercial and household energy storage in Europe and the United States, and the mandatory policy of domestic new energy storage, the energy storage market will experience explosive growth in 2022 and 2023. According to national statistics, pumped storage accounted for 89.3% in 2020, while electrochemical energy storage, the largest of new energy storage, accounted for only 9.2%; the proportion of new energy storage increased to 21.9% in 2021-2022, 13.1GW; and continued to soar to 33.5% by the end of September 2023, reaching 25.3GW. It can be said that new energy storage has suddenly gone from being ignored to being the center of attention and hot. Today, the energy storage market is still getting bigger, but after just over two years, it seems to be entering another inflection point. In the chaotic price war, disorderly competition, and industry fighting, the industry may enter the first round of reshuffles ahead of schedule.

Business registration big data

In the big family of new energy storage, who is desperately involuted, or are they all involuted? Let's use data to prove it. According to the statistics of industrial and commercial registration information on a certain website, there were 6,607 new energy storage companies registered in 2020, 10,407 in 2021, and 41,070 new registered companies in 2022 under the policy of mandatory storage of new energy. In 2023 (as of November 17), the number of new companies soared by 61,072. In less than two years from 2022 to 2023, the number of companies increased by more than 10 times that of 2021. In less than three years from 2021 to 2023, the number of companies increased by more than 17 times that of the same period in 2020. It can be seen that the involution of the energy storage industry is not groundless. For a more intuitive analysis, we have made more detailed data statistics on newly registered industrial and commercial companies in various sub-routes of new energy storage. As shown in the following figure:

Data shows that from 2020 to 2023, the growth rate of newly registered companies in compressed air energy, gravity energy storage, flywheel energy storage, molten salt energy storage, supercapacitors, and lead-acid batteries has been accelerating and slowing down. As of late November 2023, it has basically reached single digits. Not only did it fail to echo the hot and vigorous energy storage market, but it also felt lonely and powerless. The data on hydrogen energy is as stable as a dog, rising steadily, and the rhythm of hydrogen energy is different. In 2021, the national level issued a total of about 30 hydrogen-related policies, far exceeding the number in previous years. The "Medium- and Long-Term Plan for the Development of the Hydrogen Energy Industry (2021-2035)" and other policies have promoted it. In 2021, it took the lead in adding 894 new companies. Moreover, since hydrogen energy is a troika of hydrogen power, green hydrogen industry, and hydrogen energy storage, the new energy storage policy issued by the National Energy Administration in 2022 does not have a significant impact on it.

Sodium batteries are one of the few bright spots in the table above. In 2022 and 2023, the number of newly registered sodium battery companies reached more than 470, which is 10 times that of the same period in 2020 and 2021. Although the base is not large, the growth rate is exponential. Sodium batteries are in their infancy, and the technology and industrial chain are incomplete. Everything is in the initial stage of possibility and commercialization. Due to the performance and characteristics of sodium batteries, the future of sodium batteries may be mainly in lithium power batteries. It is said that the cost of replacing lithium batteries with sodium batteries is expected to be reduced by 30%. However, as the price of lithium fell from 700,000 yuan/ton to 160,000 yuan/ton, the capital market's enthusiasm for sodium batteries has declined a lot.

Liquid flow batteries have become one of the most promising new energy storage technology routes due to their advantages such as safety, long duration, and large capacity. Their performance can almost perfectly fill the shortcomings of lithium batteries. Data shows that the number of newly registered companies for the keyword liquid flow battery from 2020 to 2023 were 26, 32, 39, and 23 respectively, and the data for the keywords liquid flow energy storage and vanadium battery from 2020 to 2023 were 4/8/11/14, 32/30/54/66 respectively. It can be seen that liquid flow batteries are continuing to grow steadily, among which the all-vanadium liquid flow technology route occupies a dominant position. Due to the high technical barriers of liquid flow batteries, core products, production capacity, and technologies such as electrolytes, diaphragms, electrode plates, and energy storage integrated systems are concentrated in a few leading companies. Although the entire industry chain has been initially formed, it is small in scale, and many hot money wants to enter but has no way. At present, the production capacity of liquid flow batteries is in the stage of rapid commissioning and ramp-up. Institutions and experts unanimously predict that liquid flow batteries will be mass-produced in 2030, and are expected to occupy more than 40% of the new energy storage market in the future. By then, new energy storage and pumped storage will be evenly matched.

Based on the above data, it is not difficult to see that more than 100,000 new companies will be added to my country's energy storage industry from 2022 to 2023. Compressed air energy, gravity energy storage, flywheel energy storage, molten salt energy storage, supercapacitors, lead-acid batteries, etc. have not grown. Although sodium batteries and flow batteries have grown, the base is low. The three pillars of hydrogen energy are only advancing steadily, and the share of traditional pumped storage is constantly decreasing. In fact, at most, there are only 4,900 new energy storage companies excluding lithium batteries in the past two years (including repeated calculations of keywords and some non-energy storage companies such as hydrogen energy and sodium electricity). In other words, more than 102,000 new energy storage companies have been added in less than two years, of which more than 97,000 are engaged in lithium battery energy storage, which is very extreme. Due to the mature application of lithium batteries in power batteries, the complete industrial chain, mutual penetration and vertical integration of upstream and downstream, it is not complicated to copy lithium battery technology and products to lithium battery energy storage products. In addition, the industrial, commercial and household energy storage markets in Europe and the United States have emerged, domestic new energy storage and industrial and commercial energy storage policies have been promoted, the power grid and power system have been supported, and the mature business model of household photovoltaics and distributed energy has been set as a precedent. Whether it is products, technology, business models, policies, etc., it is simply the right time, place and people. In addition, the energy storage industry itself has a low entry threshold. It is not surprising that everyone wants to rush into this trillion-level market to get a piece of the pie and make quick money.

Financing market: Looking further ahead

In the compressed air energy storage financing market, only Beijing Jiatai New Energy successfully raised funds in 2022, and China National Energy Storage completed a round A financing of over 1 billion yuan in 2023; in 2023, Candela (Shenzhen) New Energy) completed a strategic investment, and the investor was Shuimu Chunjin Capital. The last financing of supercapacitors and molten salt energy storage dates back to 2019; in contrast, there were nearly 100 investment and financing cases in the primary market for energy storage in 2023 (according to incomplete statistics), involving 66 companies. Except for 12 companies with new technology routes such as sodium electricity and liquid flow, the remaining lithium power batteries, lithium energy storage batteries, charging and swapping, integrated services, materials, etc., are almost all inextricably linked to lithium batteries. Data at the end of September 2023 verified its popularity. Among new energy storage, lithium-ion energy storage increased from 94.5% at the end of 2022 to 96.5%.

With the influx of various players, the crowded energy storage market is even more mixed. Many energy storage devices are put into use but not used, which directly leads to risks such as similar energy storage technology, homogeneous product quality, and bad money driving out good money. Leading companies such as CATL and Sungrow Power Supply have all called for high-quality development of the energy storage industry. It is true that the energy storage industry has a long way to go, but there is still a long way to go!