Carbon Neutralization —— the greatest opportunity in the next 40 years (2)

China's goal of dual carbon is to achieve carbon neutrality at the peak of carbon dioxide emissions in 2030 and 2060. Compared with several major economies in the world, this goal is the most demanding and urgent.

At present, in China's energy structure, non-fossil energy only accounts for 15.9%, clean energy (including hydropower) accounts for 36%, and coal accounts for 52%.

In order to help achieve the goal of double carbon, increasing the proportion of renewable energy in power supply and terminal consumption is the most effective way to achieve the goal of double carbon.

However, wind power, photovoltaic and other renewable energy sources on the power supply side fluctuate greatly, which leads to the next problem to be solved urgently-energy storage.

2. 1 necessity of energy storage

In recent years, with the further decline of the cost of photovoltaic modules, photovoltaic power plants have been profitable without subsidies, and a large amount of capital has poured into the photovoltaic industry. From production to operation, the scale of the whole photovoltaic industry has increased greatly, but at the same time, it has brought a problem, that is, photovoltaic can only generate electricity during the day, what should we do at night? The fan can only turn when there is wind. What should I do when there is no wind?

Daily wind speed fluctuates greatly.

With the increasing proportion of renewable energy (wind power and photovoltaic), the instability of wind power and photovoltaic not only brings short-term power unavailability, but also causes the power flow change of distribution network and affects the power quality (voltage, frequency and waveform), which has great influence on both power grid side and user side.

10 years ago, when the local power grids were not as strong as they are now, the power grid companies always refused garbage power such as wind power and photovoltaic power, which is why there were many cases of abandoning wind and light and limiting electricity in provinces with less electricity consumption.

The above situation can be avoided by storing short-term excess (inexhaustible) electricity and continuously outputting it to the Internet when there is no electricity (at night or when there is no wind).

2.2 How can energy storage be profitable

In the past, energy storage has always been a political task, because it can't make money, but now the technology has reached the bottleneck of profit, and the country has begun to add fire to the energy storage industry.

A few days later, the policy of increasing the time-of-use price was introduced:

The main purpose of the document is to continue to liberalize the peak-valley electricity price, and the time-of-use electricity price gap can reach four times if conditions permit. These two documents, one bright and one dark, are encouraging the development of energy storage industry. On the eve of technological change, it is only a matter of time before the policy is overweight and the energy storage industry realizes full profit.

At present, the grid-connected energy storage power station of large-scale power stations has been able to achieve profitability in financial accounting, but its profitability is similar to the current energy storage period under the peak-valley electricity price difference.

2.3 Power grid side energy storage

The main function of energy storage on the grid side is to regulate peak load and frequency to ensure the quality of electricity consumption, and the most commonly used means of peak load and frequency regulation is pumped storage power station.

On August 6th, the General Department of the National Energy Administration sent a letter asking for the Medium and Long-term Development Plan of Pumped Storage (202 1-2035) (draft for comments), proposing that the installed capacity of pumped storage in China will increase to 300 million kilowatts by 2035, which is 10 times higher than that in 2020, far exceeding market expectations. Previously, the industry predicted that the total installed capacity of pumped storage in China will reach1.1.300 million kilowatts in 2030, and the total installed capacity will reach1.800 million kilowatts by the end of 2060. This means that by 2030, the production master plan will far exceed the previous target of 2060. Pumped storage ushered in a development window.

The commissioning of large-scale pumped storage power stations will greatly enhance the peak-shaving capacity of the existing power grid, increase the power grid's ability to absorb renewable energy, and finally increase the proportion of clean energy in China power grid.

Pumped storage is the most mature and installed mainstream energy storage technology at present, and the power cost is the lowest among all kinds of energy storage technologies. As shown in the above figure, the pumped storage power station consists of two reservoirs with different heights, and the upper and lower reservoirs are connected with the generator set through the water delivery system.

In the low load period of power grid, the power station uses cheap valley electricity to pump water from the lower reservoir to the upper reservoir for storage, that is, to convert electric energy into gravitational potential energy. And wait until the peak load of the power grid, the power station will release the water stored in the upper reservoir to generate electricity, so that electricity can be sold at a high price.

The disadvantages of pumped storage power station are also obvious, which is greatly influenced by topography. In the case of complex terrain, the construction cost will rise sharply, and the construction period is about 5-8 years. Moreover, after the completion of the power station, due to the long-distance pipeline transportation and the cooperation of several steam turbines, the mechanical energy loss is high and the energy storage efficiency is about 70%.

At present, major local power grid companies in China make pumped storage power stations, and the design, construction or general contracting required in the process of power station construction is almost monopolized by a central enterprise-China Power Construction.

China Electric Power Construction Company includes almost all domestic head hydropower design institutes, the most famous of which is East China Survey and Design Institute located in Hangzhou, with annual revenue exceeding 10 billion, exceeding most listed companies.

Its pumped storage market share reaches 80% in China and 50% in the world, which can be said to be the first in hydropower construction in China.

The main equipment of pumped storage power station is hydraulic turbine. In this respect, the strength of traditional steam turbine plants is relatively strong, such as Dongfang Electric and Harbin Electric. However, as a mature power generation equipment, hydraulic turbine has mature technology and little price premium.

2.3 Power supply side energy storage

2.3. 1 Other forms of energy storage

Pumped storage power station is a kind of mechanical energy storage, and other mature mechanical energy storage methods include flywheel energy storage and compressed air energy storage.

According to different energy storage media, energy storage can also be divided into electrochemical energy storage, chemical energy storage, thermal energy storage and electromagnetic energy storage, but up to now, mechanical energy storage is still the most mature and lowest cost energy storage method.

At present, the application of electrochemical energy storage is the most extensive and promising. Power battery, the core component of new energy automobile industry chain, is one of the applications of electrochemical energy storage. According to different media, it can be divided into lithium ion battery, lead acid battery and sodium ion battery.

The concept of chemical energy storage is simple, but the operation process is extremely complicated. As the name implies, it is to convert electrical energy into chemical energy and store it. The most common method is to produce hydrogen by electrolyzing water.

The typical application of thermal energy storage is photothermal power station. After the sunlight is concentrated, the molten salt as the medium is melted to absorb a lot of heat, and the molten salt continues to heat water to form steam, which drives the steam turbine to generate electricity. After the sun goes down, the power station can continue to use the heat stored in molten salt to generate electricity. Photothermal power station is one of the few new energy power stations with stable energy supply.

Rendering of 50MW Photothermal Power Station

Electromagnetic energy storage includes superconducting energy storage, capacitive energy storage and supercapacitor energy storage, with high energy storage efficiency, but it is still far from practical application.

At present, the energy storage on the power supply side is mainly electrochemical energy storage and chemical energy storage, which correspond to grid-connected power stations and distributed power stations respectively.

Electrochemical energy storage

At present, all new centralized (grid-connected) new energy power stations in China need adaptive energy storage, which is mainly used for energy storage when new energy power stations fluctuate greatly. Because the on-grid electricity price of centralized power stations is fixed, there is no profit in the difference between peak and valley electricity prices, mainly to increase the on-grid electricity consumption of power stations and increase the income of power stations.

At the same time, there are also a large number of energy storage power stations at the power grid end, which have the same functions as pumped storage, peak regulation and frequency modulation, and their profit model is to buy low and sell high.

The picture is taken from a brokerage research report.

This part of energy storage is mainly electrochemical energy storage, and the more promising electrochemical energy storage is: lithium ion battery and sodium ion battery.

The advantages and disadvantages of electrochemical energy storage, represented by lithium ion batteries, are briefly discussed:

1, the cost drops rapidly.

Driven by favorable policies, the kilowatt-hour cost of lithium batteries has dropped rapidly in recent years. At present, the lithium battery energy storage power station has been mature. Under certain electricity price conditions, the internal rate of return (IRR) of energy storage power stations can reach 8%, which has reached the minimum standard for most state-owned enterprises and central enterprises to invest in projects.

2. Almost not limited by site conditions.

Chemical energy storage needs a larger site and higher safety production standards, while lithium battery energy storage is suitable for industrial parks, charging stations, high-end instruments and equipment because of its relatively low energy density and small size.

I'm afraid the cost will fall into the bottleneck.

Lithium ore resources are limited. It can be predicted that at the current development speed, in the near future, due to the rising price of upstream materials, lithium batteries will enter a bottleneck period, and the cost of lithium batteries cannot maintain the current downward trend.

4. The improvement of energy density is at the bottleneck.

Although the energy density of lithium batteries has been greatly improved in the past few years, it is still too small compared with the energy used by human beings. Moreover, the speed of energy density improvement of lithium batteries is not exponential like that of semiconductors, but slowly increases in proportion. The improvement of energy density of lithium batteries may not keep up with the demand of human beings for energy storage capacity.

Compared with lithium-ion batteries, sodium ion batteries have the advantage of low cost, and the reserves of sodium are much larger than lithium (the proven reserves are about 420 times that of lithium), so there is the possibility of large-scale application in the future. However, the number of times that sodium ion batteries can be reused is still low, and the energy density is small and uneconomical.

The advantage of lithium batteries is that with the popularization of new energy vehicles, the power batteries equipped with electric vehicles in the future can continue to be used as energy storage batteries after retirement.

In the field of electrochemical energy storage, Contemporary Ampere Technology Co., Ltd. is an absolute leader. Not only has the sodium ion battery been released recently, but the interim report shows that the energy storage business of contemporary Ampere Technology Co., Ltd. has increased by more than seven times compared with 2020.

It can be predicted from contemporary Ampere Technology Co., Ltd. that the future electrochemical energy storage market will be extremely broad.

Chemical energy storage

Chemical energy storage is mainly hydrogen energy storage. For hydrogen energy storage, the more direct profit model is that chemical enterprises invest in new distributed photovoltaic power plants to produce hydrogen by photovoltaic, and hydrogen is the manufacturing raw material of most chemical enterprises, such as hydrogen to ethylene.

In areas with good lighting conditions and abundant water resources, chemical enterprises can easily reduce manufacturing costs and make profits.

In addition, offshore wind power generation is used to produce hydrogen in coastal chemical plants, and electrolyzed water is used to produce methanol as fuel for fuel cells. Profitability depends entirely on natural conditions (wind/light resources and the length of transportation pipelines).

Because the analysis of the hydrogen energy industry chain is no longer carried out, those who are interested can read the previous article. In the future, the construction of distributed power stations with new energy and hydrogen energy storage must be an important development direction:

The future is far away —— Analysis of hydrogen energy industry chain

2.4 User-side energy storage

At present, the energy storage on the user side is mainly electrochemical energy storage. With the popularization of electric vehicles in the application end, the demand gap of energy storage at the user end will become larger and larger.

Do a simple calculation: many people use electric cars now. If the electric car uses fast charging, it will reach 75% of the power in about 1 hour, while the power in the charging pile is about 100-200kw, that is, 1 hour, 100 to 200 degrees. Before the full popularity of electric vehicles,

However, if thousands (millions) of cars are charged at the same time in an eighteen-line small county with a population of several hundred thousand (millions), the instantaneous power will reach a horrible value, and most county-level power grids can't bear the impact of such high power.

As a result, some distributed charging pile operating companies came into being, such as the fast-paced technology invested by Contemporary Ampere Technology Co., Ltd., which focuses on the integrated operation of storage, charging and inspection.

Combining photovoltaic, electrochemical energy storage and charging piles can not only greatly reduce the operating cost of charging stations (without purchasing electricity from the power grid), but also shorten the construction approval time of charging stations (without obtaining a power grid distribution license). However, the newly added photovoltaic modules and electrochemical energy storage equipment will also greatly increase the construction cost of the charging station.

There are many other client applications, such as large-scale equipment UPS, industrial park energy storage power station and so on. So I won't give examples one by one.

There are various forms of energy storage, and the most promising electrochemical energy storage industry chain is mainly analyzed here.

3. 1 Principle of electrochemical energy storage system

Among them, PCS: energy storage converter, which connects the battery system with the power grid and realizes the bidirectional conversion between DC and AC.

BMS: Battery management system, which is used for battery charging and discharging management.

BS: Battery pack, the core component, the main cost lies in the battery.

Energy management system.

The cost of electrochemical energy storage system is shown in the above figure, in which EPC refers to the proportion of electrochemical energy storage power station construction in the total contract cost. It can be seen that the cost of battery accounts for more than half of the whole system, followed by PCS energy storage converter, which are also the sectors with the highest technical content and the thickest barriers in the energy storage system.

3.2 each panlong head

Representative enterprises of energy storage batteries: Contemporary Ampere Technology Co., Ltd., Paineng Technology, BYD and Yiwei Lithium Energy.

Contemporary Ampere Technology Co., Ltd.: the undisputed absolute leader. The mid-year report shows that the energy storage business has increased by more than 7 times year-on-year, and it has absolute right to speak in the field of batteries.

Yiwei lithium energy: It has developed rapidly in the energy storage of 5G and Feng photoelectric stations, but it still ranks first in the second-line battery factory.

BYD: The whole industrial chain is covered, the technology is deeply deposited, and the overseas market is bright, but its main business is complete vehicles, and the elasticity of energy storage business may be average.

Paineng Technology: The energy storage business is pure, mainly based on customer-side energy storage, and the current performance is generally released.

PCS (Energy Storage Inverter): Sunshine Power Supply, Goodway and Jinlang Technology.

Sunshine power supply: Energy storage inverter and energy storage system are in the leading position in the global inverter market.

Goodway: Similar to Paineng Technology, it focuses on the market of customer-side energy storage inverters.

Jinlang Technology: a rookie in the field of frequency converters, it has robbed many domestic markets from the sunshine power supply within a few years of development, and the market outlook can be expected.

System integration: Hong Sheng.

EPC: Yongfu shares, garbage, is a broken design institute, or contemporary Anpu Technology Co., Ltd. will be slag if it doesn't buy shares.

Today's article is a bit long and the industrial chain is a bit simple. So far, with the support of policies, energy storage can only reach the level of investment demand of state-owned enterprises (probably a little higher than the conventional rate of return), far from reaching the level of full-scale outbreak.

If you want to invest in the field of energy storage, the most valuable batteries and inverters will inevitably break out first. As for the others, try not to touch them.