Recently, AT&S signed a strategic cooperation agreement with Ningde Times, in which the two sides will cooperate in energy storage business. In fact, in September last year, BYD made a strategic investment in Atos, and energy storage is an important point of cooperation between the two sides.
Photovoltaic and lithium companies in the energy storage business strategic cooperation, is not unfamiliar. in May 2019, Trina Solar and Peng Hui Energy established a joint venture company. In June this year, Lingyang Energy and Yiwei Li-energy announced the establishment of a joint venture company. In August this year, JinkoSolar signed a strategic cooperation agreement with Ningde Times to jointly promote the energy storage business.
In the early stage of the outbreak of energy storage business, especially the market potential of the huge PV side of the energy storage, whether 2B large-scale energy storage, or 2C home energy storage, PV and lithium giants have entered the field, as common players, both competitors and partners.
How to see such competition and cooperation? This is an important topic for the strategic decision of PV and lithium enterprises, and also a key point to study and judge the future development direction of energy storage industry.
Industry chain relationship
First of all, we need to accurately understand the industry chain relationship between lithium, PV and energy storage (here only refers to electrochemical energy storage).
About the energy storage business, this public number has done a series of introduction and analysis, focusing on reference to October 17, 2020 "energy storage industry: near the tipping point of ignition" and January 7, 2021 "the jungle of energy storage", here to borrow one of the graph.
Energy storage, as a brand class system integration business, is an independent business, with lithium companies as its important upstream suppliers and PV companies as an important channel provider of PV-side energy storage in the market segment. Both have a unique advantage in getting involved in the energy storage business.
Take Ningde Times as an example, as a lithium company, it provides standardized battery packs or customized energy storage systems to downstream energy storage companies, and is a product provider, but as an energy storage company, it delivers energy storage systems to downstream investors or developers, and is a brand name for end users.
Since energy storage is an independent business, it needs to have independent product power (mainly electrical system integration capability), brand, channel, financing, construction, operation and after-sales service capabilities or resources, these capabilities and resource endowments are very unique, and different from lithium and photovoltaic business.
In other words, not any lithium enterprise or photovoltaic enterprise has the ability to directly carry out energy storage business.
Short-term cooperation is the main
Lithium enterprises are the upstream of the energy storage business, and are the core suppliers of energy storage systems. Lithium enterprises hold important core resources and system integration capabilities, and have unique advantages in energy storage system delivery.
However, energy storage is only one of the downstream application scenarios of lithium enterprises, similar to another application scenario of electric vehicles. Lithium enterprises to extend downstream, need to build a very strong market capacity, especially 2C business, the brand, channels and after-sales service requirements are high, the difficulty is similar to lithium enterprises to build cars.
For photovoltaic enterprises, especially for the end market components and inverter companies, in the PV side of the energy storage, has an inherent brand and channel advantages, including 2B large energy storage and 2C home energy storage. Belonging to the same market, horizontal grafting related products.
It can be seen that lithium enterprises hold upstream product resources, if they intervene in energy storage, they belong to vertical extension and need to build market capacity; PV enterprises hold downstream market resources, if they intervene in energy storage, they belong to horizontal expansion and need to build product capacity.
In the early stage of the budding energy storage business, whether lithium enterprises, or photovoltaic enterprises, do not yet have the core competitiveness of the complete energy storage industry chain.
Lithium enterprises are still immature in downstream brands and channels, and currently need to use external forces, so it is not difficult to understand Ningde Time and Jinko, Atos to seek strategic cooperation.
Photovoltaic enterprises are not yet familiar with lithium batteries and system integration, which is a different product and system from photovoltaic batteries, and also need to seek strategic cooperation with lithium enterprises from the perspective of supply chain stability, so it is not difficult to understand that Atos, Trina, JinkoSolar and other photovoltaic giants and lithium enterprises for strategic cooperation.
It can be seen that at present, lithium and photovoltaic enterprises are in the early stage of building energy storage business competitiveness, in the PV side of the energy storage business just the right resources and advantages complement each other. The two sides are destined to cooperate more than compete in the short term, and even cooperation is the only option for both sides, and it is difficult to be effective in fighting alone.
Long-term differentiation and competition
Since the cooperation between lithium and photovoltaic enterprises, because both sides of the energy storage business capacity and resources to build an inevitable result of immaturity. Then, as both sides, especially the head of the business scale and business capacity of the maturity of the enterprise, seeking the independence of the industry chain resources and capabilities, and constantly expand the capacity and resources boundary, will be inevitable.
Seeking the independence of the industry chain is not unfamiliar to lithium enterprises and photovoltaic enterprises, and is even engraved in their bones.
In recent years, Ningde Times has built a large "circle of friends" in the lithium industry chain, while also seeking independent development in the energy storage business. 2021 in the first half of the year, Ningde Times energy storage business achieved revenue of 4.693 billion yuan, an increase of 727%. It can be seen that Ningde Times energy storage business, is never simply supply lithium batteries so simple, but for the end market to carry out the strategic positioning of energy storage business, as a typical representative of the lithium system energy storage, and photovoltaic system energy storage is already a direct competitor.
For photovoltaic enterprises, the industry chain security more experienced, this year, the upstream silicon link to the downstream battery and module link of the huge impact, so that the photovoltaic giants have made up their minds to industry chain integration operations.
Photovoltaic energy storage enterprises, especially the head of the enterprise, gradually involved in the upstream lithium battery, to protect the stability of the lithium battery supply chain, will be sooner or later, only the way of intervention, may be the first joint venture and then independent, may also be the first small after large.
Energy storage as a brand class system integration business, the most core competitiveness is the market resources, so with the market resources of the enterprise is more likely to win. In the PV side of the energy storage market, the PV system has an advantage over the Li-ion system.
The future industrial ecology of the energy storage industry is expected to be similar to that of the PV (module) industry. Both are branded system integration businesses, and the upstream and downstream markets of the industry chain are highly similar, firstly, the market is king with products, brands and channels as the core, and secondly, upstream integration ensures supply chain stability.
The energy storage industry is expected to be like the photovoltaic module industry, the concentration will continue to increase, and eventually form a few comprehensive giant and market segment leaders, and only these head enterprises have the ability to integrate the industry chain, after all, lithium batteries are technology-intensive and capital-intensive.
Energy storage industry is still in the early stages of development, whether photovoltaic system or lithium system, do not yet have the perfect business capabilities and industry chain resources, the two in the huge PV side of the energy storage market happens to be inherently complementary, short-term cooperation than competition.
With the continuous development of the energy storage industry, the head enterprise business capabilities and resources continue to mature, in the process of increasing the concentration of the industry will gradually differentiate, business independence will also become stronger, and ultimately competition than cooperation.
