Rapid Growth and Diverse Applications Signal Strategic Opportunities in the Energy Storage Industry

Rapid Growth and Diverse Applications: The Energy Storage Industry Enters a Strategic Opportunity Period

On October 9, the 11th SNEC ES+ International Energy Storage and Battery Technology and Equipment Conference opened in Shanghai. This annual event serves as a vital platform for showcasing advancements in the energy storage sector, with attendees frequently highlighting two key themes: rapid growth and diverse applications.

Zhu Gongshan, Chairman of GCL-Poly Energy Holdings Limited, stated that over the next five years, the global compound annual growth rate for new energy storage installations is expected to reach an impressive 30% to 40%. He emphasized that energy storage systems are becoming a core infrastructure for computational power, leading GCL to explore integrated projects involving wind, solar, and storage.

Zhang Tianren, Chairman of Tianeng Holding Group, noted that the 14th Five-Year Plan will be a crucial window for the development of energy storage and hydrogen energy, transitioning market applications from pilot projects to essential needs, and upgrading the industry’s role from supportive to central.

During his presentation, Zhu Gongshan, as the leader of the SNEC Photovoltaic Hydrogen Industry Alliance, provided a comprehensive analysis of the photovoltaic industry at the recent SNEC Solar Exhibition in June. Now, at the SNEC Energy Storage Exhibition in October, he expanded on the development trends within the energy storage sector. He asserted that new energy storage has evolved from mere compliance with renewable energy requirements to becoming an economic asset in the new power system. He remarked, “In the future, energy sources cannot stand without storage, power grids cannot stabilize without storage, and loads cannot function flexibly without storage,” highlighting the wide-ranging applications of energy storage in the power system.

Zhu also pointed out that energy storage systems are becoming integral to computational infrastructure. He projected that by 2030, 95% of computational power will be focused on inference, which raises the demand for real-time balance capabilities in the power grid. Currently, GCL is researching the establishment of an integrated platform for wind, solar, and storage in the Middle East, with electricity costs around 0.15 yuan per kilowatt-hour.

To estimate the need for energy storage in relation to new energy installations, Zhu provided a formula: Storage Demand = New Energy Installation Capacity × Storage Ratio × Storage Duration. He predicts a typical and feasible benchmark scenario under current technological and economic conditions, where for every 1 gigawatt of new energy installation, a 30% storage ratio and a 4-hour storage duration would require 1.2 gigawatt-hours of storage capacity, resulting in a ratio of 1:1.2.

In his speech, Zhu emphasized that the primary challenges facing the energy storage industry today lie in material innovations. The development of new energy storage hinges on breakthroughs in source materials. He introduced several cutting-edge technologies in energy storage materials being explored by GCL, especially concerning next-generation battery materials. For instance, the GCL-PHY method for producing lithium iron phosphate cathode materials presents a dry process that reduces production costs and energy consumption by 50% compared to traditional wet methods. Moreover, GCL is the world’s largest producer of silane gas and is utilizing it to create silicon-carbon anodes, providing more compatible materials for future batteries. The company is also advancing next-generation carbon nanomaterials to meet the needs of solid-state batteries and black phosphorus batteries. GCL’s battery materials are already being supplied in bulk to customers such as CATL, Yiwei Lithium Energy, Haicheng Energy Storage, Ganfeng Lithium, and Penghui Energy.

Looking ahead, many attendees expressed optimism for energy storage demand over the next five years. Liu Yanhua, former Vice Minister of Science and Technology and Honorary Director of the National Climate Change Expert Committee, projected that by 2035, the total installed capacity of wind and solar power in China is expected to exceed 3.6 billion kilowatts, representing more than six times the capacity in 2020. As of the end of August this year, China’s total installed capacity for wind and solar power stood at 1.69 billion kilowatts, indicating significant future challenges.

Feng Shuchan, a former member of the Party Leadership Group of the National Energy Group, asserted that China’s energy transition is entering a profound phase, accelerating towards a green transformation. As of the end of August, the total installed capacity of wind and solar power nationwide had reached over three times that of the end of the 13th Five-Year Plan, contributing 80% of the new power installations since the start of the 14th Five-Year Plan. The proportion of wind and solar generation has steadily increased by 2.2 percentage points annually.

However, the new power system still faces two major safety challenges: ensuring power supply and system stability. On one hand, the generation of renewable energy is greatly affected by climate change and conditions, exhibiting randomness, volatility, and intermittency, which pose significant challenges for maintaining balance and reliable power supply. On the other hand, the power system is increasingly characterized by high proportions of renewable energy and power electronic devices, leading to a decline in disturbance resistance and regulation capacity, highlighting the urgent need to enhance the resilience and security of the power system. Therefore, safe and efficient energy storage plays a crucial supportive role on both the source and load sides.

Zhang Tianren emphasized that the 14th Five-Year Plan will be a pivotal period for the development of energy storage and hydrogen energy. Industry forecasts suggest that by 2030, the scale of energy storage installations could see nearly a tenfold increase, while the hydrogen energy industry is also poised for explosive growth. “This is a trillion-yuan opportunity, a shared chance bestowed upon us by the times,” Zhang remarked.

He believes that the driving logic behind the energy storage and hydrogen energy industries in China has fundamentally transformed. With the implementation of the Energy Law, the policy framework in the hydrogen storage sector is shifting from guidance to solidification, with market applications moving from pilot testing to essential needs, and the industry’s positioning evolving from supportive to central. “In the past, we often viewed various technologies in isolation, but the key for the future lies in synergy and building a multi-energy integrated ecosystem,” Zhang added, citing Tianeng Group’s industrial practices as evidence. The group insists on pursuing multiple technological paths, including lead, lithium, hydrogen, and sodium, to address complex demands across diverse scenarios.

In line with this perspective, GCL’s comprehensive strategy reflects the trend of seizing various opportunities in the energy storage industry through “multi-energy integration.” Zhu Gongshan predicts that the global annual compound growth rate for new energy storage installations will reach 30% to 40% over the next five years, with global installations expected to exceed 500 gigawatts by 2030, resulting in an estimated total investment of 600 billion USD.