Finance and Economics APP learned that on November 6, the Ministry of Industry and Information Technology publicly solicited opinions on the action plan for the high-quality development of the new energy storage manufacturing industry (draft for comments). Among them, it was proposed that by 2027, the scale of the new energy storage manufacturing industry would basically match downstream demand, nurturing 3-5 ecological leading enterprises with a scale of over 100 billion yuan. The supply capacity of high-security, high-reliability, high-energy-efficiency, long-life, and economically feasible new energy storage products continues to increase. Haitong Securities pointed out that the development of China's energy storage market is stable and positive, and the new energy storage sector has significant development space as a key industry direction. The government continuously issues a series of policies to build a development framework, and various provinces are increasingly improving related policies on the grid connection and market mechanisms for new energy storage projects, gradually increasing policy support and providing a good environment for the healthy development of the energy storage industry.

The draft proposes to implement actions for innovative new energy storage technologies, develop diverse new energy storage ontology technologies. Targeting multi-time-scale and multi-application-scenario demands such as medium-short-term and long-term energy storage, accelerate the diversified development of new energy storage ontology technologies to enhance the safety, reliability, economic feasibility, and energy conversion efficiency of new energy storage products and technologies.

New energy generation has the characteristics of volatility and randomness. The large-scale grid connection of intermittent energy sources has brought adverse effects on grid operation. Energy storage technology can achieve decoupling between the power supply side and the user side through the regulation role of 'peak shaving and valley filling', reducing the negative effects of power source fluctuations.

New energy storage refers to energy storage technologies with output electricity as the main form other than pumped hydro storage. Differentiating between chemical storage and physical storage:

(1) Chemical Storage: Lithium-ion batteries are currently the main type of new energy storage with the highest maturity, and have been widely applied in the market. Sodium-ion batteries have good low-temperature performance, high safety, and low cost, suitable for energy storage in cold regions. Flow batteries have a long cycle life. Solid-state batteries have advantages such as high energy density, wide temperature adaptability, long life, and excellent safety. Water-based batteries feature safety, low cost, and environmental friendliness.

(2) Physical Storage: Compressed air energy storage is more suitable for large-scale, long-term energy storage models. In the compressed air energy storage technology route, liquid air energy storage systems have high energy density and flexible site selection but low energy storage efficiency. Gravity energy storage has cost advantages. Flywheel energy storage has high energy conversion efficiency, but relatively lower power levels.

Since the beginning of this year, the scale of new energy storage installations has also shown a steady growth trend.

By the first half of 2024, the cumulative installed capacity of newly built and commissioned new energy storage projects nationwide has reached 44.44 million kilowatts/99.06 million kilowatt-hours, an increase of over 40% compared to the end of 2023.

In terms of technical routes, as of the first half of 2024, the proportion of lithium-ion battery energy storage projects that have been put into operation is 97.0%, compressed air energy storage is 1.1%, lead-acid battery energy storage is 0.8%, flow battery energy storage is 0.4%, and other technical routes account for 0.7%.

From the perspective of application scenarios, independent energy storage and shared energy storage account for 45.3% of installed capacity, new energy complementary energy storage accounts for 42.8%, and other application scenarios account for 11.9%.

The continuous strengthening of the application of new energy storage enhances regulatory functions gradually.

According to the statistics of grid enterprises, the State Grid Corporation's equivalent utilization hours for new energy storage in the first half of 2024 reached 390 hours, and the equivalent charge-discharge frequency was around 93 times, representing an increase of about 100% and 86% respectively compared to the first half of 2023. The implementation of the green certificate system is a strong tool for promoting the development and utilization of renewable energy and ensuring the consumption of renewable energy electricity. Since the issuance of green certificates by the National Energy Administration, significant progress has been made in related work.

The number of green certificates issued is growing rapidly. In the first half of 2024, the National Energy Administration issued 0.486 billion green certificates, an increase of 13 times compared to the same period last year. Among them, wind power generation accounted for 0.197 billion certificates, conventional hydropower 0.102 billion certificates, solar power 0.133 billion certificates, biomass power generation 54.35 million certificates, and other renewable energy power generation 0.0165 million certificates.

The green certificate trading market is becoming more active. In the first half of 2024, the number of enterprises and individual entities participating in the national green certificate market trading was 0.039 million, a fourfold increase compared to the previous year, and the trading volume of green certificates was 0.16 billion (including 77.37 million green certificates from green electricity trading), a sixfold increase compared to the same period last year. Among them, wind power generation accounted for 95.39 million certificates, solar power generation 64.13 million certificates, and biomass power generation 0.185 million certificates.

ShenGang Securities believes that, against the backdrop of building a 'new power system' and the 'dual-carbon goal', renewable energy generation will gradually transform into the main body of installed capacity and electricity generation. The instability, randomness, and volatility of wind power and photovoltaic power will inevitably require energy storage systems to coordinate operation to ensure the safe and stable operation of the power system. The construction of energy storage systems is still expected to maintain high prosperity.

Related concept stocks:

Shanghai Electric (02727): The company continues to enhance its advantages in the energy equipment industry, focusing on new energy equipment and actively expanding multi-energy complementary businesses such as 'wind-solar-hydrogen'. In the field of energy storage, the company actively lays out technological routes such as compressed air energy storage and liquid flow energy storage. In the first half of the year, the company's participation in the construction of the 300 MW-level compressed air energy storage power station demonstration project in Yingcheng, Hubei was grid-connected, and it also won the bid for the 10MW/20MWh all-vanadium liquid flow energy storage system project in Guanyun, Jiangsu.

BYD Company Limited (01211): Previously, BYD stated on the interactive platform that BYD Energy Storage has provided safe and reliable energy storage system solutions for hundreds of energy storage projects at home and abroad. Its new energy products are exported to more than 400 cities across six continents globally, including over 70 countries and regions such as the USA, the United Kingdom, Germany, France, Switzerland, and Italy, with a total shipment volume exceeding 5.7GWh.

Wasion Holdings (03393): In the past two years, the company has increased its efforts to go global with Wasion Information & Wasion Energy (setting up an overseas affairs department at the beginning of 23), vigorously tapping into the needs of existing customers beyond electric AMI for distribution network and smart grid intelligence. It is expected that the proportion of electric AMI in overseas income will decrease in 24, while the proportion of Wasion Information & Wasion Energy is expected to continue to rise, with multiple businesses overseas driving overall growth.