Energy storage has always been regarded by industry leaders as a blue ocean with great development prospects in the future. As early as 2016, Huang Shilin, vice chairman of CATL, said that the market size of energy storage in the future may even exceed that of power batteries, and it can even be measured by the output value of trillions. But for a long time, the application of lithium batteries in the field of energy storage has not been widespread. Ningde era officially involved in energy storage earlier than power batteries. As early as 2011, ATL, the predecessor of the CATL, won the bid for the high-profile Zhangbei National Wind and Solar Storage and Transportation Demonstration Project at that time. The winning bid was a 4MW×4h lithium iron phosphate battery system. However, it was not until 2018 that CATL began to set up an energy storage business unit and listed energy storage as a key development business. Prior to this, CATL's record in the field of energy storage was far inferior to its performance in the field of power batteries. The reason is that lithium batteries still lack sufficient support advantages in technology and cost, and the market environment for energy storage was immature at that time.
"The core logic of the energy storage market is that cost reduction drives the large-scale application of energy storage products." Some industry analysts said that as more and more lithium battery companies enter, energy storage technology is expected to achieve rapid iteration, and costs may continue to decline. , The energy storage market will also usher in a rapid growth cycle. As pointed out by industry analysis, cost reduction is a driving force to promote the market and applications, and China's energy storage cost is a weather vane for the global energy storage industry to reduce costs. In recent years, the large-scale development of power batteries has led to a rapid decline in the cost of energy storage systems. By 2020, driven by the scale effect, the average battery cost can be reduced by another 10%, which is a large-scale lithium battery in the field of energy storage. The application has laid a solid foundation. At the policy level, energy storage has also received strong support from the state.
From the application side, energy storage and new energy vehicles have very different battery performance requirements. Energy storage batteries require longer life and safer, while automotive power batteries require smaller volume and energy on the basis of safety. The density is higher and the power characteristics are better. In terms of battery types, lithium iron phosphate batteries with longer life and safer are more suitable for energy storage, and the technology is very mature.
Generally speaking, lithium batteries used in the field of energy storage generally require more than 3500 cycles, that is, the life span of lithium batteries for energy storage is greater than 10 years. The cycle number of lithium iron phosphate batteries is much higher than that of lead-acid batteries and ternary batteries, and the cycle number can reach more than 7000 times. Moreover, the current price of lithium iron phosphate batteries is about 0.6/Wh. With the sharp drop in raw material prices and technological progress, the cost-effectiveness of lithium iron phosphate batteries is getting higher and higher.
The proportion of electrochemical energy storage in my country has been increasing in recent years. In particular, the 5G investment of the three major operators in 2020 has doubled compared to 2019. With the outbreak of the 5G base station energy storage market, it is expected that the demand for lithium iron phosphate batteries will increase substantially. It is predicted that the demand for lithium iron phosphate batteries for newly built and renovated 5G base stations in 2020 will reach 10GWh. Guosen Securities believes that with the support of domestic grid-side reforms and policies, the turning point of my country's energy storage is at hand. In the future, lithium iron phosphate batteries are expected to become the main battery supply direction for energy storage.
