What is the global energy storage market like

What is the global energy storage market like
Affected by the Ukrainian-Russian War, there was a gap in the supply of petrochemical energy in Europe, and the price of traditional energy soared.
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    Affected by the Ukrainian-Russian War at the beginning of this year, there was a gap in the supply of petrochemical energy such as natural gas in Europe, and the price of traditional energy soared. It also accelerates the transformation of energy independence and diversification in various countries, and correspondingly increases the demand for renewable energy. Among them, due to the short construction period and flexible application scenarios, photovoltaic + energy storage applications have become the first choice of the government and the private sector.

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    The global energy storage market is booming

    The core driving force of the European household storage market from April to June 2022 lies in the household storage economy and installed capacity data. The intensified conflict between Russia and Ukraine, the rise in electricity prices in Europe, the economics of household storage have become prominent, and the bright inverter shipment data have made the market reach a consensus on the high prosperity of European household storage.

    In terms of government policies, the European Union has made a large-scale layout for the photovoltaic market this year, and many plans such as REPowerEU, EU Solar Energy Strategy, European Solar Rooftops Initiative, European Solar Initiative, etc. were proposed in the first half of the year. At the same time, the European Union aims to reach 320GW in 2025 and 600GW in 2030, and the target for the proportion of renewable energy to increase to 45%. Because of this, despite the price increase in the photovoltaic supply chain this year, which has significantly increased the cost and price of modules, the demand for photovoltaics in Europe has still increased significantly.

    The global energy storage market is booming

    The core driving force of China’s large reserve market lies in policy promotion. In July, the Chinese government issued a policy to clarify the market position of independent energy storage and the price mechanism and business model to be explored for new energy storage. Superimposed with the bidding data that has risen sharply since September, the market has gradually digested differences and began to pay attention to China’s large reserves.

    Energy storage is a part of “storage” in the source-load-grid-storage system of the new power system, and it is an important measure to ensure the safe and stable operation of the power system. Under the background of the current tight supply of traditional energy and the accelerated transformation of clean energy, China’s large storage, the United States’ large storage, and European household storage are expected to continue to increase in volume, driving the continued rapid growth of global energy storage demand.

    In 2023, the global energy storage market will continue to grow rapidly, and the demand for new energy storage capacity is expected to exceed 160GWh. It is estimated that the global demand for new energy storage capacity will reach 82GWh, 168GWh, 253GWh and 384GWh in 2022-2025, respectively, with a compound annual growth rate of 90%.

    Changes in global energy storage demand

    China’s photovoltaic distribution and storage is expected to increase demand by 38GWh in 2023. The mandatory allocation of wind and solar energy storage is an important driving force for the development of energy storage in China. Since 2021, the bottleneck of silicon materials has restricted price-sensitive centralized photovoltaic installations, thereby limiting China’s demand for large storage. In 2023, the supply restriction of silicon material will be opened, and the actual output is expected to reach 1.4 million tons. Drive the price reduction of the main photovoltaic industry chain, and fully release the demand for centralized photovoltaic and supporting large storage.

    Changes in global energy storage demand

    In the second half of 2022, the scale of winning bids for energy storage projects in China will increase significantly. By the end of November, the scale of winning bids for energy storage EPC has reached 29.7GWh, with an average bid price of 2.04RMB/Wh. It is estimated that in 2023, China’s demand for large storage capacity will reach 38GWh. In addition, China’s policies are frequently issued, the business model of large-scale storage is closed, and the economics of energy storage are beginning to emerge.

    According to China’s corresponding policies, the large storage business model has achieved a closed loop. Take the fast-growing independent energy storage in Shandong as an example: independent energy storage can continue to earn income through capacity leasing, capacity compensation, and spot market transactions. It is expected to achieve an internal rate of return of more than 7%, and the economy of energy storage is beginning to show.

    The United States has the largest energy storage market in the world, with 8.7GWh of newly installed energy storage capacity in 2021, accounting for 76% of the total. In the first half of 2022, limited by the “double anti-dumping” policy and the price of upstream raw materials, the large storage capacity in the United States fell short of expectations. As the United States suspends the “anti-dumping” policy, the backlog of demand for photovoltaic distribution and storage is quickly released. In August, the U.S. government introduced the IRA Act, which expanded the projects applicable to the ITC policy to independent energy storage, while increasing the intensity and duration of the ITC policy.

    The tax credit policy continue to stimulate the growth of energy storage demand
    The market-oriented mechanism and tax credit policy continue to stimulate the growth of energy storage demand. It is estimated that the demand for new capacity of on-meter energy storage in the United States is expected to reach 35GWh in 2023. China’s high-quality iron-lithium energy storage battery companies and cost-effective integrators will continue to benefit from the large storage market in the United States.

    Competitive landscape for energy storage is good

    The energy crisis has led to high electricity prices in Europe, and the economy of household storage has become prominent. It is expected that the space will double in 2023, and the high prosperity will continue. In the past two years, the global energy crisis and the conflict between Russia and Ukraine have led to a continuous rise in electricity prices for European residents, and the current spot electricity price in Europe is still more than 0.3 euros/kWh. Under the high electricity price, the return rate of household solar storage system is considerable, and the economy is prominent.

    According to the data, the penetration rate of household savings in Europe is 8%, and only a few countries such as Germany and Italy have a penetration rate of more than 10%, and there is still a lot of room for improvement. The European energy crisis is difficult to solve in the short term and the penetration rate of household savings is still low. The high growth in 2022 is not an accidental event, and the boom will continue in 2023. 

    According to the data, the installed capacity of household storage in Europe will be about 3GWh in 2021, and the capacity demand is expected to exceed 14GWh in 2023, doubling in the past two years, and the growth rate will not decrease. Overall, the global energy market will continue to thrive under the impetus of energy transformation.

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