[SMM Analysis] 5G Base Station Construction ushered in Rapid growth of Energy Storage Battery Market will usher in dividend period

SMM11, March 21: with the continuous development of communication technology, China has officially entered the 5G era in 2019. The 5G era will not only enrich people's lives, but also greatly improve the efficiency of industrial production. 5G technology brings a lot of benefits. However, the dissemination of information through 5G technology, the first to bring about changes in the industry is the communication base station industry, whether the base station communication equipment Noumenon, or to provide support for the battery energy storage system, will usher in a new dividend period.

5G base station is mainly divided into macro base station and micro base station, micro base station subdivision can be divided into: micro base station, skin base station, flying base station.

Among them, the need for energy storage battery equipment is the macro base station centrally built by China Iron Tower Company, while the micro base station generally uses municipal power direct power supply and does not set up electric energy storage equipment. There are 4.78 million 4G macro base stations in China.

SMM believes that from 2020 to 2021, first-tier cities will usher in a full explosion of 5G base stations. By the end of September 2019, 86000 5G base stations had been opened nationwide, and it is estimated that there will be more than 130000 by the end of the year. Among them, by the end of 2019, Beijing will build more than 10,000 5G base stations and achieve 5G network coverage in key functional areas in 2021. Shanghai plans to build 10,000 5G base stations in 2019, 20,000 in 2020, and 5G full coverage in 2020. Guangzhou has a clear target of not less than 20, 000 5G base stations in 2019, 65000 5G base stations will be completed in 2021, and 5G networks will be continuously covered in the main urban areas and key areas in 2021. Shenzhen plans to build a total of 15000 5G base stations by the end of 2019 and achieve 5G network coverage by the end of August 2020. Wuhan plans to build more than 20,000 5G base stations in 2021 and achieve full coverage of 5G urban areas in 2021; Hangzhou plans to build 10,000 5G base stations in 2019 and achieve full coverage of 5G signals in Hangzhou urban areas in 2020.

How much demand for energy storage batteries can be brought about by the surging demand for 5G base stations? According to SMM, China Telecom, Unicom's 5G base stations will be more than twice the current number of 4G base stations, while China Mobile will be more than four times the current number. According to the 2018 annual report of operators, at least 14.38 million base stations in China need to be built or renovated. Because of the sharp increase in energy consumption of 5G base stations, that means there are 14.38 million backup energy systems that need to be improved. According to the 5GC-band single station power consumption 2700W, emergency often 4h to calculate, the market at least there is room for 155GWh batteries.

What kind of battery is the market demand for this 155GWh?

SMM believes that because of the dense layout of 5G base stations, concentrated in prosperous areas, base stations require small, lightweight, operators are now switching from lead acid to lithium batteries with higher energy density, most of which use lithium iron phosphate batteries as backup batteries.

In 2018, China's iron towers have stopped purchasing lead-acid batteries and unified procurement of step-by-step batteries. As the largest user of retired power battery echelon utilization industry, China Iron Tower uses lithium battery about 1.5GWh in 2018. At present, China's iron towers have achieved large-scale supply in 31 provinces, and 200000 base stations across the country use 2.5Gwha batteries, which is equivalent to the battery capacity of 60, 000 electric vehicles. According to its plan, the use of echelon batteries is expected to be about 5GWh in 2019. China's iron tower in the base station energy storage battery supporting construction mainly has the following ways to use the battery.

One is to reassemble. The recovered retired power battery package is separated, and the remaining capacity of each lithium cell is evaluated. According to the test results, the lithium battery with the same capacity is reassembled into a standard 48V communication base station PACK.

The second is the direct combination of battery modules. Battery factory or PACK factory assembles directly according to the type of battery module, such as 8 / 8, 12 / 4, 4 / 4 / 4, etc.

The third is to use the whole package. That is to say, it is used directly after purchasing the retired power battery package, no longer disassemble and reorganize, and will not be combined. This model is still in the pilot stage.

SMM believes that with the acceleration of the construction process of 5G base stations, the demand for primary and retired lithium iron phosphate batteries will increase significantly, driving the demand for lithium iron phosphate materials upstream. According to the SMM New Energy Database, the national output of lithium iron phosphate may reach 98000 tons in 2019, up 51% from the same period last year. Lithium iron production may continue to grow rapidly in 2020.

SMM Cobalt Lithium Research team

Hong Lu 021-51666814

Qin Jingjing 021-51666828

Cui Binhui 021-51666780

Wuyang 021-51666818

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