"carbon neutralization" is not only one of the hot topics recently, but also one of the C-bit themes in the market.

Affected by this theme, the iron and steel sector, which has been unattended for many years, has seen the highest increase so far this year; back to the new energy field that we have been tracking, the hot speculation of new energy vehicles in 2020 led everyone to overdraw their valuation until 2025, while the quantitative goal of carbon neutralization was directly given to 2030 and 2060, and researchers have begun to launch the 40-year-old DCF (discounted cash flow model).

In addition to the theme investment, we try to study the energy storage track which has not received much market attention from the perspective of business operation.In fact, it is the "dragon vein" of carbon neutrality, supporting the main branches of the two trillions of tracks-clean energy such as heat, electricity and hydrogen on the left, right traction batteries and new energy vehicles.

The duck with warm water in the river is the first to feel the smell of spring, and the industry big brother has taken the lead in rushing into the energy storage track-- we have seen$Ningde era (300750.SZ) $On one side is the crazy expansion of power battery capacity, on the other hand is the frequent increase in the field of energy storage.

The eldest brother joined the game

When it comes to the Ningde era, people will first think of the power battery, or they may only think of the power battery. After all, the honor of being the first power battery in the world is too dazzling, but in fact, the Ningde era does not stop at the power battery. On February 6 this year, Ningde Times issued an announcement that it will be associated withYongfu Co., Ltd. (300712.SZ) $Jointly set up a joint venture company to focus on integrated smart energy.

At the time of the transition between the new and old years, this wave of operations in the Ningde era really baffled many investors' monks. Yongfu shares are a listed company engaged in power engineering design services, which at first glance has nothing to do with power batteries.

Fortunately, Zeng Yuqun, chairman of Ningde Times, revealed the key information at the signing ceremony: this cooperation is based on Ningde's advantages in energy storage batteries and Yongfu's deep understanding of the power industry and leading technology integration capabilities. the aim is to integrate the smart energy industry and open up a new way. At the same time, Lin Yiwen, chairman of Yongfu, also said: Yongfu will join hands with Ningde era to comply with the trend, grasp the general trend, and jointly develop the core technology of "renewable energy + energy storage".

It turns out that the cooperation between Ningde era and Yongfu shares is aimed at energy storage.

From Yongfu's annual report, we can see that Yongfu has continuously increased its investment in innovative research and development of energy storage technology in recent years. At present, it already has the planning, design and development capacity of large-scale energy storage power stations above 100MW, and has accumulated a large number of energy storage application project development reserves, with a cumulative capacity exceeding 700MWh, it can be said that Yongfu share has a good strength in energy storage.

In addition, during the two sessions this year, Zeng Yuqun, chairman of the Ningde era, as a member of the CPPCC National Committee, also submitted a proposal on electrochemical energy storage to help new infrastructure. As the absolute leader of power batteries, Ningde era did not guard the city well. how do you put your energy into the field of energy storage?

This article attempts to answer the above questions from the past and present of the Ningde era, but since energy storage is not known like power batteries, let's talk about energy storage briefly.

What is energy storage?

The so-called energy storage mainly refers to the storage of electric energy, which is divided into thermal energy storage, electric energy storage and hydrogen energy storage. Among them, pumped storage is the earliest energy storage technology, which has a history of more than 100 years. Up to now, it has become the most mature energy storage technology with the largest installed capacity. By 2019, the installed capacity of pumped energy storage has reached 93.4%.

However, pumped storage itself has the biggest limitation, that is, it has to be built in areas with rich water sources and high and low gaps, and the areas that can meet the conditions are limited, so it can be said that there is one less place to be built, so it can be seen with the naked eye that the space for pumped storage is limited. Now the growth rate of global pumped storage capacity has declined year by year, from 13.44% at its peak to-0.35% in 2019.

On the contrary, the current status of electrochemical energy storage is not high, thanks to the advantages of flexible installation, short construction period and a wide range of applications, it is recognized as the most promising energy storage technology in the industry. the proportion of global installed capacity has increased from 1.7% in 2017 to 5.9% in 2020 3Q, that is, the theoretical improvement of electrochemical energy storage has 20 times.

From the point of view of the technical path, the realization of electrochemical energy storage basically depends on lithium batteries-whether you are familiar with it or not, which goes back to the old business of Ningde era. In the electrochemical energy storage technology, lithium battery energy storage is the best. Since 2013, the installed capacity of lithium battery has accounted for the largest proportion of electrochemical installed capacity, and has been increasing.

By 2019, the cumulative installed capacity of lithium-ion batteries in the world accounted for 87.3% of the electrochemical energy storage. It is no exaggeration to say that the future electrochemical energy storage field will be dominated by lithium batteries.

There has been a plan for Yang.

[1] Origin

The previous article mentioned the layout of energy storage in Ningde era, in fact, it was not on a whim. Looking at the history of the Ningde era, as early as March 2011, the Ningde era won the Zhangjiakou scenery storage demonstration project.

Huang Shilin, vice chairman of the Ningde era, also said that "as early as the beginning of the Ningde era, two main business directions were identified, one is to make power batteries, and the other is energy storage batteries." It can be said that the scenery storage project in Zhangbeikou made Ningde era related to energy storage.

However, in the following years, the Ningde era was almost invisible in the field of energy storage, in sharp contrast to its record in power batteries, which advanced by leaps and bounds until it became king.

According to the data of CNESA, from 2013 to 2017, the new installed scale of global electrochemical energy storage projects in the power system only increased from 0.1GW to 0.9GW, it can be said that electrochemical energy storage has not broken through the shackles of 0-1, the whole industry is still in its infancy, it is no wonder that the energy storage business of Ningde era has not improved.

[2] turning point

Until 2018, electrochemical energy storage finally reached a turning point, when the new installed scale of global electrochemical energy storage reached 3.7GW, an increase of 305% over the same period last year, and the electrochemical energy storage market, which had been silent for many years, finally broke ground.

Also in 18 years, Ningde era set up a separate energy storage department and began to promote energy storage business on the fast track. In June of that year, Ningde era first signed a contract for the construction of Jinjiang energy storage power station in Fujian, and then won the bid for Luneng Haixi demonstration project.

At this point, Ningde era in the road of energy storage, from spending a lot of money on energy storage research and development, and then to join hands with the national network, Costa, Easite, Yongfu shares, etc., omni-directional layout of energy storage upstream and downstream.

According to BloombergNEF, between 2010 and 2020, the average global price of lithium-ion battery packs fell from $1100 / kWh to $137 / kWh, a drop of 89 per cent. In the past decade, the cost of the entire energy storage system has fallen by 75 per cent from an equipment point of view.

Although Ningde era laid out energy storage very early, it has been stagnant for many years, one of the reasons is that the cost of lithium battery is still too high. At present, good progress has been made in the cost of energy storage batteries, butFor energy storage batteries to realize their maximum potential, the three core drivers are cheap, cheap or cheap.。

[3] harvest

The real highlight of the energy storage industry came in 2020, when China announced to the world that it would strive to peak its carbon emissions by 2030 and carbon neutral, the so-called 30-60 target, by 2060.

In order to achieve the ultimate goal of carbon neutralization, the main way is to develop renewable energy such as photovoltaic and wind power to replace fossil energy.

But renewable energy sources such as photovoltaic and wind power are typical intermittent energy. what do you mean? Take wind power as an example. it is usually the peak of wind power in the early hours of the morning, but it is the low peak of electricity consumption for users. when the peak of electricity consumption comes in the morning, the wind stops and users do not need wind power. To put it bluntly, photovoltaic and wind power are unreliable.

In the first half of 2019 alone, the abandonment rates in Xinjiang, Gansu and Inner Mongolia were 17.0%, 10.1% and 8.2%, respectively. While the proportion of wind power and photovoltaic power generation is still in the single digits, it is expected to rise to 25% in 2030, when this contradiction will become more prominent.

The congenital deficiency of photovoltaic and wind power can now be solved by peak shaving, when the ultimate solution is to store energy, store electricity when photovoltaic and wind energy is sufficient, and release stored electricity when needed.

Another aspect that may not be accessible to everyone is that although photovoltaic and wind power are clean energy, they are not friendly to the power grid at all. As we all know, electric energy is transmitted at the speed of light, from power generation, transmission to electricity consumption is almost completed synchronously, the whole power grid is required to maintain the dynamic balance between the generator and the user at all times.

Due to the variable size of renewable energy generation, it not only significantly increases the workload of the power grid, but also causes additional loss of power equipment, which in serious cases leads to power grid frequency collapse and large-scale power outages.When the power grid is equipped with energy storage equipment, it can play an important role as a "buffer".

So at the beginning of this year, State Grid said it would spend an average of more than $70 billion a year over the next five years to upgrade the grid, promote clean and low-carbon energy transformation, and help achieve the goal of carbon neutralization.

In a word, the grand blueprint of carbon neutralization can not be achieved without the joint progress of energy storage and renewable energy.

So far, 20 provinces have issued policies to encourage renewable energy + energy storage. Among them, the specific requirements for the proportion of energy storage include: Shandong photovoltaic bidding project in 2020 requires 20% energy storage; Shanxi photovoltaic project proposes to allocate 15-20% energy storage in 2020; Inner Mongolia gives priority to supporting photovoltaic construction with 5% energy storage in 2020. Guizhou Fengguang has 10% energy storage in 2021, and no less than 10% in Hubei 2020 wind power project.

According to Wood Mackenzie, one of the largest energy consultants in the world, the global energy storage deployment will increase 13-fold to reach 230GWh by 2025, and the total global energy storage investment is expected to increase from $18 billion in 2019 to $100 billion in 2025.

This will be the next trillion big market, such a big cake, who is not tempted?

Compared with nothing in the initial stage of energy storage, Ningde's current energy storage can finally save some face. According to the financial report, the energy storage revenue of the Ningde era in 2018 was 189 million yuan, 11.8 times that of 2017, and in 2019, please climb another high-rise building, with revenue reaching 610 million yuan. In the ranking of China's new electrochemical energy storage installation in 2019, Ningde era surpassed SZ:300068, which has been at the top of the list for two years in a row.

By 2020, the shipments of energy storage batteries in Ningde era have increased to 2.8GWh, ranking first in China and third in the world, with a global market share of about 14%. At this point, the layout of the Ningde era is clearly visible.

Figure 6: China Energy Storage Technology provider Shipping ranking (MWh) in 2019, source: CNESA, Western Securities

New long March of Energy Storage

[1] Ningde takes the lead

As the most important part of the energy storage system, lithium battery accounts for 40% of the value of the energy storage system. Companies like the Ningde era can get the biggest piece of the cake because leading power battery manufacturers have a unique advantage in switching to energy storage batteries.

First of all, energy storage does not require high energy density of the battery.

For power battery companies, engineers are racking their brains in the limited space of the chassis in order to make electric cars run an extra kilometer. now energy storage products are designed on the volume of containers and energy storage batteries are installed outdoors. there is plenty of space for you to stack batteries, so you no longer have to pursue high energy density. To put it simplyTo let power battery companies make energy storage batteries is to reduce dimensionality.Of course, this can not defeat the Ningde era.

Secondly, energy storage lithium batteries generally follow the power battery production line, which can make full use of the capacity of the power battery production line.

Prior to this, Ningde era kept expanding production, the future planned production capacity to reach 500GWh, once caused concern in the community.Now that we see the space in the field of energy storage, we don't have to worry too much about the underutilization of its capacity.Optimistically speaking, the Ningde era can even rush again.

Third, lithium iron phosphate is the best partner for energy storage systems.

At present, lithium batteries used for energy storage are mainly lithium iron phosphate and ternary routes, which are mainly ternary routes abroad, while lithium iron phosphate is mainly used in China. Because the core demand of energy storage lies in price, stability and cycle life, it is in line with the characteristics of low cost, stable discharge, high safety and long cycle life of lithium iron phosphate battery. This is also the route that Ningde was good at at the time.

Finally, like power batteries, energy storage batteries also pay great attention to safety.

The safety of the energy storage system is related to the safety of the power grid and users. If a battery is out of control and catches fire, it will not only affect the operation of the whole energy storage system, but also cause accidents such as power station fire and power grid line burning, resulting in a large area power outage.

Ningde era has made good achievements in the safety of energy storage batteries and has passed the UL 9540A test, which is recognized as the most challenging international safety test in the world, and it is the only one in China.

[2] of course, the boys are not willing to fall behind.

In the field of power batteries, Ningde era is undoubtedly the boss, many domestic second-line battery enterprises are difficult to match. Now that Ningde era takes the initiative to lower its posture to make energy storage batteries, it will naturally face the problem that its technological advantages have been diluted.

Second-line power battery enterprises themselves have good strength, and it is more than enough to cope with energy storage batteries. Equivalent to the Ningde era and all kinds of players to an echelon, desperately chasing the boys also finally have the opportunity to compete on the same stage.

What is more worth mentioning is that for second-line power battery companies, the market is most worried about the potential risk of underutilization of their capacity. Reducing dimensionality to make energy storage batteries turns encumbrance into an advantage, so second-line battery companies are also flocking to the field of energy storage.

such asBillionth lithium energyInvest in Jingmen Yiwei energy storage power lithium-ion battery project, won the order of lithium iron phosphate for China Mobile Limited communications in May last year, and are also cooperating with Huawei in energy storage.Guoxuan high-techIn 2018, we began to join hands with Shanghai Electric layout energy storage, the supporting project of the 2022 Winter Olympic Games "Olympic scenery" project, in which the energy storage battery system is provided by Guoxuan Hi-Tech; andBYDIn August last year, it launched a new grid-grade energy storage product, BYD Cube, aimed at the Ningde era.

At present, the Ningde era seems to be one step ahead in the field of energy storage, but energy storage is after all a long-term track. Carbon neutralization will not be realized until 2060, and there are already a number of opponents who are eyeing covetously. If they want to become another king, they have to fight again.

Now the racetrack of energy storage has gradually changed from an untouched country road to a noisy and crowded urban road. In the field of energy storage, second-tier enterprises are presumably not easily defeated and may even fight a turnaround.

The first step of the trillion-yuan energy storage march has just begun, and the track is expected to be brilliant. We will continue to track and interpret this track, please do not go away, we will continue to break it down for you next time.