Despite the recent continuous adjustment of the A-share energy storage sector index, the industry's optimistic outlook for the ultra-expected development of the energy storage industry remains undeterred.

Energy storage industry companies and experts, in interviews with the Shanghai Securities News, all stated that as the "15th Five-Year Plan" continues to increase the installed capacity of new energy and accelerate the construction of new power systems in China, the demand for energy storage is shifting from the power source side to the power grid side, and the trend of large-scale projects is becoming apparent. With the explosive growth of AIDC (Artificial Intelligence Data Center) and the advancement of independent renewable energy power systems for green hydrogen and ammonia projects, the application scenarios and demand for energy storage at home and abroad will further expand.

Corporate orders are strong

Increase in grid-side energy storage orders

Before this, the energy storage sector has triggered a rapid rise in the A-share market. Hao Ye, chairman of Luo Xi Energy, told the reporter of the Shanghai Securities News that the continuous increase in raw materials such as lithium carbonate has led to a shortage of upstream supplies, while the downstream demand continues to be strong, making the energy storage industry chain highly concerned. And Shandong GenRMB New Material Co., Ltd., the leader in the production of lithium battery electrolyte additives, suddenly had equipment failure and shut down for maintenance, becoming a short-term variable in the industry's supply, and its impact was further amplified by the market.

Recently, the energy storage system integration enterprise Haibosichuang announced the signing of a strategic cooperation agreement with Ningde Times. According to the plan, Haibosichuang will purchase no less than 20 gigawatt-hours of cells cumulatively from 2026 to 2028, further verifying the prosperity of the energy storage market.

Ningde Times directly announced the expansion plan to the outside world. The company has significantly expanded its production capacity at its bases in Jining, Shandong; Ruiqing, Guangdong; Yichun, Jiangxi; Xiamen, Fujian; Qinghai; and Ningde, Fujian. For example, the Jining base in Shandong is expected to add more than 10 gigawatt-hours of storage capacity by 2026.

Hao Ye said that after the industry slumped in the second and third quarters of this year, it has now rebounded significantly, with companies seeing a substantial increase in orders, mostly for large projects of hundreds of megawatt-hours or even over 1 gigawatt-hour. Individual orders can be worth hundreds of millions of RMB.

With the introduction of the Notice on Deepening the Market-oriented Reform of the Feed-in Tariff for New Energy and Promoting the High-quality Development of New Energy (referred to as the "No. 136 Document" in the industry), the mandatory storage requirement was lifted, and coupled with other policies that proposed to further enhance the grid's adaptability to new energy, the market demand for energy storage rapidly shifted from the source side to the grid side. Due to the wide coverage of grid-side energy storage, its scale is usually large.

During the investor research, Haibosechuang mentioned that after the release of Document No. 136, energy storage has become an independent market investor, decoupled from new energy construction, and gradually has its own profit-making methods, which is also one of the reasons for the company's orders to increase significantly this year.

Sunshine Power, in answering investors' questions, stated that the company's target for shipments (not order volume) at the beginning of the year was between 40 and 50 GWh, and it currently maintains confidence in achieving the target. The layout of the energy storage system business has allowed Sunshine Power to successfully transform from a leader in photovoltaic inverters to an integrated energy solution enterprise in photovoltaic and storage.

Overseas markets, new applications bring new demands

Energy storage will exceed expectations

Almost all the energy storage companies surveyed mentioned that the rapid expansion of overseas markets, especially the surge in demand in North America, Europe and Southeast Asia, has left companies with a full order book.

Yonghui Technology Group recently reached a strategic cooperation agreement with Statera Energy, a British energy company, to provide a system-level solution for the Carrington energy storage project in the UK. The total installed capacity of the project reaches 680 megawatts/1360 megawatt-hours, making it one of the largest single energy storage projects in the UK.

Zhang RMB, general manager of the Zero Carbon Strategy of FarSight Technology Group, told the reporter of the Shanghai Stock Exchange that the short-term demand for electrochemical energy storage is highly adaptable, with millisecond-level response, peak and frequency regulation, industrial maturity, low cost, and the company's current energy storage shipments are steadily among the industry's leading positions and are developing rapidly, with the goal of sprinting to become a global leader.

New business models will drive the energy storage industry to welcome more development opportunities. Hao Ye said that data centers and high-energy-consuming chemical plants are showing a "following the energy" development trend, tending to connect directly with green power from new energy bases, using renewable energy power to operate at a lower cost. Its working mode has a stable load and is compatible with the off-grid mode, providing new support for the expansion of energy storage demand. Haibosha mentioned that the storage demand in scenarios such as the combination of high-power charging and energy storage, and the replacement of diesel generators in data centers is expected to increase rapidly.

Yan Yishu, an analyst at UBS Securities covering China's utilities and new energy sectors, told the reporter of the Shanghai Stock Exchange that the demand for artificial intelligence data centers in the United States is very strong, but there is a power shortage. Renewable energy will be the only significantly growing power generation sector in the United States over the next five years. Based on the characteristics of renewable energy power generation, a large amount of energy storage is required. She predicted that global energy storage demand could increase by 40% year-on-year by 2026, and the energy storage demand in multiple emerging markets will therefore grow on a large scale.

China Securities Building recently released a research report saying that the global trend of energy storage is still positive. The domestic energy storage has fully welcomed the turning point of economic benefits, and the investment is extremely strong, mainly due to the marketization of new energy and the capacity price to promote the sustainable development of the industry. China Securities Building believes that the cumulative penetration rate of energy storage is still less than 10%, and the new installed capacity in China next year is expected to be increased to 30 billion kilowatt-hours. The biggest opportunity overseas comes from the energy storage demand brought by data centers.

"Energy storage does not have a theoretical surplus or congestion. The so-called congestion at present is mainly that users can't afford it or can't use it," said Lin Boqiang, director of the China Energy Policy Research Institute at Xiamen University, in an interview with the reporter of the Shanghai Securities News. For energy storage to achieve large-scale development, the government needs to take the initiative. The key lies in expanding the scale and strengthening market competition. The most direct and effective way to reduce the cost of energy storage is to play the scale effect, and to expand the scale, the government needs to promote the layout of public energy storage infrastructure. If the government can promote the construction of energy storage infrastructure in the future, the energy storage industry has a good development prospect. In addition, the energy storage industry needs more large energy storage enterprises to form a sufficient market competition. Only by reducing costs through two paths of expanding scale and strengthening market competition can the problem of energy storage promotion be solved, and then the new energy development chain can be connected.

Another power industry expert said that recently, relevant national departments have successively released a series of goals and policies involving new energy, new power systems, and the development of power equipment industry, which has clarified higher goals for new energy installation, and the growth of energy storage as a key supporting consumption is continuous and more certain. The energy industry is expected to undertake the large volume of investment demand after the real estate, which will support the economy. The improvement of the rate of electrification, energy security, and green and low-carbon goals will jointly promote the expansion of the demand for energy storage. In addition, China's energy storage industry can supply the world with a large volume, and green and low-cost electricity will become the core competitiveness.

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