source: GF Securities Chen Zikun, Ji Chengwei
The market-oriented reform of electricity prices is accelerating. Industrial and commercial users implement market-based time-of-use electricity prices and expand the peak-to-valley price gap to drive the development of energy storage. The “investment product” attribute of energy storage has become more prominent. Among them, the main demand for energy storage on the power generation side lies in the distribution and storage of centralized new energy stations, the main demand for energy storage on the grid side is to provide auxiliary power services, and the energy storage on the user side mainly considers industrial and commercial energy storage, household energy storage, and 5G base station and data center energy storage. .
Core point of view
⚫The market-oriented reform of electricity prices has accelerated.On October 12, 2021, the National Development and Reform Commission issued the “Notice on Further Deepening the Market-oriented Reform of Coal-fired Power Generation Feed-in Tariffs”, in accordance with the overall requirements of the power system reform to “control the middle and liberalize the two ends”, clarifying that from October 15 Orderly liberalize the on-grid electricity prices for all coal-fired power generation, expand the range of fluctuations in market transaction electricity prices, abolish industrial and commercial catalog electricity prices, and further give play to the important role of market mechanisms in ensuring the security of power grids.
⚫Power generation side: change from “market coal-planned electricity” to “market coal-market electricity”.Since 2021, the high demand for electricity has increased the shortage of coal supply. Coal prices have risen by more than 135% since the beginning of the year, and the increase in electricity prices has been limited by government regulation. The continued deepening of the contradiction between coal power supply and demand has directly led to the current round of power rationing crisis. The “Notice” clearly and orderly liberalize all coal-fired power generation through the power market for market-oriented transactions, forming an on-grid electricity price within the scope of “base price + fluctuations”. At the same time, the scope of price fluctuations in the coal-fired power generation market will be expanded, from the current rise of no more than 10%, no more than 15%, to no more than 20% in principle, and market transaction prices for high-energy-consuming companies are not subject to rises.20 % Limit, the spot price of electricity is not limited by the above range. According to data from the China Electricity Council, from January to August 2021, the national market-oriented trading power was 2.4 trillion kWh, a year-on-year increase of 23.3%, accounting for 43.8% of the total social power consumption. Promote the price mechanism of market formation.
⚫Electricity consumption side: Cancel the electricity sales price in the industrial and commercial catalogue, and promote the marketization of industrial and commercial electricity consumption in an all-round way.The “Notice” clearly and orderly promotes all industrial and commercial users who have not yet entered the market to enter the electricity market, cancels the sales price of industrial and commercial catalogues, and maintains the stability of electricity prices for residents, agriculture, and public welfare undertakings. At the same time, various power generation plans will be liberalized in an orderly manner, the construction of the electricity market will be comprehensively promoted, the connection with the time-of-use electricity price policy will be strengthened, and the full marketization of electricity consumption by industrial and commercial users will be promoted.
⚫The institutional construction for building a new power system is becoming more and more perfect, and the potential for industrial and commercial distribution and storage is opening up.The market-oriented reform of coal-fired power generation on-grid electricity prices has truly established a market-based electricity price mechanism that “can fall and rise”, which is conducive to better playing the role of the market in the allocation of power resources, further ensuring the safe and stable supply of power, and supporting new types of power System construction and service energy green and low-carbon transformation. Industrial and commercial users fully implement market-based time-of-use electricity prices and expand the peak-to-valley price gap will further drive the development of energy storage. The “investment product” attribute of energy storage is becoming more prominent, and the space for industrial and commercial distribution and storage is fully opened.
The top-level design of energy storage development was officially launched, and the industry turning point trend has already appeared.On July 15, 2021, the National Development and Reform Commission and the National Energy Administration officially issued the “Guiding Opinions on Accelerating the Development of New Energy Storage”, clarifying that by 2025, the development of new energy storage (except pumped storage) from the initial stage of commercialization to large-scale development Change, the installed capacity of new energy storage will reach more than 30GW, which is nearly ten times higher than the cumulative 3.3GW in 2020. The policy clearly proposes to coordinate the development of special plans for energy storage during the “14th Five-Year Plan” period, actively promote the diversified development of energy storage on the power supply side, the grid side, and the user side, and build a new type of energy storage into a carbon-neutral energy sector by 2030. One of the key supports. The “Opinions” address the problems in the development of the energy storage industry, clarify and improve the independent market position of new energy storage, improve the price mechanism of new energy storage and the incentive mechanism for “new energy + energy storage” projects. The official version of the “Opinions” is released to further clarify The development direction of energy storage, the industry has officially entered a period of rapid development. According to our “Energy Storage Industry Report Series 1: Brewing Big Changes and New Opportunities in the Energy Storage Market” released on July 26, we estimate that the global energy storage system demand may exceed 300GWh by 2025, and according to EVTank’s statistics in 2020, global energy storage lithium batteries Shipment volume is 28.5GWh, with great growth potential.
1. Energy storage on the power generation side:
In terms of new energy installed capacity,The main demand for energy storage on the power generation side lies in the distribution and storage of centralized new energy plants. In 2020, centralized photovoltaics will account for about 2/3 of the global new photovoltaics. With the introduction of the dual-carbon target and the arrival of photovoltaic parity nodes, it is expected in the next five years The global growth rate of new photovoltaic scale exceeds 20%, and the growth rate of new wind power scale exceeds 15%.
In terms of permeability,In 2020, various provinces have successively introduced energy storage facilities with 10%-20% power and 2 hours backup time for new energy stations. According to our estimates, the global penetration rate of new projects equipped with energy storage in 2020 will reach 17.6%, which is expected to be 2021-2023 The penetration rate of new projects will increase by 7% annually. After energy storage parity in 2023, the storage of stock projects will be economical, the penetration rate of new projects will increase by 10% annually, and the demand for storage of stock projects will increase by 1% annually.
In terms of power ratio,The energy storage requirements of each province are between 10%-20%. Assuming an average annual increase of 2% in the next five years, it can stably reach 20% in 2025. Regarding the duration of power backup, the distribution and storage of new energy stations is mainly 2 hours.
2. Energy storage on the grid side:
In terms of permeability,The main demand for grid-side energy storage is to provide auxiliary power services. Assuming that the optimal power ratio of coal-fired storage combined to provide auxiliary power services is 3% of thermal power units, we estimate that the grid-side energy storage penetration rate will be 1.8% in 2020. Benefits In 2020, the accelerated introduction of energy storage participation ancillary service compensation mechanism and the profitability of the project are expected to achieve a rapid increase in the grid-side energy storage penetration rate in the next five years.
In terms of backup power time,Energy storage participates in frequency modulation and more consideration is given to short-term capacity adjustment, with 0.5 hour as the main; energy storage participates in peak shaving for 4 hours, and an average of 2 hours is used for power backup.
3. Energy storage on the user side:
Mainly consider industrial and commercial energy storage, household energy storage, and 5G base station and data center energy storage. Assuming that in distributed photovoltaics, the ratio of industrial and commercial photovoltaics to household photovoltaics is 4:1, the energy storage penetration rate of industrial and commercial configurations increases year by year with the expansion of the peak-to-valley price difference and the decrease of energy storage system costs, and the backup time is mainly 4 hours. Taking into account the low electricity prices of Chinese residents and the low acceptance of energy storage by the public, it is expected that the increase in household energy storage will mainly come from developed markets such as Europe and the United States, and it will also be based on the 4-hour backup period.
The high energy consumption attributes of 5G base stations and data centers force operators to reduce overall electricity costs by equipping energy storage for comprehensive energy management. At the same time, there is a clear demand for lithium batteries to replace UPS lead-acid batteries. The superimposed policy end explores data center energy storage to participate in grid interaction To improve the efficiency of resource use, it is expected that the distribution and storage permeability will achieve a rapid increase, and the energy storage period will also be mainly 4 hours.
Authors of this article: Chen Zikun, Ji Chengwei, source: GF Securities, original title: “Electricity price market reform accelerates, energy storage ushered in a historical turning point”
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