The increase in energy storage battery capacity is quite huge, but why is there still a shortage?

The summer of 2022 was the hottest season in the entire century.

It was so hot that the limbs were weak and the soul was out of the body; so hot that the whole city turned dark.

At a time when electricity was so difficult for residents, Sichuan decided to suspend industrial electricity for five days starting on August 15. After the power outage was introduced, a large number of industrial companies halted production and forced full staff to take a holiday.

Since the end of September, battery supply shortages have continued, and the trend of energy storage companies suspending orders has intensified. The shortage of energy storage supply has also pushed the energy storage circuit to a climax.

According to the Ministry of Industry statistics, the first half of this year, the national energy storage battery production over 32GWh. 2021, China's new energy storage added a total of only 4.9GWh.

It can be seen that the increase in energy storage battery production capacity, has been quite huge, but why is there still a shortage?

This paper provides an in-depth analysis of the causes of China's energy storage battery shortage and its future direction in the following three areas:

First, demand: the imperative grid reform

Second, the supply: can not compete with the car

Third, the future: the shift to liquid flow battery?

Demand: The imperative grid reform

To understand the need for energy storage, try to answer one question.

Why do large-scale power outages tend to occur in China during the summer months?

From the demand side, both industrial and residential electricity consumption show a certain degree of "seasonal imbalance", with "peak" and "trough" periods. In most cases, the grid supply can meet the daily demand for electricity.

However, the high summer temperatures increase the use of residential appliances. At the same time, many companies are adjusting their industries and the peak period of electricity consumption is also in summer.

From the supply side, the supply of wind and hydropower is unstable due to geographical and seasonal weather conditions. In Sichuan, for example, 80% of Sichuan's electricity comes from hydropower supply. And this year, Sichuan Province suffered a rare high temperature and drought disaster, which lasted for a long time, with serious water shortages in the main basins and tight power supply from hydropower plants. In addition, extreme weather and factors such as sudden reductions in wind power can also make wind turbines unable to operate normally.

In the context of the large gap between power supply and demand, in order to maximize the utilization of the power grid to ensure the supply of electricity, energy storage has become an inevitable option to enhance the flexibility of the power system.

In addition, China's power system is being transformed from traditional energy to new energy, photoelectricity, wind power and solar energy are very unstable by natural conditions, also has a high demand for energy storage.

According to the National Energy Administration, China's installed capacity of 26.7% of the landscape in 2021, higher than the global average.

In response, in August 2021, the National Development and Reform Commission and the National Energy Administration issued a notice on encouraging renewable energy power generation enterprises to build their own or purchase peaking capacity to increase the scale of grid connection, proposing that

Beyond the scale beyond the guaranteed grid connection of grid enterprises, initially, the peaking capacity will be allocated according to the pegging ratio of 15% of power (above 4h in length), and priority will be given to those allocated according to the pegging ratio of 20% or more.

It can be seen, in the context of power shortage, to solve the "abandoned wind, abandoned light" problem can not be delayed. If the previous thermal power backed by the emboldened, now the "double carbon" policy pressure, must be sent out on a regular basis, but no place to use the wind power and photoelectricity stored up, used in other places.

Therefore, the national policy began to clearly encourage the "allocation of peaking", the more the proportion of the allocation, you can also "priority grid", participate in the electricity market trading, get the corresponding income.

In response to the central policy, each region has been making great efforts to develop energy storage in power stations according to local conditions.

Supply: Can't compete with cars

Coincidentally, the power station storage battery shortage, coincided with the unprecedented boom in new energy vehicles. Power stations and car storage, both have a great demand for lithium iron phosphate batteries, but pay attention to bidding, cost-effective power stations, how can grab the fierce automotive companies?

Thus, the power station storage previously existed some of the problems surfaced.

On the one hand, the initial installation cost of the energy storage system is high. Affected by supply and demand as well as the industry chain raw material price increases, after 2022, the price of the entire energy storage system integration, has risen from 1,500 yuan / kWh in early 2020, to the current 1,800 yuan / kWh.

The whole energy storage industry chain price increase, the core price is generally more than 1 yuan / watt hour, inverters generally rose 5% to 10%, EMS also rose by about 10%.

It can be seen that the initial installation cost has become the main factor that restricts the construction of energy storage.

On the other hand, the cost recovery cycle is long, and profitability is difficult. To 2021 1800 yuan / kWh energy storage system cost calculation, energy storage power plant two charge two put, charge and discharge the average price difference in 0.7 yuan / kWh or more, at least 10 years to recover costs.

At the same time, due to the current regional encouragement or mandatory new energy with energy storage strategy, the proportion of 5% to 20%, which increases the fixed costs.
In addition to the above reasons, power station storage is also like new energy vehicles will burn, explosion, this safety hazard, although the probability is very low, more let the very low risk appetite of the power station discouraged.

It can be said that the "strong allocation" of energy storage, but not necessarily grid-connected transactions policy, so that a lot of demand for the order, but not in a hurry to use. After all, most of the power stations are state-owned enterprises, to ensure safety is the first priority, they also face financial assessment, who would like to rush on a recovery time of such a long project?

According to the decision-making habits, many orders for power station energy storage, should be placed, hanging, waiting for further policy clarity. The market needs a big mouth to eat crabs, but have the courage, after all, not many.

It can be seen that the problem of power station energy storage to dig deeper, in addition to a small part of the upstream lithium price increase, there is a large part of the traditional technical solutions are not fully applicable to the power station scenario, how should we solve the problem?

At this point, the liquid flow battery solution came into the spotlight. Some market participants have noted that "the installed energy storage ratio of lithium has tended to decline since April 2021, and the market increment is shifting to liquid flow batteries". So, what is this liquid flow battery?

The future: a shift to liquid flow batteries?

Simply put, liquid flow batteries have many advantages that are applicable to power plant scenarios. Common liquid flow batteries, including all-vanadium liquid flow batteries, zinc-iron liquid flow batteries, etc.

Taking all-vanadium liquid flow batteries as an example, their advantages include.

First, the long cycle life and good charge and discharge characteristics make them suitable for large-scale energy storage scenarios. The charge/discharge cycle life of all-vanadium liquid flow energy storage battery can be more than 13,000 times, and the calendar life is more than 15 years.

Second, the power and capacity of the battery are "independent" of each other, making it easy to adjust the scale of energy storage capacity. The power of an all-vanadium liquid flow battery is determined by the size and number of the stack, and the capacity is determined by the concentration and volume of the electrolyte. Battery power expansion can be achieved by increasing the power of the reactor and increasing the number of reactors, while capacity increase can be achieved by increasing the volume of electrolyte.

Finally, the raw materials can be recycled. Its electrolyte solution can be recycled and reused.

However, for a long time, the cost of liquid flow batteries has remained high, preventing large-scale commercial application.

Taking vanadium liquid flow batteries as an example, their cost mainly comes from the electric reactor and electrolyte.

The electrolyte cost accounts for about half of the cost, which is mainly affected by the vanadium price; the rest is the cost of the stack, which mainly comes from ion exchange membranes, carbon felt electrodes and other key component materials.

The supply of vanadium in the electrolyte is a controversial issue. China's vanadium reserves are the third largest in the world, but this element is mostly found with other elements, and smelting is a highly polluting, energy-intensive job with policy restrictions. Moreover, the steel industry accounts for most of the demand for vanadium, and the core domestic producer, Phangang Vanadium and Titanium, of course, supplies steel production first.

In this way, vanadium liquid flow batteries, it seems, repeat the problem of lithium-containing energy storage solutions - grabbing upstream capacity with a much bulkier industry, and thus the cost fluctuates dramatically on a cyclical basis. In this way, there is a reason to look for more elements to supply a stable liquid flow battery solution.

The ion exchange membrane and carbon felt electrode in the reactor are similar to the "neck" of the chip.

As for ion exchange membrane material, domestic enterprises mainly use Nafion proton exchange film made by DuPont, a century-old company in the United States, which is very expensive. And, although it has high stability in the electrolyte, there are defects such as high permeability of vanadium ions, not easy to degrade.

The carbon felt electrode material is also limited by foreign manufacturers. Good electrode materials can improve the overall operating efficiency and output power of liquid flow batteries. However, at present, the carbon felt market is mainly occupied by foreign manufacturers such as SGL Group and Toray Industries.

Comprehensive down, a calculation, the cost of vanadium liquid flow battery, than lithium is much higher.

Energy storage new expensive liquid flow battery, there is still a long way to go.

Epilogue: The key to breaking the great domestic cycle

To say a thousand words, power station storage to develop, the most critical, but not what technical details, but clear power station storage to participate in the main body of the power market transactions.

China's power grid system is very large, complex, so that the power station with energy storage independent online, is not a simple matter, but this matter can not be held back.

For the major power stations, if the allotment of energy storage is only to do some auxiliary services, and does not have an independent market trading status, that is, can not be excess electricity, to the appropriate market price to sell to others, then this account is always very difficult to calculate over.

Therefore, we should do everything possible to create conditions for power stations with energy storage to turn into an independent operating status, so that it becomes an active participant in the power trading market.

When the market has gone ahead, many of the costs and technical problems faced by energy storage, I believe that will also be solved.

Post time: Nov-07-2022