The significance of energy storage is becoming increasingly evident. In response, numerous countries worldwide have implemented incentive measures for the energy storage industry to eliminate market development barriers. In recent years, China has also expedited the introduction of relevant policies to foster the growth of the energy storage sector. This progress has been further propelled by the robust impetus from the battery power industry ecosystem. Consequently, the energy storage industry has entered a phase of marketization and large-scale development.
I. Definition of Energy Storage
Energy storage is a technology that involves storing various forms of energy using specific devices or physical media through different methods, for subsequent utilization. By storing and releasing energy across time and space, it ensures energy balance and promotes sustainable energy use. Energy storage plays a crucial role in advancing renewable energy development, enhancing energy utilization efficiency, and ensuring the reliability of energy systems.
II. Energy Storage Technology Routes
Energy storage can be categorized into several types based on different technical paths: electrochemical energy storage, mechanical energy storage, thermal energy storage, and hydrogen energy storage. Among these, pumped hydro storage continues to hold a significant position. Electrochemical energy storage, particularly lithium-ion and sodium-ion batteries, is anticipated to be the primary growth driver in the future energy storage market. New energy storage technologies, such as solid-state batteries and hydrogen energy storage, although not yet fully mature, are expected to bring about disruptive changes in the future.
1. Mechanical Energy Storage
Mechanical energy storage encompasses pumped hydro storage, compressed air energy storage, and flywheel energy storage. Pumped hydro storage currently dominates the global energy storage market, accounting for approximately 90%. It is characterized by mature technology, large capacity, and high efficiency. However, it faces limitations in terms of geographical site selection and construction duration. Compressed air and flywheel energy storage, despite their currently small market share, offer advantages in specific applications, such as frequency regulation and emergency power supply. With advancements in technology and cost reduction, their application scope is expected to expand.
2. Electrochemical Energy Storage
Lithium-ion batteries hold an absolute advantage in electrochemical energy storage, representing over 90% of the market. They are known for their fast charging and discharging capabilities and high overall efficiency, making them widely used in electric vehicles and stationary energy storage systems. Sodium-ion batteries, as an emerging technology, offer benefits such as low cost and high safety. They are poised to have considerable market potential, especially in large-scale energy storage and low-speed electric vehicles. Flow batteries, with their long lifespan and safety, have the potential for long-term and large-scale energy storage applications. Their costs are expected to decrease further, leading to an increase in market share. Lead-acid batteries, while low-cost and offering good performance in high and low temperatures, have low energy density and high maintenance requirements.
3. Thermal Energy Storage
Thermal energy storage is suitable for large-scale and long-term energy storage and boasts high efficiency. However, it is associated with complex technology and significant initial investment.
4. Hydrogen Energy Storage
Hydrogen energy storage is characterized by large capacity, long lifespan, and environmental friendliness. However, the technology is not yet fully mature, and the costs remain high.
III Components of the Energy Storage Industry Chain
From the perspective of the industry chain, the upstream of the energy storage industry includes various hardware equipment and software systems. The midstream consists of providers of energy storage system hardware and software, as well as energy storage solution providers. These solutions typically comprise energy storage system integration products and software products. The installation, construction, operation, and maintenance of energy storage solutions are also crucial links. Downstream application scenarios include power generation-side power stations, grid-side power grid companies, and industrial and commercial energy storage users.
1. PCS (Power Conversion System, Energy Storage Converter)
The PCS is the core component that enables bidirectional power flow between the energy storage system and the power grid. It controls the charging and discharging processes of batteries and performs AC-DC conversion. It accounts for 15%-20% of the cost of a battery energy storage system and is a key element of the system. The PCS comprises hardware and software for power, control, protection, and monitoring. Its main functions include power smoothing, information interaction, and protection. The PCS determines the quality and dynamic characteristics of the output power and significantly impacts the battery's lifespan.
2. BMS (Battery Management System, Battery Management System)
The BMS is a subsystem used to manage the battery energy storage system. It monitors parameters such as battery charging and discharging, SOC (State of Charge), SOH (State of Health), and implements protection measures. Unlike the BMS in electric vehicles, the energy storage BMS is relatively larger and more complex. A complete energy storage BMS consists of control units, battery main control units, and a master control unit. The BMS enhances the service life and reliability of the energy storage system, reduces maintenance costs and operational risks, and provides more flexible and reliable energy storage solutions.
3. EMS (Energy Management System, Energy Management System)
The EMS is an integrated energy management system for energy storage power stations. It realizes real-time monitoring, diagnostic warning, panoramic analysis, and advanced control functions. It ensures the safe, reliable, and stable operation of energy storage power stations by meeting the requirements of comprehensive operation monitoring, intelligent safety analysis, and dynamic panoramic analysis. If the energy storage system is likened to a human body, the EMS can be compared to the brain and mind, determining the system's functions, operational efficiency, and self-protection mechanisms.
IV Diversified Application Scenarios of Energy Storage
Electricity, being one of the main energy carriers today and an energy form that cannot be directly stored, is the primary focus of energy storage. From the perspective of the entire power system, energy storage applications can be divided into three major scenarios: generation-side energy storage, transmission and distribution-side energy storage, and user-side energy storage. The value of energy storage varies across these scenarios.
Application Scenarios??
- Generation-side: With the increasing proportion of new energy power generation, the mismatch between electricity generation and consumption has led to a growing demand for energy storage. Generation-side energy storage is primarily used to track planned output, smooth power generation output, and provide auxiliary services such as peak shaving, frequency modulation, and backup capacity. This helps address issues related to wind and solar power curtailment.
?- Grid-side (Transmission and Distribution): There are currently bottlenecks in the revenue pricing mechanism, and the business model needs further exploration. Grid-side energy storage is mainly used to delay the upgrading and expansion of transmission and transformation equipment and enhance the stability of grid operations.
?- User-side: The development of integrated power generation and storage systems has diversified electricity consumption patterns. User-side energy storage is primarily used for time-of-use electricity price management, capacity cost management, improving power supply quality and reliability, increasing the local consumption of distributed energy.
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