“New energy distribution and storage” and “independent energy storage” are the main types of large-scale storage and installation equipment in China. Both are driven by the policy of forced allocation of new energy sources, and there is immediate demand for large-scale growth.
The Zhitong Finance App learned that Ping An Securities released a research report saying that global demand for energy storage is booming, emerging markets are bringing in new volume, demand for large storage racetracks is booming, and there is strong certainty about the growth of new types of energy storage. In 2023, 46 GW of new energy storage systems were added in the world, doubling the year-on-year increase. Among them, large storage is the main type of energy storage installed in the world. In 2023, 32.7 GW was added to the global energy storage system (only new energy storage, same below), accounting for 71% of the installed capacity of new energy storage. At present, domestic large reserves have obtained a certain market position in overseas markets, but the competitive pattern of overseas large reserves is better, and leading companies are expected to actively enter overseas markets.
The main views of Ping An Securities are as follows
Domestic large reserves: Policies lead installation, commercialization needs to be improved.
China is the largest storage market in the world. In 2023, Dacheng added 19.8 GW of installed capacity, accounting for 60% of the world's installed power. The bank estimates that in 2024/2025, Global Storage will add 57.8/77.8 GW of installed capacity, with growth rates of 77%/35%, respectively. In 2024/2025, China Big Storage will add 32.0/41.8 GW of installed capacity, respectively, with a power increase of 62%/31% year-on-year. “New energy distribution and storage” and “independent energy storage” are the main types of large-scale storage equipment in China. Both are driven by the policy of forced allocation of new energy sources, and there is immediate demand for large-scale growth. Independent energy storage can obtain benefits through market-based methods. The utilization rate and economy are superior to new energy storage, and may become the mainstream installed form of large-scale domestic storage. At this stage, China's independent energy storage revenue structure relies on capacity leasing. The revenue level is lower than that of the US and European storage. The business model needs to be improved, and the electricity market needs to be further developed.
Overseas large reserves: developed markets and emerging markets have blossomed more.
Compared with the domestic market, the competitive pattern and profit level of overseas large reserves are relatively superior. Leading domestic companies seek to go overseas to the US, Europe, and Middle East markets. The US and Europe have a high degree of marketization of electricity. Large storage projects can obtain reasonable economic returns, high market barriers, and high gross profit. The bank expects 11.5/14.3 GW of new installed capacity to be 11.5/14.3 GW in 2024/2025, an increase of 45%/25% year on year, and 6.3/9.2 GW of new installed capacity in the European storage market, respectively, an increase of 126%/46% year on year. The growth rate of emerging markets in the Middle East is strong. The government is promoting the deployment of centralized optical storage projects from the top down, and the scale of individual projects is huge; domestic enterprises compete for emerging markets with excellent delivery capacity and cost performance. Saudi Arabia has formulated a plan to bid for a 24 GWh battery energy storage project from 2024 to 2025, and there is plenty of room for large-scale storage development. The US, Europe, and Middle East markets have blossomed a lot, and there are excellent opportunities to save money and go overseas.
Technical route: Mainly lithium batteries, and the new route is competing for popularity.
Common energy storage technologies mainly include mechanical energy storage, thermal energy storage, electromagnetic energy storage, electrochemical energy storage, and hydrogen energy storage. At this stage, pumped energy storage in mechanical energy storage is the main form of energy storage installed globally, and lithium battery energy storage is the main form of installation of a new type of energy storage (collectively known as energy storage technology routes other than pumping). Different energy storage methods have different power levels and discharge times, and are suitable for different scenarios of power systems. Energy storage, liquid flow batteries, and compressed air have a large scale, low theoretical cost, and are suitable for long-term energy storage; flywheel energy storage and electromagnetic energy storage respond quickly and have a high cycle times, and are suitable for frequency modulation applications; lithium-ion batteries have a wide scale and discharge time range, strong versatility, and mature industrial chain, and will be the main force in energy storage construction for a long period of time.
Industrial chain: The competitive pattern of overseas large storage systems is superior.
The main links in the lithium battery energy storage industry chain include energy storage batteries, PCS, system integration, temperature control and fire protection. Demand side growth is strong in all sectors, but competition on the supply side is fierce. The energy storage battery sector presents a “one super many strengths” pattern, with Ningde leading the market share in the times. The competitive pattern between PCS and system integration is divided at home and abroad. The domestic market's “internal price roll” is serious, overseas market barriers are relatively high, and the competitive pattern is superior to domestic competition. With their product strength and brand channels, large domestic storage system integrators have gained a certain market position in overseas markets, and are expected to seize large storage opportunities in the US, Europe and emerging markets and obtain rich profits.
Investment suggestions: We recommend Sunshine Power (300274.SZ), which is the world leader in the large storage market; it is recommended to focus on Artes (688472.SH), which is deeply involved overseas and has an impressive growth rate of large storage performance; and Shangneng Electric (300827.SZ), which has laid out emerging markets and is progressing smoothly overseas.
Risk warning: 1. Risk of demand growth in various markets falling short of expectations. 2. Risk of increased competition in the global market. 3. The risk of tightening market restraint policies. 4. Measure risks associated with subjectivity.
