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Monday to Friday: 7AM - 7PM
Weekend: 10AM - 5PM
For 2022, many industries may still have lingering fears. But at least for photovoltaic and its associated photovoltaic energy storage industry, the growth rate in 2022 is far higher than expected.
According to statistics, in 2022, the new installed capacity of PV will be 87.41GW, with a year-on-year increase of 60.3%, ranking first among all major power sources. According to the energy storage data of Gaogong, the global energy storage battery shipments will reach about 125GWh in 2022, with a year-on-year increase of more than 160% compared with 48GWh in the previous year.
Of course, the energy storage battery is not only used for photovoltaic energy storage, but also not limited to the form of photovoltaic energy storage. In fact, since the proportion and duration of PV distribution and storage in China are still low, the growth rate of energy storage will also have the potential to be much higher than the new installed capacity of PV.
According to the statistics of IHS and IEA, the cumulative proportion of PV distribution and storage in the world has increased year by year in the past decade, and the penetration rate of PV distribution and storage will only reach 5.7% in 2021, which is still at a low level. From the perspective of subregions, only a few European regions such as Italy and Germany have a penetration rate of more than 10%; The proportion of PV distribution and storage in China and the United States is less than 10%.
In this regard, some institutions believe that the energy storage will be more than doubled in the next three years. According to the calculation of Xinda, the new installed capacity of energy storage in China will be 13.97GW/26.85GWh in 2023, with a year-on-year increase of 123.3%. The new installed capacity in 2025 will be 353.73GW/109.64GWh, and the CAGR in 2021-2025 will be 119%.
Because the proportion of photovoltaic distribution and storage in China and the United States is relatively low, the rapid growth in the field of energy storage is not limited to China. According to the data of WoodMac, an American consulting agency, the new installed capacity of energy storage in the United States reached 5.01 GWh in the first half of 2022, achieving an increase of more than 200%.
However, the scale of China’s energy storage market is also larger, and the impact of its future growth changes on the entire photovoltaic energy storage industry chain will not be “ripples”, but towering waves. According to statistics, in the photovoltaic field only, in 2022, a total of 18 provinces and cities have completed the allocation of more than 155GW of photovoltaic indicators. If the allocation of energy storage is carried out at the ratio of 10%/2 hours in most regions, it will generate at least 15.5GW/31GWh of energy storage demand. This has not yet calculated the energy storage demand of wind power, power grid and other source networks.
At this scale, the energy storage battery business has even become the “second growth pole” that power battery enterprises value most. According to the data of the Institute of Advanced Industry (GGII), the shipment volume of China’s lithium energy storage battery will reach 125GWh in 2022, 180GWh in 2023 and 390GWh in 2025. The shipment volume in 2022 will far exceed the energy storage demand of 31GWh in the above analysis, because a large part of the energy storage battery will be exported to overseas markets.
And major institutions are also very optimistic about the photovoltaic and energy storage market in 2023. According to the 2023 Energy Storage Industry Strategy Report of China Post Securities, the total global energy storage demand will reach 188GWh in 2023, with a year-on-year increase of 60% – 94% in China, 57% in the United States and 5% in Europe.
Photovoltaics are making great strides
For China’s photovoltaic industry, 2023 will be a year of rapid progress, which is already a matter of certainty.
Because PV can be built in most areas of China – PV is not only suitable for large-scale construction in the northern rainless areas or the Gobi desert areas, but also suitable for PV construction in the southern rainy areas. It seems that the solar energy resources in the south are relatively poor, but more rain washing can just keep the solar panels clean and maintain the photoelectric conversion efficiency in a high range, which also has the advantages of building photovoltaic.
In particular, after the issuance of the Notice on the County-wide Roof Distributed Photovoltaic Development Pilot Program issued by the National Energy Administration in June 2021, from the second half of 2021, the county-wide distributed photovoltaic projects have been invited for bidding, started construction, and connected to the grid. Even some counties and districts not included in the pilot list are also organizing the implementation of the county-wide photovoltaic development. By 2022, under the construction of distributed photovoltaic+centralized photovoltaic power stations in the whole county, China’s land, regardless of the north, south, east and west, and enterprises, whether central state-owned enterprises or private enterprises, will rapidly attack in the photovoltaic field.
According to the data of the National Energy Administration, by the end of 2022, China’s total installed capacity of photovoltaic power generation reached 392.61GW, ranking third only after thermal power and hydropower (413.50GW). Under the rapid progress, some industry insiders predict that by the end of 2023, the new installed capacity of domestic photovoltaic power generation will exceed 100GW, and the total installed capacity is expected to exceed 500GW, and will surpass hydropower to become the second largest power source in the country.
However, the growth rate will exceed 60% in 2022. Even if the new installed capacity in 2023 exceeds 100GW, it may be difficult to maintain the year-on-year growth rate in 2022. Is PV going to enter a stable development period?
Of course, the annual growth rate of more than 60% is too fierce. Compared with the national annual growth rate of more than 60% in 2022, the “five-year doubling plan” proposed by some places appears more stable. For example, the “Fourteenth Five-Year Plan” for the development of renewable energy in Zhejiang Province clearly proposes to implement the “plan of doubling the scenery”. However, when many cities and counties in Zhejiang Province put forward their own growth plans, they are often more aggressive than at the provincial level, and even put forward “double growth plans”.
For example, in April 2022, Xinchang County issued the Opinions on the Implementation of Photovoltaic “Double Multiplication” in Xinchang County (2022-2025), which proposed that the new photovoltaic installed capacity in the “Fourteenth Five-Year Plan” should be more than 160000 kilowatts, and the total photovoltaic installed capacity in the whole county should reach 240000 kilowatts by the end of 2025 (the cumulative photovoltaic installed capacity at the end of the “Thirteenth Five-Year Plan” should be 78000 kilowatts).
The Chinese style of “being in the business” is for the government to superimpose the huge benefits of photovoltaic energy storage under the market economy, which drives many enterprises to participate, including the “five power generation” of the State Power Investment Corporation, China Huaneng, the National Energy Group (the National Energy Investment Corporation), China Datang and China Huadian, and the “six power giants” of China Nuclear Power Group, China Guangxin Group, China Resources Power, China Investment Power, China Energy Conservation and Three Gorges Group, There are grid-end enterprises such as the State Grid, as well as more central state-owned enterprises such as China Coal Group, China Anneng Construction Group, Bank of China Financial Leasing, Henan Construction Group, as well as traditional photovoltaic enterprises such as Chint, Jingke Technology, Sunshine New Energy, Longji, and other new energy power pool enterprises such as Ningde Times. Projects often involve both photovoltaic and energy storage.
The larger the scale, the thinner the cost; The lower the cost, the more conducive to scale up.
In fact, in the past 10 years, the cost of photovoltaic power generation in China has decreased by more than 90%, and some regions in China have even seen the on-grid electricity price of less than 0.15 yuan, which is significantly lower than the thermal power of the largest power source. Many years ago, the goal of PV on-grid electricity price equaling or even lower than that of thermal power has become a reality.
The larger the PV installation scale, the larger the supporting energy storage market.
Different regions also have different regulations on the supporting energy storage capacity of the new PV installed capacity, which is generally no less than 10% of the installed capacity. Many regions have higher energy storage requirements.
For example, in the optimization results of the guaranteed grid-connected centralized wind power and photovoltaic power generation projects in Inner Mongolia in 2021, it is proposed to allocate and store energy by 15% – 30%, with a storage time of 2 hours; Zaozhuang, Shandong Province, issued the first distributed photovoltaic energy storage configuration standard in Shandong Province in November 2021, proposing to configure the energy storage facilities according to the installed capacity of 15% – 30% and the duration of 2-4 hours; Gansu Jiayuguan City mentioned in the Announcement on Competitive Configuration of the First Batch of Photovoltaic Power Generation Projects in the “Fourteenth Five-Year Plan” issued by Jiayuguan City in March 2022 that the energy storage scale of the declared project is not less than 20% of the project scale, and the energy storage and discharge duration is not less than 2 hours.
After the decline of PV power generation cost and the increase of peak-valley power difference, the growth of profit space in the energy storage market is even greater than the new PV installed capacity.
Which companies will compete for these profit space?
Can electrochemical energy storage become the leader
The consumption of renewable energy power such as photovoltaic needs to be sold in the grid. According to the Notice on Issues Related to the Development and Construction of Wind Power and Photovoltaic Power Generation in 2021 issued by the National Energy Administration, in addition to the guaranteed grid connection, all provinces (districts and cities) have other projects that are willing to be connected to the grid. The grid connection conditions mainly include the flexible adjustment capabilities of supporting new pumped storage, thermal storage photothermal power generation, thermal peak shaving, new energy storage, adjustable load, etc.
Only energy storage can stabilize fluctuations and support large-scale grid connection of photovoltaic wind power. It can be said that the scale of energy storage even determines the scale of grid connection.
According to the different energy storage duration, there are millisecond to minute energy storage technologies, mainly including superconducting magnetic energy storage, supercapacitor energy storage and flywheel energy storage; There are also energy storage technologies ranging from tens of minutes to several hours, mainly including electrochemical energy storage, pumped energy storage and compressed air energy storage; There are still several days or more to store energy, mainly by fuel, including hydrogen fuel, methanol fuel, ammonia fuel, etc.
However, different energy storage duration technologies do not mean that power grid dispatching is limited to its duration. Some long-term energy storage projects can also be used for short-term and transient.
For example, for the power grid, millisecond level power grid frequency modulation does not require supercapacitors, and hourly level electrochemical energy storage can also be used, but pumped storage is not suitable because it cannot respond to power grid frequency modulation quickly. However, electrochemical energy storage and pumped-storage are more suitable for peak-shaving of several hours of power grid. Fuel energy storage can also be peak-regulated by low power, but the fuel produced is generally used for vehicle and ship power instead of fuel, but it is rarely converted into electric energy.
According to Zhao Tianshou, an academician of the CAS Member, in order to achieve the 2060 carbon neutral goal, the installed capacity of photovoltaic and wind power will reach 5 billion kilowatts, and the annual power generation will be 10 trillion degrees (China’s total power generation will be 8.4 trillion degrees in 2022). If energy storage is 10% – 50% equipped, the energy storage capacity will be 1 trillion to 5 trillion degrees. Faced with the demand of such large capacity, the energy storage technology must meet the requirements of scale, high security, low cost, long life, no geographical restrictions and so on.
Pumped storage can just meet the first four of the above five conditions, so at present, pumped storage is still ranked first. However, only electrochemical energy storage can meet the five conditions; Therefore, electrochemical energy storage has the fastest growth rate.
In particular, the battery energy storage system has the characteristic of zero inertia time constant. Compared with the regulation capacity of 10% rated capacity/minute of the hydropower system and 0.5% rated capacity/minute of the thermal power generation system, the instantaneous power regulation capacity of the battery energy storage system is significantly better than that of the traditional power generation equipment. Therefore, using the battery energy storage system to smooth the wind power generation has great advantages.
According to the data of Zhongguancun Energy Storage Industry Technology Alliance, by the end of 2022, the cumulative installed capacity of China’s electric energy storage projects that have been put into operation reached 59.4GW, up 37% year on year. Among them, pumped storage accounts for the largest proportion, with the cumulative installed capacity of 46.1GW. However, the new type of energy storage continued to maintain a high growth rate, with the newly installed capacity reaching 6.9GW/15.3GWh, an increase of more than 180% year on year, and the cumulative installed capacity reaching 12.7GW, accounting for about 27.5% of the pumped storage capacity.
The fastest growing is still the new type of energy storage based on electrochemical energy storage. New energy storage is not only growing fast, but also growing in scale. The 100-megawatt projects in a single project scale have become the norm. According to statistics, more than 20 100-megawatt projects have been put into grid operation in 2022, five times the number of the same period in 2021, and the number of planned 100-megawatt projects under construction is more than 400.
Liu Wei, Secretary-General of the Zhongguancun Energy Storage Industry Technology Alliance, predicted that during the “14th Five-Year Plan” period, new energy storage will continue to develop at a high speed, with a compound annual growth rate of 55% – 70%, and the market size will reach new highs. The Everbright Securities Research Report predicts that the annual composite growth rate of the installed capacity of pumped storage will exceed 14% in 2022-2030. Although the predicted time periods of the two are different, the four times or higher growth rate of the new energy storage also means that the new energy storage, especially the electrochemical energy storage, is very likely to catch up with the pumped storage in terms of installed capacity.
Various energy storage routes are eyeing
Photovoltaic supporting energy storage includes various types, although electrochemical energy storage has the fastest growth rate, including lithium iron phosphate, sodium ion battery, all-vanadium liquid-flow battery and other technical routes; However, the scale of pumped storage still dominates.
The huge storage dam and the storage capacity of tens of millions or even hundreds of millions of cubic meters make other energy storage technology projects seem too small.
For example, the Fengning Pumped Storage Power Station in Hebei Province has a reservoir capacity of more than 48 million cubic meters in its upper reservoir, nearly 60 million cubic meters in its lower reservoir, and a drop of more than 400 meters between the upper and lower reservoirs. It is reported that the total installed capacity of the power station is 3.6 million kilowatts, and the storage capacity is nearly 40 million kilowatt-hours at a time, which is equivalent to the three-day power generation capacity of wind power and photovoltaic power generation units connected to the Zhangbeirouzhi Power Grid, and it is the only pumped-storage power station in North China with weekly regulation performance (balanced power generation within a week).
Even the huge installed capacity of 3.6 million kilowatts is still being surpassed. According to CCTV News in December 2022, the world’s largest hybrid pumped-storage project, the Yalong River Lianghekou hybrid pumped-storage power station, officially started construction at the end of 2022. The total installed capacity of the power station is 4.2 million kilowatts, which can absorb about 7 million kilowatts of wind and light new energy.
Why can the installed capacity of 4.2 million kilowatts absorb 7 million kilowatts of wind power generation? Because of the large fluctuation of wind and electricity, 7 million kilowatts is only the maximum value of random fluctuation. Because photovoltaic does not operate at night, wind power may be started, connected to the grid and shut down for many times in a day, which can fully absorb 4.2 million kilowatts on average, and convert the fluctuating power supply into a smooth and stable high-quality power supply.
However, pumped-storage energy has high requirements on terrain, and another technical route that can be comparable to electrochemical energy storage is also waiting to be developed, that is, fuel energy storage.
Even, Geely Automobile may not be the electric power related enterprise, but rather the one who is most interested in fuel energy storage. Because photovoltaic hydrogen production and the use of photovoltaic power to produce methanol and other fuel energy storage are good for the development of hydrogen vehicles and methanol vehicles. Geely is just the car company that places the most emphasis on methanol-fueled vehicles and the most heavily bet among domestic car companies. Since it was promoted ten years ago, it is still promoting its own methanol-powered vehicles.
Due to the advantages of convenient storage and transportation of methanol, compared with the disadvantages of hydrogen requiring high-pressure storage and transportation tanks, methanol vehicles also have the advantages that are technically more suitable for promotion than hydrogen vehicles. At present, methanol is mainly produced by coal in China. Methanol molecular formula CH4O, with the help of photovoltaic cheap energy supply, can also realize the hydrogenation of carbon dioxide to methanol.
In terms of cost, according to Guohai Securities, when the coal price is 800 yuan/ton, the cost of coal to methanol is about 1953 yuan/ton; The actual consumption of 0.19 tons of hydrogen and 1.4 tons of carbon dioxide to produce methanol by hydrogenation of carbon dioxide should be considered. After reasonable assumptions about the price of raw materials and manufacturing costs, it can be calculated that the cost of methanol is 1953 yuan/ton when the electricity price is 0.07 yuan/kWh (the corresponding cost of hydrogen is 7.01 yuan/kg), which is equivalent to the cost of coal to methanol when the coal price is 800 yuan/ton.
It is understood that in 2022, the cost of photovoltaic power consumption has dropped to less than 0.3 yuan. Although the decline has become narrower and narrower, the grand situation of 90% reduction in the past ten years is difficult to reproduce in the next ten years. However, the downward trend of the cost of kilowatt-hour electricity has not changed. It is still possible to reduce the cost of kilowatt-hour electricity by two thirds in the next decade. As long as the cost of photovoltaic power is reduced to 0.1 yuan, carbon dioxide hydrogenation to methanol is more profitable than coal to methanol. What’s more, the former does not need to consume valuable fossil energy and can realize the recycling of carbon dioxide.
Although the calorific value of methanol is lower than that of gasoline, its volatility is lower than that of gasoline, and it is easy to dissolve in water. Methanol entering into water or soil will be diluted quickly. It is not easy to cause environmental pollution accidents like fuel leakage, and it is also better than gasoline in emissions. In theory, methanol can completely replace gasoline as the main fuel for automobiles and continue to extend the life cycle of internal combustion engines. Due to the development of incremental technology and hybrid technology, methanol engine can also be used as a hybrid power option in electric vehicles.
Write at the end
According to statistics, the total annual output of methanol in China in 2022 will be 83065800 tons, of which coal to methanol will account for about 80%. In addition, natural gas to methanol and coke oven gas (containing 55% – 60% hydrogen) to methanol will also account for a large proportion. However, the proportion of carbon dioxide hydrogenation to methanol that requires more power consumption is not high.
Because most of methanol is used as chemical raw material, methanol only consumes about 10 million tons as fuel. The proportion of methanol used as vehicle fuel is even smaller, because the current market of methanol vehicles is only about 30000, even if a vehicle consumes 10 tons of methanol a year, it can only consume 300000 tons.
The calorific value of crude oil is 41868 kJ/kg, that of gasoline is 43124 kJ/kg, and that of gasoline is about 1.03 times that of crude oil. Compared with gasoline, methanol is 1.7 to 1 in the actual operation of the engine, that is, 1 kilogram of gasoline is equivalent to 1.7 kilograms of methanol. In 2022, China will import about 502 million tons of crude oil. If one fifth of the crude oil is replaced by 100 million tons, approximately 170 million tons of methanol will be needed. On the basis of not impacting the use of existing methanol chemical raw materials, as methanol fuel consumption is only 10 million tons per year, an additional 160 million tons of methanol are needed.
Since the total power consumption of producing 1 kg of hydrogen from the electrolytic water hydrogen production process is generally 50 to 55 kilowatt-hours electricity, taking 50 kilowatt-hours electricity as the calculation, 1 ton of methanol needs 190 kg of hydrogen, so the main power consumption link of hydrogen production needs 9500 kilowatt-hours electricity. Considering other links, 1 ton of methanol requires at least 10000 kilowatt-hours of electricity. 160 million tons of methanol will require 1.6 trillion kilowatt-hours of electricity, and 1.6 billion kilowatts will be needed to convert it into photovoltaic installed capacity based on 1000 utilization hours per year.
According to the data of the National Energy Administration, 8741GW of photovoltaic installed capacity will be added in 2022, totaling 392.61GW (million kilowatts), or about 392.6 million kilowatts. The cumulative installed capacity has to be increased by four times, only enough to meet the power consumption of 160 million tons of carbon dioxide hydrogenation to methanol!
The long-term advantages of fuel energy storage, as well as the substitution of oil imports, are also a technical route that is worth promoting in addition to electrochemical energy storage and pumped storage.
One big industry after another is involved in photovoltaic and energy storage, forming a more complete industrial chain of big countries. Just as wind power drives the development of bearings, blades, carbon fiber and other industries, photovoltaic also drives more new technological routes such as perovskite replacing crystalline silicon solar cells, and multiple types of energy storage drives the development of more industries such as batteries, fuels, and hydroelectric generators.
It can be seen from the above analysis that various energy storage routes have a tremendous demand for energy. Even if photovoltaic power is doubled again, we have sufficient demand to absorb it. Energy is so important that in the future national industrial competition, who has a higher degree of transformation, storage and control of energy, can also be invincible.