The energy storage industry is in a stage of rapid growth, with a promising future that attracts companies to actively lay out and increase capital investment. The expansion of this industry brings opportunities to the related industrial chain, especially in 2023, when grid-side energy storage and industrial and commercial energy storage are expected to become the core areas of investment.
The growth of the energy storage market is highly certain
In the first half of the year, the newly installed capacity of wind power and photovoltaic power generation in China has reached 101 million kW. To ensure power security, it is necessary to better integrate renewable energy and improve the flexibility of the power system. This provides a huge opportunity for the energy storage industry. With the continuous optimization of policies and market environment, new energy storage projects have experienced rapid development.
By the end of June 2023, the cumulative installed capacity of newly built and operational new energy storage projects in China has exceeded 17.33 million kW/35.8 million kWh, with an average storage time of 2.1 hours. In the first half of the year alone, the newly commissioned capacity is approximately 8.63 million kW/17.72 million kWh, equivalent to the cumulative installed capacity in previous years. According to current market prices, these new energy storage projects have directly driven investment of over 30 billion RMB. In the future, with the improvement of energy storage business models and further policy promotion, China’s energy storage market will continue to grow rapidly.
Capital inflows into the energy storage industry
New energy storage technologies complement traditional energy storage technologies and are widely recognized. As the industry heats up, various types of investors, including energy companies and social capital, have shown strong interest in new energy storage, which has promoted the construction and implementation of new energy storage projects.
According to industry statistics, in the first half of 2023, 97 start-ups in the domestic energy storage industry chain completed financing, with a total amount of nearly 20 billion RMB, covering various links such as energy storage system integration, PCS (energy storage system controller), lithium batteries and sodium battery cores, as well as key raw materials and battery recycling.
Most of the financed enterprises are still in the early stage, especially in the field of battery technology and its key materials. With the development of the industry, the product development cycle is shortened, and this early investment strategy is more obvious in the field of energy storage. The valuations of projects in the middle and later stages are high, and the competition is fierce. In comparison, institutions prefer to invest in early-stage enterprises with relatively reasonable valuations, intervene in project development in the early stage, and thus obtain faster investment returns after mass production or market validation.
Industrial and commercial energy storage: the area with the greatest commercial value
The commercial potential of the energy storage market on the user side in China is huge, including large-scale industrial enterprises and industrial parks, as well as various forms of commercial entities such as hotels, shopping malls, and hotels. With policy support, the price difference between peak and off-peak electricity in China continues to expand, energy storage costs continue to decline, and the improvement of electricity trading income has promoted the release of energy storage demand in the industrial and commercial sectors. Therefore, industrial and commercial energy storage is considered the market segment with the greatest commercial investment potential.
Although there are many companies participating in the industrial and commercial energy storage market, the competitive landscape is not yet fully clear. In the household energy storage field, many products are still sold under OEM. Currently, the competitive barriers of various enterprises are not obvious. Various companies, from state-owned energy central enterprises to local companies, are involved in the industrial and commercial energy storage market. In addition, many intermediate integrators and local companies have emerged. Although most of the new industrial and commercial energy storage companies have been in the stage of team formation, product design, and brand promotion since 2022 and have not truly entered the market, companies in the industry are actively exploring in the early stages of industry development. In the future, new entrants can achieve overtaking on the bend through financing, differentiated product development, expanding sales channels, and enhancing brand image.