Frost & Sullivan releases the 'White Paper on the Current Situation and Future Development of the Global Electrochemical Energy Storage Industry 2023'

Climate change and sustainable environmental development are becoming central issues."Energy storage" refers to the related technologies and measures that store electrical energy through chemical or physical methods and release it when needed.Based on storage methods, energy storage can be divided into mechanical energy storage, electromagnetic energy storage, electrochemical energy storage, thermal energy storage, and chemical energy storage.

Among different energy storage technologies, pumped storage in mechanical energy storage is currently the most mature commercial application method. Electrochemical energy storage, represented by lithium batteries and sodium-sulfur batteries, is overall in the demonstration and deployment to commercialization transition phase, and has developed rapidly in recent years. Other energy storage methods such as high-speed flywheel energy storage in mechanical energy storage, superconducting and ultracapacitor energy storage in electromagnetic energy storage, and chemical energy storage are still in the research and development stage and have not yet been industrialized for application.

Among different energy storage technology routes, pumped storage accounts for over 90% of installed capacity. However, pumped storage has drawbacks such as geographical location limitations, long construction periods, and high upfront investment. Compared to pumped storage, electrochemical energy storage has advantages such as less geographical location restrictions, shorter construction periods, and continuously decreasing costs, making it the fastest-growing energy storage method in recent years. Its market share increased rapidly from less than 1% in 2017 to about 20% in 2022. Electrochemical energy storage is expected to become the mainstream energy storage technology in the future.

The technical route of electrochemical energy storage is constantly innovating, with a clear trend towards diversified development. In addition to lithium-ion batteries, the cycle life of emerging technologies such as sodium-ion batteries is also continuously improving, and they are expected to become the future development direction of electrochemical energy storage. With the rapid development of the energy storage battery market, energy storage batteries are expected to be more widely applied in grid-side and user-side scenarios, bringing continuous impetus to industry development.

Against the backdrop of the 'carbon neutrality' goal, the growing importance of energy storage has led countries around the world to introduce favorable policies related to the energy storage industry, driving the sector into a fast development phase. Policies have become the biggest driving force for energy storage development. With the deepening of power market reforms, energy storage application scenarios will become more diverse, promoting growth in domestic and international demand.

For China, against the backdrop of entering a new development stage of the '14th Five-Year Plan', energy storage has become a top priority in the construction of our national energy system. A series of policies have been introduced to provide planning guidance and support for the application of energy storage in various links of the power system.

In 2022, the cumulative installed capacity of pumped storage globally accounted for less than 80% for the first time, while new types of energy storage represented by electrochemical energy storage accounted for 19.3% of the global energy storage market. Electrochemical energy storage is expected to become the most widely applied and potentially developed energy storage technology.

In new energy storage, lithium-ion batteries account for the largest proportion. In 2022, global lithium-ion battery energy storage accounted for 94.4% of new energy storage.

Electrochemical energy storage can be combined with new energy power generation such as photovoltaics and wind power to alleviate the problem of poor stability of renewable energy. At the same time, electrochemical energy storage can provide auxiliary services such as peak shaving, frequency regulation, AGC (Automatic Generation Control), and black start to ensure grid safety. In addition, electrochemical energy storage can play a role in peak shaving and valley filling, saving electricity costs for residential, industrial, and commercial users.

Due to policy support and the continuous expansion of clean energy power generation layout, the electrochemical energy storage industry has significantly grown in recent years in multiple countries and regions. In 2022, the global new installed capacity of electrochemical energy storage reached 69.0 GWh. In 2022, the Americas had the largest new installed capacity globally, accounting for about 30.7% of the total new installed capacity. China, EMEA (Europe, Middle East and Africa), and Asia-Pacific (excluding China) followed, accounting for 29.3%, 26.3%, and 13.7% respectively.

• The share of sustainable energy in power generation is constantly increasing.

Energy storage systems ensure the stability of sustainable energy supply by storing and releasing energy in real time, providing services such as peak shaving, frequency regulation, and power distribution for the power grid. Driven by the increasing capacity of sustainable energy, the demand for energy storage systems will grow significantly in the future.

• Moving towards clean electricity under the trend of electrification

The carbon dioxide emissions from power generation account for one-third of global carbon dioxide emissions. With the expected significant increase in electricity demand, rapid decarbonization is crucial for achieving net-zero emissions. On one hand, future CCUS technologies will gradually play an important role in decarbonizing the power industry by capturing and storing greenhouse gas emissions generated by fossil fuel power generation; on the other hand, under the trend of electrification, power systems are also accelerating their transition to clean power. As clean power becomes an increasingly important source of energy, the demand for energy storage will continue to rise to solve intermittent problems and balance power supply and demand.

• Costs of electrochemical energy storage are declining

The global average cost per kilowatt-hour of electrochemical energy storage has decreased from 1.5 - 2.5 yuan/kWh in 2018 to 0.4 - 0.7 yuan/kWh in 2022, and is expected to further decline to 0.2 - 0.4 yuan/kWh by 2027. The cost is mainly driven by advancements in battery technology, including increased energy density, reduced manufacturing costs, and extended battery life cycles. The continuous decline in electrochemical energy storage costs will stimulate the growth of the industry.

• The application scenarios of electrochemical energy storage will be more diversified.

Electrochemical energy storage can be applied in various scenarios, mainly including communication base stations, power systems, data centers, etc. In the future, with further marketization of the power market, technological progress, and enhanced market awareness, energy storage will penetrate into more scenarios such as homes, industrial factories, office buildings, communication base stations, and data centers, bringing new demands to the electrochemical energy storage industry.

• Electrochemical energy storage technology continues to upgrade, further enhancing safety

Electrochemical energy storage batteries will develop towards high power and large capacity to meet the application needs of different scenarios. At the same time, the volumetric efficiency and energy density of electrochemical energy storage batteries are expected to be further improved through optimization and integration of battery pack structures.

Improving the safety performance of electrochemical energy storage batteries is another key direction in the development of energy storage technology. On one hand, electrolytes and separators with higher thermal stability and flame retardancy will be developed to enhance the thermal safety of batteries. On the other hand, electrochemical energy storage technology will gradually integrate deeply with power electronics and digital technologies. Through more intelligent battery management and control, system safety will be actively improved.

• Sequential utilization will be a sustainable alternative to energy storage batteries

With the rapid development of the electric vehicle industry, it is expected that there will be a large amount of used electric vehicle batteries available for use in the coming years. Cascade utilization refers to the process of necessary inspection and testing, classification, disassembly, battery repair or recombination of used electric vehicle batteries to form tiered products, which are then applied to other fields such as energy storage. The cascade utilization of electric vehicle batteries extends their service life and is of great significance in terms of energy conservation and environmental protection, economic benefits, and industrial chain extension.

• New energy + energy storage, as well as CCUS + fossil energy, will become two feasible paths to achieve 'carbon neutrality'.

Electrochemical energy storage can be combined with new energy generation such as photovoltaics and wind power to alleviate the problem of poor stability of renewable energy. At the same time, electrochemical energy storage ensures grid safety by providing auxiliary services such as peak shaving, frequency regulation, AGC (Automatic Generation Control), and black start. Moreover, electrochemical energy storage can play a role in peak shaving and valley filling, saving electricity costs for residential, industrial, and commercial users. However, heavy industries such as cement, chemicals, fertilizers, and steel manufacturing account for about 26% of global carbon dioxide emissions. In terms of alternative fossil fuel technologies, such as renewable energy and green hydrogen, their short-term potential is limited. The use of carbon capture, utilization, and storage (CCUS) technology to produce hydrogen will become a powerful solution for industry decarbonization. In the foreseeable future, CCUS will become a key decarbonization technology for these difficult-to-abate industries.

Lithium-ion energy storage batteries have advantages such as high energy density, no memory effect, fast charging and discharging, fast response speed, flexible configuration, and short construction period.Widely applied in new energy power generation, grid-side, and user-side energy storage projects such as wind power and photovoltaics.

Lithium-ion energy storage batteries consist of anode, cathode, electrolyte, and separator. Anode materials typically use lithium cobalt oxide (LiCoO2), lithium iron phosphate (LiFePO4), or lithium nickel cobalt aluminum oxide (NCA), while cathode materials usually use graphite or silicon-based composite materials. The working principle of energy storage batteries is based on electrochemical reactions. When the battery is in a charging state, lithium ions from the anode detach, move through the electrolyte and separator to the cathode, and are embedded in the cathode.

Against the backdrop of carbon neutrality, the global installed capacity of lithium-ion energy storage batteries continues to grow. It has increased from 7.2 GWh in 2018 to 66.1 GWh in 2022, with an average annual compound growth rate of about 74.1%.

In the future, advancements in solid-state electrolyte technology will drive the development of the lithium-ion battery industry. At the same time, semi-solid-state batteries will gradually replace traditional liquid lithium batteries. Under long-term development trends, solid-state batteries are expected to be the direction of energy storage battery technology. Solid-state batteries have higher energy density, better safety, and longer service life.

The structure of sodium-ion batteries is similar to that of lithium-ion batteries, consisting of a cathode, an anode, and an electrolyte. However, the materials used in these components are different. The cathode of sodium-ion batteries is usually made from sodium-based materials, while the anode is made from carbon or other materials that can accommodate sodium ions. The electrolyte used in sodium-ion batteries is typically a sodium salt dissolved in an organic solvent or ionic liquid. Depending on the cathode material used, sodium-ion batteries can be divided into three technical routes, including polyanion-based cathode materials, Prussian blue compound systems, and layered oxide materials.

Sodium-ion energy storage batteries possess high energy density, long lifespan, high charge and discharge efficiency, and superior safety performance.The overseas sodium-ion energy storage battery industry is developing rapidly with numerous participants, including: Natron Energy from the United States, Faradion from the United Kingdom, Altris from Sweden, and Naiades from France. Other domestic battery companies are also actively deploying in the industrialization of sodium-ion batteries. Leading enterprises such as CATL, FNV Energy Technology, Duoflur, and Sinoma Haina have stated their plans to achieve mass production of sodium-ion batteries within the next few years.

A flow battery is a new type of rechargeable battery that consists of cell units, electrolyte, electrolyte storage and supply units, as well as management and control units. The characteristic of flow batteries is the separation of positive and negative electrode electrolytes.Each cycle operates independently, featuring high capacity, a wide range of application fields (environments), and a long service life of the cycle.Flow batteries can achieve the mutual conversion and storage of electrical energy and chemical energy. Their active material is a flowing electrolyte solution, which allows for the spatial separation of the electrochemical reaction site (electrode) from the energy storage active material, making them suitable for large-scale power storage needs.

Depending on the electrode active material,Flow batteries can be divided into all-vanadium flow batteries, lithium-ion flow batteries, and lead-carbon flow batteries.The future development direction and goal of flow battery technology are large-scale production, high efficiency, low cost, and long lifespan. It is necessary to strengthen research on key materials and battery structures, improve the reliability and durability of batteries, develop technology for large-scale production, actively carry out application demonstrations, and lay the foundation for the industrialization and large-scale application of flow batteries.

At present, the specific applications of energy storage technology in the field of new energy vehicles include but are not limited to:Lithium-ion battery energy storage, supercapacitor energy storage, flow battery energy storage, energy storage charging piles, etc.Among them, energy storage charging piles integrate new energy vehicle charging piles with energy storage solutions. Since they do not require additional grid connections, they can provide high output power, improve grid stability, and reduce installation costs. Based on innovative technologies such as clean energy generation, energy storage, and fast charging, energy storage charging piles offer higher grid flexibility and maximize the utilization rate of electric vehicles.

5G base stations are high-speed, low-latency communication devices that require a large amount of energy to maintain their stable operation. Energy storage technology can effectively reduce base station operating costs while achieving environmental protection and emission reduction, providing strong support for the sustainable development of 5G communication networks. The main application scenarios include the following:

Standby power supply:Energy storage can serve as a backup power source for 5G base stations. When traditional energy fails or is interrupted, energy storage can provide a continuous and stable power supply to ensure the normal operation of 5G base stations.

Energy dispatching:Energy storage can serve as an energy dispatching device for 5G base stations. It can store excess electricity beyond the base station's needs and release it during peak electricity consumption periods to meet the base station's energy demands, thereby reducing the electricity costs of the base stations.

Energy optimization:Energy storage can optimize the use of energy by monitoring and analyzing the power consumption of 5G base stations, improve energy utilization efficiency, and reduce base station operating costs.

Environmental protection and emission reduction:Energy storage can assist 5G base stations in achieving green and low-carbon operations, reducing energy consumption at the base stations, decreasing dependence on traditional energy sources, thereby lowering carbon dioxide and other pollutant emissions, and realizing environmental protection and emission reduction.

A Data Center (DC) is a building that provides an operating environment for centrally placed electronic information equipment. As an important component of computing infrastructure, it serves as the data hub and computing carrier supporting the development of new-generation digital technologies such as 5G, artificial intelligence, and cloud computing, playing a significant role in boosting digital economic growth. The advantages of energy storage technology in data centers include:

Reduce energy consumption costs:The energy consumption cost of data centers is very high, while energy storage systems can charge during periods of low electricity prices and discharge during periods of high electricity prices, reducing the energy consumption cost of data centers.

Improve the energy structure:Data centers typically rely on traditional fossil fuels, while energy storage systems can be used in conjunction with new energy sources (such as solar and wind energy) to improve the energy structure of data centers and reduce their dependence on traditional energy.

Reduce carbon emissions:Data center energy consumption is one of the important sources of global carbon emissions, and energy storage systems can reduce data center energy consumption and carbon emissions, thereby reducing negative environmental impacts.

Improve emergency response capabilities:In the event of natural disasters or other emergencies, energy storage systems can provide emergency backup power to data centers, enhancing their emergency response capabilities.