In the eyes of industry insiders, reducing costs and increasing efficiency is the "main theme" of the energy storage industry in 2024. The key to reducing costs and increasing efficiency is innovation. Energy storage companies can reduce costs and increase efficiency not only enhance their competitiveness and profitability, but also Promote the application of new materials, new processes, and new technologies.

Technology iteration in the energy storage industry is accelerating, 300Ah+ energy storage cells have not yet stabilized, and 500Ah+ energy storage cells have arrived. Today, the war to reduce costs for energy storage technologies such as PCS, batteries, and systems is quietly unfolding.

In the eyes of industry insiders, reducing costs and increasing efficiency is the "main theme" of the energy storage industry in 2024. The key to reducing costs and increasing efficiency is innovation. Energy storage companies can reduce costs and increase efficiency not only enhance their competitiveness and profitability, but also Promote the application of new materials, new processes, and new technologies.

New technologies that reduce costs and increase efficiency are accelerating

Since last year, as the individual capacity of energy storage cells has become larger and larger, the stand-alone capacity of the energy storage system has also expanded simultaneously. Stand-alone 5MWh + energy storage products are accelerating, and 500Ah + energy storage cells may become the mainstream of the market. Today, the number of companies above 500Ah+ batteries is growing. Ningde Times 530Ah, Tianhe Energy Storage 530Ah, Yiwei Energy Storage 560Ah, 628Ah, Xiongtao Shares 580Ah, Honeycomb Energy 660Ah, 710Ah, Haichen Energy Storage 1130Ah... Many companies are fighting on the large-capacity battery circuit.

Song Bai, vice president of Kunyu Power Supply Co., Ltd., said in an interview with a reporter from China Energy News that the large-capacity battery design will effectively reduce the BOM cost of battery materials, and also the utilization rate of materials in the actual production process. It will be improved, thus bringing better price competitiveness. With the rapid development of the energy storage industry, the system operating cycle is getting shorter and shorter, and many technical issues and design solutions need to be further improved as the future market continues to develop. "In addition, it should be noted that companies should not take the development of a certain type of battery cell as their entire direction. The application of automatic production lines has also brought difficulties in transformation and high transformation costs."

"Energy storage companies list cost reduction and efficiency improvement as the highlight, which not only reflects the industry's focus on short-term cost competitiveness, but also strategic considerations for the improvement of the company's intrinsic value and long-term sustainable development." The relevant person in charge of Tianhe Energy Storage told the China Energy News reporter,"Reducing costs and increasing efficiency is a systematic project, including R & D innovation, supply chain management, business model innovation, responding to market demand, etc., and is not simply compressing costs."

Lu Hefeng, deputy general manager of Jinlang Technology, told a reporter from China Energy News that the key to reducing costs and increasing efficiency for energy storage companies lies in technological innovation and system optimization, but it must also be based on product reliability. Innovation in energy storage technology is the main driving force for reducing energy storage costs. Through technological progress, low-cost materials can be equivalently replaced and upstream cost pressure for energy storage can be reduced. At the same time, technological innovation can improve the efficiency of energy storage systems, extend the full life cycle life of energy storage batteries, and increase the power density of energy storage systems, thereby achieving cost reductions in multiple dimensions. For example, a new generation of liquid-cooled energy storage systems can improve efficiency, reduce costs, and achieve higher annual system availability and power density.

Chu Pan, head of the energy storage research and development department of PetroChina Shenzhen New Energy Research Institute, said that there are many paths for the energy storage industry to reduce costs and increase efficiency. In the past three years, cost reduction and efficiency improvement in the energy storage field have been mainly achieved through scale. For example, The size of the energy storage market in 2023 is almost 10 times that of 2021. The cost reduction caused by such a scale effect is very direct. However, the potential for cost reduction through simple scale is limited. It is expected that starting from 2024, the driving force for cost reduction of energy storage projects will gradually shift from cell elements to system elements, and the cost reduction of system elements will mainly rely on advanced technologies, especially Advanced integrated technologies, manufacturers who master cutting-edge power electronics technology, large current balancing technology, complex control technology, and electrical topology technology will take the lead in this regard.

Backward technology production capacity opens the knockout round

It is worth noting that the energy storage industry has not only launched technological cost reductions in the field of battery cells, but also accelerated iteration of cost-reduction technologies such as energy storage inverters (PCS) and systems. Taking PCS as an example, as a key component in the energy storage system, lower costs and higher efficiency can be achieved through power improvement and modular clustering management.

"As the battle for cost reduction in PCS, batteries, systems and other aspects begins, the elimination of previous backward production capacity will be accelerated." Lu Hefeng believes that the application of new technologies and large-scale production will improve the standards of the entire industry and eliminate some production capacity that cannot be upgraded or adapted to new technologies. In particular, technologies with low efficiency, poor energy density, large environmental impact, high cost, insufficient safety and stability, and inability to meet current market needs and standards often lack continuous R & D investment and cannot adapt to the rapidly developing market demand. Demand and increasingly stringent environmental requirements will be eliminated in market competition. In the eyes of industry insiders, the elimination and upgrading of backward energy storage technologies is the only way for the development of the energy storage industry.

Chu Pan told the reporter of China Energy News:"The battery cell capacity is getting larger and larger, and has evolved from the mainstream model of 50Ah in 2018 to the mainstream model of 314Ah in 2024. In this process, the unit cost of the battery cell has been greatly reduced, and the performance of the battery cell, especially the consistency, has been continuously improved. However, the production and manufacturing iteration of batteries requires a large amount of capital and technical investment. The finalization and large-scale sales of each battery cell require 2-3 years in advance of technical layout and a large amount of R & D funds. The R & D investment of leading enterprises in batteries exceeds 10 billion yuan/year. Every time a new battery cell is launched, it is essentially a reshuffle of the industry through the dual advantages of technology and capital. Battery cell factories that cannot keep up with the pace will gradually be eliminated by the market and industry. Similarly, the scale of PCS units used in the energy storage field is getting larger and larger, from a hundred kilowatts a few years ago to a current 4 megawatts. After 5-6 years of product change, a few domestic leading companies have occupied The domestic PCS market has more than 70% share."

According to the relevant person in charge of Tianhe Energy Storage, not all old production capacity will be eliminated immediately. Some production capacity that still has certain cost performance, can meet specific market needs, or has competitive advantages in local markets may continue to exist for a certain period of time. At the same time, the elimination process is also accompanied by production capacity transformation and upgrading, that is, through technological transformation, the original production capacity is adapted to new market and technical requirements, thereby continuing its life cycle.

Chen Chao, general marketing manager of Xiamen Kehua Digital Energy Technology Co., Ltd., also believes that the elimination of energy storage capacity is not achieved overnight. The elimination of old production capacity is often affected by many factors, including technological maturity, market acceptance, and policy support. Therefore, in the war on technological cost reduction, although new technologies and products have obvious advantages, the elimination of old production capacity still requires a certain amount of time and process. For energy storage companies, seizing the opportunity of technological innovation and improving product competitiveness will be the key to coping with production capacity elimination and achieving sustainable development.

How to move steadily and far in fierce competition

Regarding cost reduction, industry insiders interviewed generally believe that promoting the energy storage industry to develop in an efficient, environmentally friendly and safe direction through technological innovation and policy guidance is the key to achieving energy transformation and green and low-carbon development. In the process of pursuing cost reduction, enterprises should focus on sustainable development and long-term benefits.

"In the process of pursuing cost reduction, companies need clear goals and formulate practical paths, which includes analyzing the cost structure, identifying costly links, and formulating corresponding improvement measures." Chen Chao said that companies should increase investment in R & D and promote technological innovation to improve production efficiency and reduce costs. For example, optimizing product design, improving production processes, adopting new materials, etc. In addition, enterprises should establish a sound cost management system to finely control various costs. Reduce unnecessary waste and loss by optimizing procurement, production, sales and other aspects. Enterprises should also establish a stable supply chain system, establish good cooperative relationships with suppliers, and collaborate with upstream and downstream enterprises to achieve reduction in procurement costs, resource sharing and complementary advantages, and reduce overall operating costs.

Lu Hefeng believes that, first of all, we should continue to increase investment in research and development and promote breakthroughs in key technologies, such as increasing energy density and optimizing system integrated design; second, we should optimize supply chain management, reduce raw material procurement costs, and ensure material quality and supply stability. Thirdly, production efficiency can be improved, automated and intelligent production lines can be adopted, and labor costs and management costs can be reduced. Some powerful companies are also expanding their production scale and using the scale effect to reduce fixed costs per unit of product.

Chu Pan said that the energy storage industry has little potential to continue to rely on scale and large-scale to reduce costs and increase efficiency. If energy storage companies want to survive and develop in the fierce competition, they need to make simultaneous efforts in integrated technology, operation and maintenance technology and security technology. In the future, the development of energy storage will be more refined and lean, and continuous R & D investment, capital investment and talent investment are indispensable.