From 2011 to 2019, my country’s energy storage industry has developed rapidly, and the rapid development of energy storage is inseparable from the support of major power generation companies and policies. After a short period of decline in 2019, the energy storage sector has ushered in a new inflection point in market development with the support of domestic grid-side reforms and policies. Entering 2020, the market only has obvious changes in the field of electrochemical energy storage. The newly tendered base station energy storage and wind power projects in China have clearly stated that lead-acid batteries will no longer be used. It is predicted that the installed capacity of electrochemical energy storage in China will be It will be close to 80Gwh, and lithium battery energy storage will account for more than 95% in the next few years. At the same time, it will also open up a new broad blueprint for lithium iron phosphate batteries.
The promising future development space of electrochemical energy storage in my country
The types of energy storage in my country are diverse. In 2019, the cumulative installed capacity of energy storage projects in operation in China was 180Gwh, of which pumped energy storage accounted for 93.4% and still dominated. The total installed capacity is 4.5%. Pumped hydro storage is still the most mature and economical energy storage technology. It is widely used in system peak regulation, frequency regulation and backup. The dominant position of pumped hydro storage in energy storage applications will not be shaken in the short term.
| Storage energy | Storage energy type | Advantages | Disadvantages | Applicants |
| physical energy storage | pumping | mature technology low cost Large energy storage capacity Long lifespan | High resistance to the environment | peak shaving backup power |
| chemical energy storage | lithium battery | High power Good cycles | High cost Small lifespan | UPS Backup |
| other | superconducting energy storage | Quick response High efficiency | High costs Low density | UPS |
The electrochemical energy storage unit has high cost and insufficient economy, but it has higher efficiency, flexible configuration, and faster response than physical energy storage. The advantages are becoming more and more obvious, and it has gradually become the mainstream of newly installed energy storage capacity, and there is still a large room for cost reduction in the future, and the development prospect is broad.
In 2020, with the domestic grid-side reform and policy support, while maintaining steady development of domestic electrochemical energy storage, some projects planned in 2019 but not yet constructed due to policy influences will be implemented. The scale will reach 15Gwh.
It is imperative to replace lead-acid batteries with lithium batteries
Our country’s lead-acid battery technology is mature, and it is also the world’s largest lead-acid battery producer and lead-acid battery consumer. Battery materials come from a wide range of sources and have low cost. The disadvantages are that the number of cycles is small, the service life is short, and improper handling in production and recycling links can easily pollute the environment.
Due to the high cost of electrochemical energy storage in the early stage, China’s domestic energy storage projects are mostly government projects, and lead-acid batteries were mostly used in the early days. Long, wide applicable temperature range and other characteristics, and gradually replace the lead-acid battery energy storage. According to statistics from Xinyu Information, in 2019, the cumulative installed capacity of electrochemical energy storage in China was 8.1Gwh, a year-on-year increase of 55.7%, and continued to maintain a rapid growth momentum. Among them, lithium-ion batteries accounted for 81% of electrochemical energy storage, and lead-acid batteries fell to 18%.
Compared with electrochemical energy storage of different technical routes, lithium battery energy storage technology has the advantages of large scale, high efficiency, long life, low cost, and no pollution, and is currently the most feasible technical route.
| Energy storage type | Lead-acid battery | Lithium battery | Lead carbon battery | flow battery | sodium sulfur battery |
| Typical Rated Power | KW-50MW | KW-MW | KW-50MW | 5Kw-20Mw | 100Kw-200Mw |
| Rated Capacity | 1sec-3hour | Min-Hour | 1sec-3hour | 1-20hour | few hours |
| Response Time | hundred milliseconds | hundred milliseconds | hundred milliseconds | hundred milliseconds | hundred milliseconds |
| Cycle times | 500-1200 | 1000-10000 | 1000-4500 | >12000 | 2500-4500 |
| Cycle efficiency | 75% | 90% | 90% | 80% | 85% |
| Advantages | Mature technology and low cost | High specific energy, no memory, large capacity, no pollution | Cost-effective and consistent | Long life, 100% depth, high efficiency | High specific energy, high specific power |
| Disadvantages | Short life, not environmentally friendly | Short life and poor safety | Small specific energy, not environmentally friendly | Low energy storage density and high price | high temperature conditions |
| Application | Telecom | Backup | Backup | Backup | Backup |
Compared with other energy storage batteries, lithium batteries have the longest cycle life and the highest cycle efficiency. With the continuous improvement of lithium battery technology, the battery life is constantly improving, which makes the application potential of lithium batteries in the field of energy storage continue to increase.
Lithium batteries have good rate performance and are relatively easy to prepare. In the future, the shortcomings of improving high temperature performance and poor safety performance are more conducive to application in the field of energy storage.
Compared with lead-acid and lead-carbon batteries, the pollution-free nature of lithium batteries is more in line with environmental protection requirements, and the high price of flow batteries makes lithium batteries a more suitable clean energy source.
In addition, the global lithium battery energy storage system technically accounts for a much higher proportion of other battery energy storage systems, which also lays a good foundation for lithium-ion batteries to become the mainstream of energy storage in the future.
The cost of lithium batteries has fallen, and the advantages have become prominent
As the price of lithium batteries continues to decline, entering into 2020, the base station energy storage and wind power projects newly tendered in China have clearly stated that they will no longer use lead-acid batteries. It is expected that the proportion of lithium batteries will continue to rise close to 100% in the next few years.
From the perspective of the cost structure of the energy storage system, the cost of the battery system accounts for about 53%. Taking the most widely used lithium-ion battery as an example, lithium iron phosphate batteries are mostly used in energy storage projects. Compared with ternary lithium batteries, the mainstream batteries used in vehicles, lithium iron phosphate batteries have the advantages of lower cost and longer life, and are more suitable for use in energy storage systems.
At present, the domestic mainstream lithium iron phosphate battery pack price is about 0.6-0.7 yuan/Wh, aside from the PACK cost of about 0.1 RMB/Wh, the actual gross profit margin level of energy storage lithium battery products can still be maintained between 20-30%.
The cost of domestic flow batteries is generally twice that of lithium batteries, mainly due to the high price of raw material vanadium pentoxide. At present, the domestic price of vanadium pentoxide is as high as 120,000 RMB/Ton, and the historical high price has reached 600,000 RMB/Ton.
The mainstream price of lead-acid batteries is 0.4-0.5 RMB/Wh. Although the price of lead-acid batteries is slightly lower than that of LEP batteries, in terms of performance, the cycle life of lead-acid batteries is only 1000-1200 times, and the cycle life of lithium iron phosphate batteries is 1000-10000 times. (attenuates to 70%). Based on 7000 cycles, the lead-acid battery needs to be replaced about 6 times, while the lithium iron phosphate battery does not need to be replaced.
After testing, the new iron-lithium battery of each 5G base station can perform two complete peak-to-level-to-valley switching every day, which can save electricity costs of 10,400 RMB per year, which is 2,554 RMB per year more than lead-acid batteries.
Lithium iron phosphate battery – the king of my country’s lithium battery energy storage market
From the perspective of lithium battery energy storage layout, the current demand for energy storage projects in overseas markets is mainly on the user side. At the same time, European and American countries pay more attention to environmental protection and are extremely repulsive to lead-acid batteries, which drives overseas companies such as Samsung SDI, LG Chem and Panasonic. For the large-scale application of batteries in the field of energy storage, these overseas companies have not yet deployed lithium iron phosphate battery projects, and currently all use ternary batteries. The energy storage batteries used in the domestic market are almost all lithium iron phosphate batteries, mainly because ternary batteries have higher cost and poorer safety than lithium iron phosphate batteries.
In the first half of 2020, under the sluggish new energy market, the lithium battery energy storage market performed well. China Railway Tower and China Mobile successively bid for lithium iron phosphate backup energy storage batteries with a total scale of 4Gwh. The scale of grid-side energy storage and wind-solar-storage integrated lithium battery energy storage projects is 2.5Gwh. These projects all use lithium iron phosphate batteries, which has promoted a significant increase in the domestic market demand for lithium iron phosphate batteries.
In the first half of 2020, the number of energy storage orders from Yiwei, Ruipu, Nandu, Haisida and other companies increased significantly; Guoxuan Hi-Tech, driven by Huawei’s base station and wind power energy storage orders, has full production of lithium iron phosphate batteries. The output of iron-lithium materials has reached a record high; at the same time, boosted by the energy storage bidding projects of China Mobile and China Railway Tower, the orders of domestic dry-process diaphragm enterprises have increased significantly; the growth point of domestic market demand for anode materials is also concentrated in energy storage and small power venues.
In the long run, lithium batteries have obvious advantages in electrochemical energy storage, while lithium iron phosphate batteries have obvious advantages in cost and cycle performance compared to ternary batteries. No matter from the current application situation and development trend, the main energy storage market in the future. The growth lies in the lithium iron phosphate battery, which is expected to become the king of the domestic lithium battery energy storage market.
