The term "volume," which is applicable to describe the photovoltaic industry, is equally fitting when used to characterize the energy storage sector. Due to the intermittent and fluctuating nature of photovoltaic power generation, energy storage systems are required to smooth and stabilize the operation of the electrical grid, and new types of energy storage are also referred to as the twin brothers of photovoltaics.

From April 10th to April 13th, the largest new energy storage exhibition since the beginning of 2024, the 12th International Energy Storage Summit and Exhibition (hereinafter referred to as "Beijing Energy Storage Exhibition"), was held at the Shougang Park in Beijing. Data disclosed by the Zhongguancun Energy Storage Industry Technology Alliance shows that the exhibition covered an area of 150,000 square meters, with more than 500 first-line energy storage brands participating, and approximately 200,000 professional visitors attending. Both the number of exhibitors and the number of attendees increased by about 60% compared to last year.

Advertisement

At 9 a.m. on the first day of the exhibition, with questions such as "Has new energy storage taken off? How to break through the internal volume?" and "What are the development trends of energy storage technology and products?", the First Financial reporter squeezed into the vast crowd of exhibitors, customers, and professional visitors, searching for answers in the 12 themed exhibition halls at Shougang Park in Beijing.

As competition intensifies, energy storage cells are becoming increasingly "larger."

"Tomorrow's energy storage exhibition is worth a visit; whether it's cells or systems, they are highly homogenized! Basically, after visiting one exhibition hall, there's no need to visit the others," said Zhang Jianhui, Chairman and General Manager of Haibo Si Chuang, at the opening ceremony the day before the exhibition. The next day, after racking up 20,000 steps on WeChat, the First Financial reporter expressed a deep agreement with his viewpoint.

Taking the cell segment, which accounts for 60% of the overall energy storage system cost, as an example.

The trend of energy storage cells becoming increasingly "larger" is significant, with battery manufacturers engaging in close competition, shifting from competing for resources and scale to competing in product and service quality, with the mass-produced energy storage cell capacity increasing from 280Ah to over 300Ah.

Looking first at photovoltaic companies, Trina Solar (688599.SH) is expected to officially ship its new generation of flexible energy storage battery cabin Elementa 2, equipped with self-produced 314Ah energy storage cells, in the second quarter of this year; Jinko Energy (688223.SH) introduced its self-developed 314Ah energy storage cells for the first time at this exhibition, and it is expected to achieve the first phase of 5GWh energy storage cell product capacity and be ready for mass production and shipment in the third quarter of 2024.First Financial Daily reporters, through exhibition visits and statistical analysis, have learned that companies such as Ruipu Lanjun, Envision AESC, Sunwoda, Trina Storage, HaiChen Storage, Penghui Energy, CTP, CATL, NARI, GANFENG Lithium, EVE Energy, Guoxuan High-Tech, ShengHong Kinetic, Haopeng Technology, HaiJi New Energy, and Lishen Battery have begun mass production and delivery of nearly 30 energy storage cell products with a capacity of over 300Ah.

Some have even "rolled out" "ultra-large" cell capacities of 500Ah+. Hive Energy has released a 730Ah large-capacity energy storage short-blade cell, claiming to double the cell capacity by thickening the dimensions based on the 350Ah energy storage cell. NARI has globally premiered a 690Ah ultra-large capacity energy storage battery, claiming to have achieved a "zero" degradation system for five years.

However, is it really the case that the larger the energy storage cell, the better?

One must eat one bite at a time and take one step at a time. Wu Dianfeng, General Manager of the Product Center at Jinko Energy, told First Financial Daily reporters that the 314Ah capacity cell product is the same size as the previously mature 280Ah cell product, and the module and Pack production lines can be compatible. If it were another size, or even larger capacity storage, it would mean that the existing Pack in the entire energy storage industry would not be compatible, which would be a waste for the industry. "It is expected that the 314Ah capacity cell will start in the second half of the year and will become the market mainstream in the next few years, replacing the 280Ah capacity cell."

Homogenized competition, who pays the bill?

Homogenized competition is not only present in the cell segment discussed above. The emergence of "involution" in the entire energy storage industry chain is sometimes a "reluctant move."

"Companies all want to 'survive' in the market, and no one wants to 'lag behind'." During the exhibition visit, many salespeople at the exhibition booths and industry insiders told the reporter that participating in exhibitions every few months or iterating new products is due to the fierce competition in the entire industry.

According to the "Energy Storage Industry Research White Paper (2024)", by the end of 2023, more than 100,000 energy storage companies have entered the market, with tens of thousands newly established within a year. The technological progress of the photovoltaic industry has shown its dividends in 2023, with favorable policies and documents, and other factors jointly promoting the rapid development of energy storage.

The inevitable result of the industry's "overheating" is elimination and reshuffling."By 2024, the top ten energy storage system integrators will capture more than 80% of the market share." Research institution Gaogong Industry Research Institute points out that the overall supply of China's new energy storage market will exceed demand, and the competition in the energy storage system integration segment is more fierce than in the battery cell segment, with more than 50% of energy storage system companies (including large-scale storage systems, commercial and industrial storage systems, household storage systems, etc.) expected to be eliminated.

Moreover, the emergence of this industry phase has exceeded the expectations of industry players.

"The cycle of industry competition is earlier than imagined." Wang Pengcheng, the founder of HaiChen Energy Storage, said in an interview with a reporter at the end of last year that the market was quite hot at the beginning of 2023, with many power battery companies and cross-industry entrants believing that there is a large space for energy storage, making the industry more crowded. The demand for household and large-scale storage in the European market has slowed down, and the domestic market has not yet resolved a more perfect market-oriented mechanism of "who benefits, who pays."

The "fierce battle" in energy storage has just begun.

Opinions are divided on whether this phenomenon is good or bad.

Let's look at a set of data first. In terms of newly added installation scale, the newly added installation scale of domestic new energy storage in 2023 is nearly 50GWh, three times that of 2022. According to the incomplete statistics of the CNESA Global Energy Storage Database, a total of 1,703 tender notices and 1,142 winning notices were tracked in 2023, with both the number of tender and winning notices reaching a historical high, three times that of the same period in 2022.

Huawei, which has been focusing on the overseas energy storage market in the past few years, has also started to enter the domestic market. On April 10, Huawei Digital Energy released a new "wind and liquid intelligent cooling" commercial and industrial energy storage product. Zhong Mingming, the president of the company's commercial and industrial smart photovoltaic business, said that under the dual influence of market demand and economic drive, the market space for China's commercial and industrial energy storage is continuously expanding.

However, although the installation results show that the domestic energy storage market is indeed advancing rapidly, the cost is that companies are facing a situation where "there is no money to be made."

Taking the winning price of the energy storage system in March 2024 as an example, the lowest price of a 4-hour energy storage system was once again refreshed, with a weighted average quote of 0.56 yuan/Wh. The average price of 0.56 yuan/Wh has already dropped by 60% compared to the average price of 1.5 yuan/Wh at the beginning of 2023.

This "water level line" of the energy storage system's winning bid has basically dropped to the cost price and can be called "unbeatable." Sun Wei, the president of Trina Energy Storage, said that the breakthrough in the energy storage industry cannot rely on price competition, and the integration of multi-scenario products is the key."I am not worried about the involution in the energy storage industry; this is precisely evidence of its vitality, prosperity, and a bright future," said Tian Qingjun, Senior Vice President of Envision Energy, who believes that the logic behind the reduction in prices is still technological and product innovation. Technological innovation leads to lower prices, which is a good thing. Only when prices are reduced can resources that were previously undevelopable be tapped, naturally maturing the market.

"Do not overestimate the turmoil in the energy storage industry in the past two years, nor underestimate the trend of the industry over the next decade," an energy storage system integrator at the exhibition metaphorically told the reporter. "If we liken energy storage to a mountain, we are currently at the foot of the mountain, just starting to climb, not even halfway up."

Whether the "uproar" will lead to "prosperity" or "a mess" remains to be seen. Fundamentally, the future breakthrough of the energy storage industry relies on technological and product innovation, as well as the energy storage companies' ability to control the full-cycle operation and maintenance capabilities and comprehensive costs of energy storage power stations, etc., and the "bottom line" of ensuring safety for new types of electrochemical energy storage.