Both domestic and overseas energy storage demand remains on the rise, with a trend towards technological diversification emerging, and the energy storage industry is expected to remain prosperous.
According to a research report released by Shenwan Hongyuan, the energy storage industry in September is seeing a clearer trend towards technological diversification, with new technology projects already being implemented. In terms of project scale, the domestic market remains highly prosperous. Overseas markets also show strong demand, with steady growth in demand in mainstream European and American markets, as well as emerging markets already gaining traction. Overall, both domestic and overseas energy storage demand remains on the rise, with a trend towards technological diversification emerging, and the energy storage industry is expected to remain prosperous.
Shenwan Hongyuan's main points are as follows:
Event: Based on energy storage and electrical market data, the total scale of energy storage projects under construction or connected to the grid in the first two weeks of September was 10.12 GWh, covering various technologies such as carbon dioxide, flywheel energy storage, molten salt energy storage, and vanadium flow battery, including multiple GWh-level energy storage projects; with a bidding scale of 4.67 GWh. Energy storage demand is steadily increasing, and the industry remains highly prosperous.
Continuous technological diversification is driving innovation in the energy storage market.
Dinglun Energy Technology (Shanxi) Co., Ltd.'s 30MW flywheel energy storage project has successfully connected to the grid for power generation, marking the birth of China's first independent grid-side flywheel energy storage frequency regulation power station. Flywheel energy storage technology, with its rapid response capability and high cycle life, demonstrates great potential in the power frequency regulation field, indicating the diversification of future energy storage technologies and the expansion of application scenarios. From carbon dioxide energy storage, flywheel energy storage, molten salt energy storage to vanadium flow batteries, and the exploration and application of grid-connected energy storage, different technological routes of energy storage projects are advancing together, collectively driving the technological innovation and market maturity of the energy storage industry.
Impressive project scale, with the market remaining prosperous.
According to the incomplete statistics from the CNESA Global Energy Storage Database, as of August 2024, the scale of newly commissioned and operational new energy storage projects in China totaled 1.85GW/4.74GWh, an increase of +80%/+108% year-on-year, with a continuous high demand for energy storage. Recently, several GWh-level projects have made progress, including the Inner Mongolia Energy Group Dengkou Electric Energy Storage New Energy Project, the Huadian Mulei 1 million kilowatt Carbon Dioxide Compressed Air Energy Storage Comprehensive Energy Demonstration Project, the Gansu Power Investment Group Tengger Desert Base Liangzhou District 3000MW Photovoltaic Project, and the Xinhua Wushi 500MW/2000MWh Global Vanadium Liquid Flow Grid-type Energy Storage Project. These projects are not only large in scale but also use advanced energy storage technology and innovative business models, marking the energy storage industry's advancement towards scale and efficiency. Based on the continuous high growth of energy storage demand and the steady progress of large domestic projects, it is expected that the energy storage market will remain prosperous and maintain a high growth rate in the second half of the year.
Overseas demand is surging, with emerging markets gaining momentum.
Overseas demand remains strong, particularly in the USA. According to EIA data, in the first half of 2024, the USA added 4.2GW of new energy storage installations, a 150.5% increase. Thanks to the IRA Act and FERC's new regulations being implemented, coupled with the gradual decline in large energy storage system prices in the USA and the upcoming interest rate cut cycle in the US, policy incentives and cost reductions are driving strong demand for energy storage. In Europe, the electricity reform is progressing steadily, with frequent occurrences of negative electricity prices, leading to strong demand for energy storage.
In emerging markets, the Asia, Africa, and Latin America (excluding China) markets are gradually gaining momentum. Taking Chile as an example, according to the Chilean Renewable Energy and Energy Storage Association (ACERA), as of May 2024, Chile has a total of 389MW of operational energy storage projects, 310MW of projects in commissioning, 1.16GW of projects under construction, and approximately 9.5GW of reserve projects (approved and under review). Based on the continuous high growth in domestic and international energy storage market demand, the energy storage industry is expected to remain highly prosperous.
In terms of investments, it is recommended to focus on energy system suppliers with good overseas market expansion such as Sungrow Power Supply (300274.SZ) and ATS (688472.SH); leading energy storage PCS companies like Sineng Electric (300827.SZ), Deyee Corporation (605117.SH), Shenzhen Sinexcel Electric (300693.SZ), and Elion Energy (688717.SH); as well as leading energy storage temperature control companies like Shenzhen Envicool Technology (002837.SZ).
Risk Warning: Energy storage installations may fall short of expectations; industry competition intensifies, leading to decreased profitability; emerging market installation volumes may not meet expectations.