New Material Intelligence NMT | 2023 Can the energy storage investment continue to be brilliant?

In 2022, energy storage will drive into the fast lane, generating electricity at peak and valley levels, ensuring the safety of the power grid. Under the two-way impact of supply chain disruption and many favorable policies, with the gradual promotion of China’s “dual carbon” strategy, the proportion of energy storage continues to rise. The year 2022 can be called the first year of the energy storage explosion, so can energy storage investment continue to be brilliant in 2023?
Energy storage has become the focus of attention of major securities companies, implying new investment opportunities
According to the 2023 A-share investment strategy report of securities companies, “new energy” has become a high-frequency word of concern for many securities companies such as Ping An Securities, Guotai Jun’an Securities, and Huaxi Securities. They said that in 2023, more investment opportunities will be created in the new energy field, with energy storage being considered as one of the three major sectors in the new energy field. New Material Intelligent NMT | Can the energy storage investment continue to be brilliant in 2023? https://store.stoneitech.com/
Energy transformation is the development trend of China and even the world. The “Fourteenth Five-Year Plan” for Modern Energy System proposed that by 2025, China’s electrification level will continue to improve, and electric energy will account for about 30% of terminal energy consumption, which also gave birth to new investment opportunities in the energy storage industry in 2023. With the increasing share of new energy, photovoltaic and wind power in power generation, the instability of renewable energy power generation has led to the demand for energy storage. At the same time, new energy storage has become an important way to solve the problem of grid consumption under the background of rapid development of renewable energy. With the growth of installed capacity of new energy such as wind and electricity, the demand for energy storage in the power system has also increased rapidly.
Sustained policy benefits and broad energy storage market space
There are three major markets for global energy storage, namely China, the United States and Europe. At present, more and more people accept energy storage as the mainstream power technology, and driven by the goal of net zero, the energy storage system is growing rapidly. In 2022, the world’s new installed capacity is expected to reach 35.5GWh. According to the analysis of GlobalDate data, it is estimated that the global electrochemical energy storage will reach 92.2GW in 2026. It not only has a large demand for installation, but also has a very broad development space. It is predicted that the growth rate of China’s large reserves may be the fastest in 2023, followed by the United States and Europe. The development of domestic energy storage is divided into three stages. The first stage is the early subsidy stage, the second stage is the stage of entering into practical application, and the third stage is the stage of meeting the economic application. With the continuous introduction of favorable domestic distribution and storage policies, large energy storage installations are expected to usher in rapid development. Since 2022, China’s Inner Mongolia, Shaanxi, Shandong, Henan and other places have successively issued mandatory allocation and storage policies.
New Material Intelligent NMT | Can the energy storage investment continue to be brilliant in 2023?
In terms of development model, with the introduction of energy storage support policies, benefiting from the good business model of “new energy+energy storage”, the integration of “photovoltaic+energy storage” and household light storage may become a new trend in the future. From the perspective of segmented application scenarios, domestic user side energy storage mainly focuses on industrial, commercial, and industrial parks. In 2021, the proportion of user side energy storage in domestic new energy storage will reach 24%, and industrial and commercial parks and industrial parks will account for the absolute majority, accounting for more than 80% in total. It is also the mainstream use of user side applications. For overseas household energy storage, the market space is expected to further expand in 2023 under the catalysis of geopolitical factors. For China’s large-scale energy storage industry, which is still in the early stages of industry development, the profitability of the industry in 2023 is expected to continue to improve with the assistance of various factors such as follow-up policies, technology, scale, and so on.
Cost is expected to decrease and industry investment prospects are promising
From the perspective of the energy storage industry chain, it is mainly divided into three major links. First, upstream battery materials overlap with the upstream industrial chain of new energy vehicles to a certain extent; The second is its own link. Battery packs account for more than 60% of the total cost, inverters account for 10% of the cost, as well as battery management systems and energy management systems. The third is downstream customers, including some large power generation groups and industrial and commercial distributed users. On January 7th, according to the latest news released by the National Energy Administration, with the continuous increase in the production of lithium batteries for energy storage in China, the cost of lithium iron phosphate batteries is expected to decrease. Meanwhile, in the past 10 years, the cost of lithium ion battery packs has decreased by more than 80%. Due to the improvement of the upstream supply and demand structure, the system cost may be reduced and the performance will be better.
At present, domestic energy storage has entered the stage of economic application. Since 2022, whether on the power generation side or on the power consumption side, the on-grid price, including the terminal price, has basically met the economic applicability. In the future, it will enter the stage of marketization, and the dependence on subsidies will become lower and lower. At the same time, the reduction of energy storage cost and the continuous growth of demand in 2023 will bring more investment opportunities in the industry. Many energy storage system integrators transformed from power equipment, such as Xinfeng, Kehua Data, Shangneng Electric, and Jinpan Technology, have emerged in succession. Their main business of power equipment is robust and strongly related to new energy. They not only have the technical advantages of system integration and grid connection, but also have some overlap between the energy storage customers and the main business of power equipment in customer channels.
To sum up, in 2022, energy storage was in the early stage of the industry explosion, and the stock price performance presented a logical verification stage and a boom overflow stage. With the continuous growth of the energy storage industry, South China’s potential new blue chip companies have laid out energy storage. In 2023, the energy storage industry is expected to remain strong, with significant development space and investment opportunities.