Four major trends in the energy storage industry's "capacity expansion" in 2023-EEWORLD

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The energy storage industry continues to be hot, and companies are expanding production in full swing.

Since the beginning of 2023, the energy storage industry has ushered in a new round of expansion peaks, and nearly 20 companies in the upstream and downstream of the industry chain have announced the latest energy storage project construction plans. At the same time, a number of energy storage production line construction projects that started construction in 2022 are expected to be put into production in the first quarter, and the tight supply of battery cells throughout 2022 is expected to be alleviated.

Among the companies expanding production, battery companies and energy storage system integration companies accounted for the largest proportion.

Energy storage system integration : Times Nebula, China Energy Equipment Gezhouba Equipment Company, Yintai New Energy, Zhuoyang Group, China Power, Ningbo Shuangyi Power;

Energy storage batteries : EVE Energy, China New Energy, Shenghong Group, Xiongtao Holdings (lithium + sodium), Shanghai Electric Energy Storage (liquid flow), Jidian Energy Valley Energy Storage (lead carbon);

Battery cells and system integration : Juwan Technology Research, Ganfeng Lithium, Lanjun New Energy;

Others : Zhiguang Electric (PCS), Hunan Bosheng New Energy (power and energy storage battery comprehensive materials) .

The following is a summary of the energy storage companies’ expansion projects compiled by Gaogong Robotics (partial):

Among the expansion projects, the scale of expansion since 2023 has been at the GWh level. EVE Energy, Shenghong Group, China Innovation Aviation, Xiongtao Holdings, Ganfeng Lithium, Zhuoyang Energy, and Kubo Energy have accelerated the energy storage race. Among them, the super battery factory plans of EVE Energy and Shenghong Group have attracted the most attention.

On February 1, Yiwei Lithium Energy The factories in areas 6, 7, 8 and 9 were put into production, with a total power storage battery production capacity of 73GWh; on January 18, Yiwei Lithium Energy announced that it plans to sign a 60GWh power storage battery production line and auxiliary facilities project and a 23GWh cylindrical lithium iron phosphate power storage battery project with Jingmen, Hubei and Qujing, Yunnan respectively.

On January 31, Shenghong Group signed a contract for its 60GWh energy storage battery super factory and new energy battery research institute project in Zhangjiagang, Jiangsu, with a planned total investment of 30.6 billion yuan.

From the perspective of energy storage companies’ expansion and investment planning, Gaogong Robotics believes that the following aspects deserve attention:

1. Power battery companies are increasing their investment in the energy storage sector. Energy storage has been widely recognized by the industry as a super track independent of power batteries. The demand for energy storage-specific batteries has prompted companies to deploy energy storage-specific battery production lines and expand production of large-capacity specialized cells for power energy storage. At present, the energy storage market is in a stage of fierce competition. From the perspective of capacity planning, power battery companies such as Sinotruk, EVE Energy, Ruipu Lanjun, and Juwan Technology Research are actively promoting the implementation of capacity in the energy storage field.

2. Related companies are accelerating cross-border energy storage and actively promoting capacity layout. Large chemical companies Shenghong Group and photovoltaic companies Risen Energy have both bet on energy storage and announced relevant capacity construction plans. Their industries are closely related to the energy storage industry. Risen Energy's holding subsidiary Ningbo Shuangyili will build a 10GWh high-efficiency new energy storage system integrated technology research and development and manufacturing project in Ninghai.

The power battery industry has a clear structure, and the leading companies have increasingly significant advantages in production capacity, technology, products, and markets. However, the energy storage market is in its early stages of development, and the industry structure is uncertain, and is in a rapid reshuffle stage. Recently, the listed company Jiawei New Energy has announced that it will abandon lithium batteries and focus on photovoltaics. Gaogong Energy Storage will continue to pay attention to how cross-border players build industry competitive advantages.

3. Lithium batteries are the leading technology, and sodium batteries, flow batteries and other technical routes are accelerating the industrialization process. From the perspective of expansion projects, energy storage batteries and energy storage systems are still the main ones, and lithium-ion batteries are the majority.

However, the industrialization of new energy storage technologies such as sodium batteries, flow batteries and flywheel energy storage is also accelerating. Among them, Weijing Energy Storage and Shanghai Electric Energy Storage announced the planning of flow battery projects, and Xiongtao Co., Ltd. signed a 15GWh lithium battery and 10GWh sodium battery industrial park project in Jingmen, Hubei.

Fourth, the production capacity of central enterprises has been implemented, and the business has extended from downstream to upstream. On January 8, the 2000MWh electrochemical energy storage production project in Ganzhou District, Zhangye City, China Energy Equipment Gezhouba Equipment Company, a subsidiary of China Energy Construction, was officially put into production. The downstream demand side represented by China Energy Construction, China Power, and Shanghai Electric Energy Storage is making full efforts in the fields of electrochemical energy storage and long-term energy storage, and the energy storage market will change.

Gaogong Robot believes that, on the one hand, rapidly establishing production capacity at this stage will win companies a competitive advantage and quickly gain a position in the energy storage market; on the other hand, the rapid growth of the energy storage market in developed countries and regions such as Europe, the United States, Australia, Japan and South Korea, and the development of energy storage market demand in underdeveloped regions such as Asia, Africa and Latin America will further stimulate the industry's enthusiasm for expansion.

In terms of energy storage system integration , a survey by Gaogong Industry Research Institute (GGII) shows that the global energy storage market will continue its rapid growth in 2021 in 2022, with major markets such as Europe, the United States, and China blooming in multiple places, driving the scale of energy storage system integration orders to rise rapidly year-on-year. The order volume of domestic leading system integrators has increased by 1 to 10 times year-on-year, and order production is scheduled until Q1 2023.

Energy storage integrated systems are in the early stages of competition, and a differentiated competitive landscape is beginning to emerge. Currently, the rankings of leading energy storage system manufacturers have changed significantly, and the competitive landscape is in a period of evolution and reshaping. It is expected that the market share of companies with leading technology, rich customer resources, and strong supply chain integration capabilities is expected to further increase.

Only when production capacity adapts to the market can the industry develop in a healthy way. In terms of energy storage batteries , the substantial expansion of production has caused concerns about overcapacity in the industry.

Since 2022, there has been a constant flow of news about energy storage battery project signings, financing, construction and commissioning. According to incomplete statistics from Gaogong Industry Research Institute (GGII), there have been 26 energy storage battery-related expansion projects (some involving integrated power storage capacity) in 2022 alone, with a total investment of more than 300 billion yuan and a capacity of 820GWh.

On the demand side, GGII survey data shows that annual shipments of energy storage lithium batteries reached 130GWh in 2022, a year-on-year increase of 170.8%.

Hunan Yuneng's prospectus mentioned that thanks to the explosion of large-scale storage in China and the United States and household storage in Europe, the global energy storage capacity demand is expected to be 147/449GWh in 2023/2025, a year-on-year increase of 106% in 2023, and a CAGR of 84% from 2022 to 2025. Taking into account inventory, the actual global energy storage demand is expected to be 255/709GWh in 2023/2025, a year-on-year increase of 103% in 2023, and a CAGR of 78% from 2022 to 2025.

In contrast, the current large-scale expansion of energy storage lithium batteries may exacerbate future market risks. Once the installed capacity demand in the downstream energy storage market falls short of expectations, the risk of overcapacity may be high.

However, the production line construction itself has a production capacity utilization rate of 60% to 80%, and the capacity release is phased, as well as some inventory needs. Energy storage companies can adjust or even cancel their own capacity construction plans based on market competition. In the long run, the energy storage industry will find its own balance in the game between demand and capacity.