With the rising cost of global energy expenditure and the increasing energy shortage in Europe, speeding up the construction of new energy represented by photovoltaics has become the policy consensus of major economies in the world. Global inflation has led to rising commodity prices, making solar energy more economical as a green energy source.
FLYT001 The energy storage industry is in the ascendant
China is going through the largest energy storage investment and construction cycle ever.
The big acceleration in energy storage construction comes against the backdrop of a weak economy and dual carbon goals.
Since 2021, China’s fixed asset investment has declined significantly, putting greater pressure on economic growth. The construction of large-scale energy storage infrastructure will help to expand total demand and stabilize the economy; on the other hand, to achieve the goal of carbon peaking by 2030 and carbon neutrality by 2060, new energy must be greatly developed. The Chinese government plans to increase the share of electricity generated by non-hydro renewable energy sources (mainly wind power and photovoltaics) to about 18% by 2025, compared with 11.7% in 2021.
Wind power is an intermittent energy source. According to the guidance of the International Energy Agency (IEA), when the power generation ratio of intermittent energy is less than 15%, the impact on the power grid is small; The power grid has a large impact, and it is necessary to introduce energy storage power sources for peak regulation and frequency regulation; accounting for more than 25%, in order to ensure the stability of the power grid, all power plants must be equipped with energy storage.
The domestic strong allocation policy
Domestic policies are intensively implemented, and follow-up policies are more catalyzed. Since the end of July 2021, domestic policies have been frequently implemented. The guiding opinions propose that the installed capacity will reach 30GW+ in 2025, and the comprehensive market-oriented development of new energy storage will be realized by 2030.
Statistics from the National Energy Administration show that in the first half of 2022, 30.88 GW of newly installed photovoltaic capacity will be installed, of which 8.91 GW of newly installed distributed photovoltaic capacity will be installed in households, a year-on-year increase of 51.5%. The market development is very stable.
Leading the European and American markets
Overseas markets took the lead in bursting, and public projects resonated with the needs of households. In 2020, the U.S. energy storage market will explode and become the third largest energy storage market in the world. Public utility energy storage projects will be implemented in a concentrated manner, which will be an important increase from 2021 to 2024. At the same time, the unstable power supply will stimulate the demand for household energy storage. It is estimated that in 2030 The new energy storage demand in the United States will reach 138GW/441GWh.
FLYT002 New energy storage golden track
In the future, will new energy storage investments be implemented as scheduled, and where will the main driving force come from?
The new energy storage is mainly used for new energy distribution and storage, power-side auxiliary services, grid-side energy storage, and user-side energy storage. According to the data from the Energy Storage Application Branch of the China Electrochemical and Physical Power Industry Association, in the first half of 2022, the new installed capacity of new energy storage accounted for 39%, 30%, 21%, and 9% of the above four applications.
Among them, the main investment entities on the power supply side are thermal power plants scattered in various places. The entities are different, and their investment behavior and the degree of pulling the new energy storage are still unclear.
The grid-side energy storage is related to the investment in the capital construction of the grid. This year’s investment in China’s power grid has increased significantly compared with the previous two years. In 2020, 2021, and the first half of 2022, the year-on-year growth rate of China’s power grid capital construction investment was -6.2%, 1.1%, and 9.9%, respectively. However, the power grid investment focuses on UHV construction and pumped storage construction, and it is not clear to what extent it will drive investment in new energy storage. In the first half of 2022, the newly installed capacity of energy storage on the grid side in China increased by 30.52% year on year.
User-side energy storage mainly refers to the installation of new energy storage systems by industrial and commercial enterprise users, and the use of peak-valley electricity price difference for arbitrage. However, the main body of energy storage investment on the user side is industrial and commercial enterprises, and its investment motivation is affected by changes in the price difference between peak and valley and is also limited by the imperfection of the current Chinese electricity market system. At present, the driving force for new energy storage is not strong. In the first half of 2022, the newly installed capacity of new energy storage on the user side in China decreased by 0.02% year on year.
In the short term, new energy distribution and storage have the greatest driving force for investment in new energy storage. In the first half of 2022, the newly installed capacity of new energy storage in this field increased by 128% year-on-year, and the growth trend is also very clear.
- On the one hand, in the field of new energy, the application of new energy storage has received strong policy support.
Since the second half of 2021, local governments have successively introduced policies to link new energy investment with energy storage investment, requiring mandatory allocation of new energy projects, or encouraging allocation and storage by giving a skewed score during project approval.
Most provinces require new energy power generation projects to be equipped with energy storage, the proportion of which is not less than 10% of the installed capacity of power generation projects, and the continuous energy storage time of energy storage equipment should be more than 2 hours. In Inner Mongolia, Hunan, Henan, Guangxi, and other places, the required allocation, and storage ratio reaches 15%-20%.
- On the other hand, China’s new energy installed capacity and investment have grown rapidly.
In the first half of 2022, the cumulative installed capacity of wind power and photovoltaic power generation in China increased by 17.2% and 25.8% year-on-year, respectively, reaching 342 million kilowatts and 337 million kilowatts. According to the “14th Five-Year Plan for Renewable Energy Development” jointly issued by nine ministries and commissions including the National Development and Reform Commission and the National Energy Administration in June 2022, by 2025, the total installed capacity of wind power and photovoltaic power generation in China will reach more than 1.2 billion kilowatts. , double the current increase.
FLYT003 Photovoltaic market trillion blue ocean
“Photovoltaic + energy storage” has become the standard configuration of photovoltaic development in many countries, and energy storage will bring long-term sustainable development momentum to photovoltaics. Globally, it is estimated that the newly installed photovoltaic capacity will reach about 450GW in 2025, and the newly installed photovoltaic capacity will reach about 1300GW in 2030.
Photovoltaics will gradually grow from auxiliary energy as the main energy, bringing a broad growth space for the industry. Due to the excellent photovoltaic resource endowment and the arrival of photovoltaic global parity, the cost is still falling rapidly, and matching the development of energy storage, the realization of carbon emission reduction and carbon neutrality goals, the reduction of power industry emission reduction, and the improvement of power generation structure need to rely on low-cost and high-efficiency photovoltaics To achieve this, photovoltaics will grow from auxiliary energy as the main energy source, bringing broad growth space for the industry.
China’s PV investment is currently growing rapidly. In 2021, China’s photovoltaic capital construction investment completed a year-on-year increase of 34.9%, and in the first half of 2022, the year-on-year growth rate increased significantly to 283.6%.