SMM News: in 2009, BYD built the country's first lithium energy storage power station in Pingshan, Shenzhen. In the twinkling of an eye, electrochemical energy storage represented by lithium electricity has a history of ten years in China. In the past ten years, the industry has experienced ups and downs, full of twists and turns and not easy, a large number of practitioners and leading enterprises to promote energy storage from demonstration to the threshold of commercialization.
Ten years is a node and a new beginning. After a decade of long accumulation, especially driven by electric vehicles, the cost of lithium-ion batteries has fallen by more than 85%, and the cost of energy storage systems is only 1/3 of the original.
"people tend to overestimate the changes in a year, and they tend to underestimate the changes in a decade." Current energy storage may be as weak as a spark, but over the next decade, energy storage will undoubtedly grow and reshape the entire energy industry.
Under the global new energy wave, energy storage is becoming a key part of the energy revolution. In the view of many new energy practitioners, the new energy represented by photovoltaic is far from reaching its due height, "new energy + energy storage" will create a greater miracle. With the decrease of cost and the increase of demand, the development of electrochemical energy storage in the world is in the ascendant.
At home, on the other hand, China's energy storage industry is losing this first-mover advantage. Although China is the largest power battery country, the application of battery energy storage market in China is far from mature, especially the construction of market mechanism and policy drive significantly lag behind the speed of industrial application. In 2018, under the guidance of the power grid, although the side storage of the power grid led to the explosive growth of the whole market, the problems that have perplexed the industry for many years have not been effectively solved, and some of them have even intensified, which we call "five mountains".
I. Policy risks
At the end of 2017, since the first guidance on the energy storage industry jointly issued by the five ministries, the heat of energy storage has never been seen before. Optimistic market expectations have led to round after round of "gold diggers", with hundreds of companies large and small in a small industry with billions of dollars in value, and increasingly crowded energy storage tracks with limited downstream application space.
Over the past two years, there have been a wide range of policies at the national level and in various places to come out of Taiwan, but looking through these documents and policies shows that there are too many duplicates, the same sex is too much, and there is a lack of interlinked, step-by-step progressive and continuous policies. Most of them have only made clear the "importance" of energy storage, and there is no matching "practical" policy that can be operated out of Taiwan. So that the industry comments that China's energy storage is in the situation of hot investment, hot research and comments, and the response of the competent authorities is mediocre.
Some local policies or regulations are even more "dazzling." investors are at a loss as to what to do with the administrative adjustment, and there are many difficulties in promoting energy storage demonstration projects. Some local governments are required to put into production in order to pull the GDP, which undoubtedly increases the pressure on the survival of enterprises.
Policy orientation is related to the overall situation of the industry and the life and death of enterprises. At present, the current policy is difficult to promote the industry to achieve substantive results. In the past two years, the enterprises with great investment in the field of energy storage have all encountered financial difficulties, especially the development model of "investment + operation" is that the energy storage manufacturers are overdrawn in the enterprise credit, which increases the operational risk of the enterprise.
From the experience of foreign countries, in the process of promoting the large-scale development of electrochemical energy storage, policy stimulus and market-oriented mechanism are indispensable. At the China Energy Storage Price Innovation and Development Forum held at the end of August 2017, officials from the Price Department of the National Development and Reform Commission said that in addition to subsidies, the government has many means to support industrial development, such as finance, taxation, and prices. are the more common ways of government support. "We agree to adopt a comprehensive approach of finance, taxation and prices to support the development of energy storage." Now that another year has passed, where is the policy?
II. Promotion of Electric Reform and Market Mechanism
At present, both consumer-side and renewable energy are facing the problem of single business model, which many people attribute to the high price of energy storage. In the first scale or the first to reduce costs, the industry has entered the "laying eggs, laying hens" dead cycle.
The reason is that the cost of energy storage is not an obstacle to application, but the mechanism. Energy storage has four or five functions, or more. In the absence of a fair market environment and effect-based price mechanism, the multiple application value of energy storage can not be fully reflected. In the words of Chen Haisheng, chairman of the Zhongguancun Energy Storage Industry Technology Alliance, "it is equivalent to four or five jobs and only one salary."
Without a good mechanism, reducing costs is tantamount to looking for fish. It is understood that at the current electricity price level, customer-side projects have been marginalized, and many projects are even losing money.
Some people in the industry believe that blindly reducing costs will not be able to guarantee the quality of products, and will easily lead to late safety accidents, which is very disadvantageous to the healthy development of the industry. Only when the market has a certain scale, enterprises will naturally drive prices down in the competition, the industry can enter a virtuous circle of development track.
At present, the power auxiliary service market and spot market are still in the primary construction stage in China, and the space for energy storage is still limited. Only Shanxi, Mengxi, Beijing, Tianjin and Tang and Guangdong have opened up the market space of thermal power energy storage and frequency modulation, but the main body participating in frequency modulation is still thermal power units, which is still far from the position of "independent market main body" expected by the industry.
At present, the parties involved in the electricity market are engaged in a game, whether energy storage can play its role or not depends on the final strength of the new electricity reform. If the new round of electricity reform can not establish an effective market allocation of resources, energy storage can only play a limited auxiliary role in some small areas.
III. Orientation and attitude of Power Grid
Energy storage on the side of the grid, the main force of China's energy storage in 2018, suffered a sharp setback in 2019. On April 22, with the National Development and Reform Commission's "measures for Supervision and Review of Power Transmission and Distribution pricing costs (revised draft for soliciting opinions)" came out of Taiwan, the desire of power grid companies to include energy storage in transmission and distribution assets was temporarily dashed.
After the opinion came out of Taiwan, Xia Qing, a professor at Tsinghua University, wrote a long letter to the NDRC to express his objection. Xia Qing believes that the policy should guide the power grid to invest in energy storage rationally. Only when the power grid embraces energy storage technology can energy storage have a future.
The one-size-fits-all policy has caused a lot of controversy. Supporters believe that the power grid companies will focus more on the main business of the power grid, in other non-monopoly and power grid-related auxiliary industries for a comprehensive market, so as to further improve the construction of the power market system. Opponents argue that in the past, all the planning of the power system was designed according to the maximum load, and the greatest value of energy storage in the power grid lies in replacing spikes. If the energy storage can not enter the transmission and distribution assets, we can only force the power grid to invest in more substations, resulting in greater waste, which will eventually be paid for by the whole people.
According to the latest news, the national network in the first half of the work meeting has been clear, the grid side of large-scale energy storage construction has been suspended, has been planned for a number of large-scale grid-side energy storage, now all to stop.
A number of industry insiders believe that the greatest value of energy storage is on the side of the power grid. Although new energy sources and peak cutting and valley filling on the user side will use energy storage technology, only the power grid can integrate these systems, especially large-scale energy storage power stations, because of their fast response speed, accurate control and two-way regulation, can play an important role in peak regulation and frequency modulation and other aspects related to the security of the power grid.
"I am afraid that the power grid will not come, and I am afraid that the power grid will come in disorder." I'm afraid it's the mentality of most energy storage practitioners. The value of energy storage needs to be recognized by the power grid, but it does not want the grid to be involved too deeply. In 2018, the power grid side projects dominated by the State Grid are basically invested and constructed by the subordinate companies of the power grid. At the same time, the power grid has the power of dispatching, causing other market players to worry about unfair competition.
A market calculation data pointed out that the power grid side investment energy storage, the feeder transformation and expansion time limit can be delayed by three years, compared with the construction of substations, the investment construction cost is reduced by about 30%.
In 2019, the load of local power grid repeatedly hit new highs. If the traditional transmission and distribution network is replaced by energy storage with lower cost, higher value and efficiency, how can this part of the value be identified? If it is invested by social capital, is the power grid willing to pay the bill? How should the cost be dredged? It is undeniable that only by allowing energy storage into the power grid can the various values of energy storage be brought into full play, and the every move of the power grid will determine the future trend of the industry to a great extent.
IV. Safety and Standards
Since 2018, the biggest concern of the energy storage industry has been the fires of electric vehicles and energy storage power stations at home and abroad. In particular, the fire in South Korea's energy storage power station can be said to be a "wake-up call" to all countries.
If energy storage is not safe, will it not be developed? For new things, both inside and outside the industry have to allow a trial-and-error process. At present, there are hundreds of thousands of people engaged in lithium power research and development, as long as electric vehicles still have value, technology development to a certain stage, lithium power safety problems must be solved.
Moreover, there is more space for energy storage power stations, and there are more solutions than electric vehicles. "Energy storage is not as sensitive to weight and volume as electric cars. Energy storage power stations can be connected to fire water sources, and there are more measures that can be taken to achieve safety and less cost." Zhang Lilei, founder of Yantai as a new energy source, believes.
In the view of creating new energy, energy storage safety should adhere to the principle of "prevention first, prevention and elimination combination", and the design of the system must take absolute safety as the goal. However, in the process of practice, the fire protection system is still in a marginal position. Some system integrators still keep costs down at the expense of security in order to save costs. As the fire protection system is only a supporting system of the energy storage power station, it is often in the position of party C or party D, so it is impossible to require or advise Party A to configure fire fighting facilities according to this technology.
Throughout the fire accidents at home and abroad, the author believes that there are three major problems in China's energy storage industry that need to be reflected on:
First of all, the state, industry associations and groups should set up more and more detailed standards to regulate the development of the industry, through the standards to raise the threshold of industry access, will be unqualified energy storage manufacturers, clean up the market.
Secondly, the national or industry level should investigate the fire accident of domestic energy storage power station and disclose the cause of the accident to the industry. The occurrence of the accident should play a warning and reference role for the industry, rather than become a tool to spread falsehood, let alone a means to attack each other between different technical routes and competitors.
Thirdly, for many owners and investors, in the case of mixed market, the choice of technical strength, especially in the foreign market after the test of the system integrator is a more appropriate choice.
V. non-technical costs such as financing
Similar to photovoltaic, energy storage is still a grass-roots industry. Enterprise capital reserve is relatively weak, basically facing a certain amount of financial pressure.
The difficulty of financing has become another mountain for energy storage enterprises. Compared with wind power and photovoltaic, energy storage does not have a clear national policy support, banks have higher requirements for credit when carrying out project financing. As an innovative means of financing, financial leasing is playing a more and more important role in the source of funds for energy storage power stations.
According to China Resources Leasing Co., Ltd., according to insiders, the mainstream business of financial leasing institutions is large-scale leasing projects, most of the commercial energy storage projects are still on the small side. For thermal power energy storage joint frequency modulation projects with good profit prospects, the annual interest rate of financial leasing is about 9%.
Compared with the thermal power energy storage AGC field, which has a better profit prospect, the user side energy storage financing is even more difficult. In the case of declining industrial and commercial electricity prices and uneven system integration capabilities, the investment income of many user-side projects is lower than expected. According to the project evaluation report published on the World Bank website, the average financial return on early energy storage projects is between 5% and 7%. In the current financial environment, user-side energy storage projects are difficult to get the favor of financial institutions.
In addition, land taxes and fees, grid testing, power grid access, resale road strips and other intermediate fees also invisibly increased the cost of energy storage investment, these taxes and fees completely "devoured" the thin profits of enterprises. Although the non-technical cost has become one of the main factors restricting the development of the industry, but this part of the cost reduction, enterprises are often powerless, can only rely on the adjustment and standardization of national policies.
"Click to learn more and sign up for the 2019 (9th) Regenerative lead Battery Industry Summit"
Scan QR code and apply to join SMM metal exchange group, please indicate company + name + main business