By 2024, a new round of the cycle has officially entered the orbit, and various offensives in the energy storage industry have been rolled out one after another.
Looking back on 2023, the problem of raw materials that once plagued the development of the industry has been greatly alleviated. Since the beginning of last year, the growth rate of power battery demand has slowed down, and the large-scale expansion of the entire lithium battery industry chain in the past two years has been put into focus, and the materials in each link have declined significantly.
The oversupply is the basis for lithium carbonate for the whole year of 2023. In 2023, the upstream lithium carbonate will exceed 80%, and the downstream battery cells will exceed 50%, and the battery cost reduction will further improve the economy of new energy vehicles and energy storage, and accelerate the continuous increase in the penetration rate of the industry. In late February, lithium carbonate changed its previous downward trend, and the increase gradually expanded, increasing by nearly 30% compared with mid-February.
Figure: Analysis of the supply and demand drivers of the lithium battery industry chain.
As the investment boom in energy storage projects fades, what will be the demand for energy storage in 2024?
This article will analyze the demand and supply side from two dimensions, focusing on the development trend of the industry and the transformation of energy storage technology in the new cycle.
Demand side: The demand for energy storage is strong, and the implementation of going overseas is accelerating
From the perspective of the total market size, the further demand brought by the new energy market still maintains a growth trend. Looking ahead to 2024, global installed capacity demand remains strong. The global demand for energy storage is mainly distributed in China, North America, Europe and emerging markets.
Chart: New energy storage capacity globally in 2024**.
Looking ahead to 2024, TrendForce expects that the global installed capacity of new energy storage capacity is expected to reach 71GW and 167GWh in 24, a year-on-year increase of 36% and 43%.
On the policy side, countries have accelerated the pace of energy transition, and favorable policies for energy storage at the national level will continue to guide the growth of energy storage installations. In addition, the current decline in the raw material end of the industrial chain, the accelerated release of production capacity in each link, and the significant decline in the energy storage system will also further improve the economy of energy storage and promote the growth of installed demand. The policy promotion and the reduction of superimposed costs will further promote energy storage into a substantial growth period. With the end of the adjustment of upstream materials and the end of destocking, it is expected to usher in the rapid shipment of energy storage products.
In addition, from the perspective of "going to sea fever", overseas business has become an important growth strategy for many energy storage companies, and overseas factory construction has gradually become a trend.
With the increase in the safety of the chain and the ability to resist risks, the overseas production capacity of enterprises will form a stronger stickiness with customers, which can enhance the long-term market demand to a certain extent.
At present, the competition pattern of the domestic market presents a mismatch between supply and demand, and with the accelerated penetration of overseas new energy markets and the localization of the industrial chain, the overseas energy storage business still has great development potential. Under the current trend of declining upstream raw material costs and increasing demand for energy storage, overseas orders from energy storage companies are expected to continue to grow.
Supply side: Focusing on cost reduction and efficiency improvement, new technologies are constantly emerging
At present, the electrochemical energy storage technology route has blossomed in many places, and the commercialization progress is accelerating. Low cost and long life are the technical directions pursued by energy storage batteries. Compared with the power battery consumers, they pay more attention to the sense of experience, and the client of the energy storage battery pays more attention to the return on investment, payback cycle, LCOE, initial investment cost, etc. Therefore, the pursuit of low cost and long life has become the main direction of the development of lithium iron phosphate battery technology.
In the context of the industry's supply exceeding demand, new technologies bring about an increase in the value of materials, promote cost reduction and efficiency, and improve economy.
From the perspective of lithium batteries, although the process and product goals pursued by energy storage cells and power cells are different, they are consistent in material system and production equipment. After decades of development, lithium batteries have high technology maturity, complete industrial chain support, and obvious market scale effect. At the same time, lithium iron phosphate batteries have a long cycle life, low cost and high safety, which can meet the energy storage needs of different application scenarios and occupy the mainstream, and special energy storage batteries have already come into being.
In terms of sodium batteries, because their basic principles are consistent with lithium batteries, the production lines are shared, and sodium resources are abundant, which has a material cost advantage. The commercialization of sodium-ion batteries is accelerating, and 2023 will also become the first year of mass production, which is expected to usher in rapid development with the optimization and upgrading of performance and the maturity of the industrial chain.
Since CATL released the first generation of sodium-ion batteries in July 2021, the commercialization process of sodium batteries has accelerated, and in 2023, sodium batteries announced their first models, which are being implemented with customers.
On October 27, 2022, the sodium electric pilot line of Transart Technology was successfully put into operation, and the first phase of 4The 5GWh mass production line was successfully put into operation, and at the same time, 30,000 tons of cathode materials per year, 40,000 tons of anode materials per year and 150,000 tons of electrolyte were installed to build an integrated industrial development model.
On November 29, 2022, the world's first GWh sodium-ion battery production line of Zhongke Hai Na (Fuyang) rolled off the production line, which is expected to expand to 3GWh-5GWh in 23 years, and is expected to complete the implementation and use of 100MW sodium-ion battery energy storage system.
In addition, China Energy Construction Anhui Institute won the bid for the EPC project of Three Gorges Energy's Anhui Fuyang energy storage system, which is currently the largest sodium-ion energy storage battery project in China, containing 270MW 540MWh lithium iron phosphate battery and 30MW 60MWh sodium-ion battery, which have been put into operation on June 28, 2023.
Supply and demand are booming, and the commercialization process of sodium-ion batteries has ushered in an inflection point.
In the case of vanadium batteries, the electrolyte is an aqueous solution, which has high safety and excellent cycle life. The output power and energy storage capacity of all-vanadium flow battery can be independent of each other, the longer the energy storage time, the greater the cost of a single kilowatt-hour of electricity, the cheaper, very suitable for large-scale long-term energy storage, obvious economic benefits, is expected to fully benefit from the development of long-term energy storage.
With the continuous increase in the proportion of new energy and the gradual iterative evolution of the traditional power grid structure of the new power system, the demand for energy storage will grow rapidly in the long term. Lithium battery is still the mainstream technology of electrochemical energy storage, suitable for short- and medium-term grid energy storage and household energy storage, and the long-term energy storage demand of the power grid is poised to develop, and long-term energy storage routes such as vanadium flow, gravity, and air compression are expected to become the first year of rapid development in 2024.
Considering the underlying logic of industrial development and the current market performance, it is expected that the industry growth rate will gradually slow down in 2024, and the market will gradually return to rationality.
*: TrendForce Energy Storage Finishing.