With the development of the energy industry, energy storage technology has gradually become a hot spot in the industry. Flush data show that A- share energy storage-related concept stocks a total of 232 enterprises, the first quarter of 2024, 86.6 per cent of the enterprises to achieve profitability, of which the return of net profit increased by more than 100 per cent year-on-year accounting for more than 35 per cent. As of the end of the first quarter, the cumulative installed capacity of new energy storage projects completed and put into operation nationwide reached 35.3 million kW/77.68 million kWh, an increase of more than 12% from the end of 2023, showing the rapid development of the energy storage industry.

An industry insider interviewed by a reporter from China Economic Times said that the continuous iteration of energy storage technology is the core driving force for the development of the industry. Advanced energy storage technology can significantly improve system efficiency and reduce costs, thereby enhancing the market competitiveness of enterprises. Looking to the future, the energy storage industry has great prospects for cultivating new quality productivity, which can be further integrated with the energy storage industry, thus promoting the green transformation and development of the energy system.

Good signal is obvious

Flush data shows that the top ten energy storage companies in 2023 will have revenues above 50 billion yuan, followed by BYD, Ningde Times, Zijin Mining, Luoyang Molybdenum, Shanghai Electric, Tianhe Solar, Sunshine Power, Huayou Cobalt, Chint Electric, Junsheng Electronics. The total revenue of these 10 head enterprises is 1962.63 billion yuan.

At the same time, since 2023, a number of energy storage enterprise financing events amount to more than 100 million yuan. By the end of 2023, the total amount of statistical financing reached 53.4 billion billion yuan (excluding upstream material-side financing events), covering areas such as sodium ion batteries, PCS, portable/household storage systems, energy storage security, battery recycling, etc.

The performance announcement of listed companies in the energy storage sector in the first quarter of 2024 was released, and Ningde Times (net profit of 10.51 billion yuan) continued to maintain its leading position in the industry. The second to fifth companies are BYD (net profit of 4.569 billion yuan), sunshine power supply (net profit of 2.096 billion yuan), Luoyang molybdenum industry (net profit of 2.072 billion yuan) and zhengtai electric appliance (net profit of 1.081 billion yuan); the sixth to tenth companies are Yiwei Lithium Energy (net profit 1.066 billion yuan), Huichuan Technology (net profit 0.8111 billion yuan), Zhongtian Technology (net profit 0.6361 billion yuan), Zangge Mining (net profit 0.5293 billion yuan), Huayou Cobalt (net profit 0.5224 billion yuan).

Liu Jintao, an associate researcher at the Chongyang Institute of Finance at Renmin University of China, said in an interview with a reporter from China Economic Times that the recent development of the energy storage sector reflects the following trends. First, technological innovation drives the rapid development of the energy storage industry. Advanced energy storage technology can significantly improve system efficiency and reduce costs, thereby enhancing the market competitiveness of enterprises. Second, the market demand is growing. With the rapid development of renewable energy and the increasing demand for energy storage in the power grid, the demand for energy storage market has increased significantly. In particular, the development of intermittent energy sources such as photovoltaic and wind energy has further promoted the application of energy storage technology. Third, policy support has continued to increase.

Liu Chunsheng, an associate professor at the Central University of Finance and Economics, said in an interview with a reporter from China Economic Times that the financial report data of listed companies in the energy storage sector in the first quarter was eye-catching, and most companies achieved profitability, and many of them had their net profit attributable to their parents increased by more than 100 year-on-year. This shows the huge market potential and investment value of the energy storage industry.

Many challenges remain

The latest data released by the National Energy Administration shows that the current domestic new energy storage continues to develop rapidly, and the installed capacity has exceeded 35 million kilowatts. According to data, China's new installed capacity will exceed 35GW in 2024, which will exceed the cumulative installed capacity for the third consecutive year.

In the near future, Yiwei Lithium Energy executives told institutional investors that the company's energy storage battery orders are currently saturated and are expected to maintain a growth rate of 30%-50% for the whole year of 2024, with a planned target of more than 50GWh for energy storage shipments.

On the whole, the "cake" of energy storage is getting bigger and bigger, but from the reports of listed companies in the energy storage industry chain in 2023 and the first quarter of 2024, with the intensification of competition in the energy storage market, the profit gap between companies has widened. Some companies earn more than 100 million yuan a day, and some companies have suffered losses year after year or even been eliminated.

Yang Delong, chief economist of Qianhai Open Source Fund, pointed out in an interview with a reporter from China Economic Times that the current challenges facing the development of the energy storage industry mainly lie in the large number of new entrants and the industry is facing intensified competition.

Liu Chunsheng believes that the maturity of the current energy storage technology needs to be improved, especially in terms of large-scale application and economy, and further technological innovation and breakthroughs are needed. In addition, the market competition in the energy storage industry is increasing, which requires enterprises to pay attention not only to technology research and development and product innovation, but also to cost control and market expansion.

Liu Jintao said, first, the degree of standardization needs to be strengthened. Energy storage technology involves batteries, power electronics, system integration and other fields. The technical requirements of each link lack unified technical standards. The safety of energy storage systems, especially battery systems, is also very important, but the safety standards are not consistent. Second, the cost of some application areas is still high, in the technology is still in the process of innovation and iteration, the initial investment and operation and maintenance costs required by different enterprises are quite different. Third, the further improvement of battery performance is more difficult. Although battery technology continues to advance, there are still bottlenecks in terms of energy density, charge and discharge speed, and life. The existing lithium-ion battery technology is getting closer and closer to the limit in energy density, and breakthrough new materials and new technologies are needed to further improve battery performance in the future.

Broad market prospects

The rapid development of the new energy market has enabled most energy storage companies to achieve revenue and net profit growth in the first quarter of 2024.

Founder Securities Research Report believes that the new products launched by various companies have significantly improved the core indicators of energy storage systems. The energy storage industry has continuously shortened the investment return period on the cost side, and the economy of energy storage systems has significantly improved.

"Global technical cooperation and market development make the energy storage industry have a broader market prospect." Liu Jintao said that the energy storage industry will become an indispensable part of clean energy and an important competitive field for developed countries and emerging market countries. International cooperation contributes to technology exchange, market promotion and standard unification, and promotes the global development of the energy storage industry. The environmental benefits of energy storage technology will continue to improve. Energy storage systems can significantly improve the utilization of renewable energy, reduce wind and light abandonment, and promote the further development of renewable energy, thereby promoting the green transformation of the energy system and helping to achieve global Climate goals.

"The energy storage industry has great prospects for cultivating new quality productivity. The integration of information technology, digitalization, intelligence, green technology and other elements required by new quality productivity and the energy storage industry can produce significant synergies and promote the Internet of Things, The application and innovation of big data and green technology in the energy storage industry." Liu Jintao said.

"The future development opportunities of the energy storage industry are broad." Liu Chunsheng said that with the rapid development of renewable energy and the popularity of electric vehicles, the demand for energy storage will continue to grow. The continuous emergence of new energy storage technologies such as solid-state batteries will bring disruptive changes to the industry. With the improvement of the industrial chain layout and the expansion of production capacity, as well as the deepening of international cooperation and policy support, the market environment of the energy storage industry will be more superior.