According to data from the State Grid Energy Research Institute, China’s installed power generation is anticipated to witness a significant shift in 2023. The proportion of coal in the energy mix is projected to decline to 49%, while wind and solar power are expected to witness rapid increase, rising to approximately 33.6%. With the increase in the proportion of new energy generation, the entire power system needs to be reconstructed, enabling the power generation side, the grid side and the user side to have positive trend in the demand for energy storage. In the global energy storage market, the year 2022 will see the addition of 30.7GW of new power storage projects, including 20.4GW of new energy storage. This represents a twofold increase compared to the same period in 2021.

The economics of lithium have gained attention as its price continues to decline, leading to a flourishing industry. The rapid decrease in lithium prices has resulted in domestic energy storage system prices dropping to around RMB 1.06/Wh in May. As the return on investment for projects improves, the bidding process is expected to gain momentum. According to data from the energy storage and power market, the bidding capacity for domestic energy storage in 2022 is projected to reach 44GWh.

From January to May of this year, the capacity of domestic energy storage bidding projects, as reported by the CNESA Datalink global energy storage database, has already reached 16.5GW/46.5GWh, surpassing last year’s capacity. With the growing demand for energy storage driven by the development of new energy sources, the industry is expected to thrive in the long term. The positive momentum is forecasted to continue, with CNESA predicting a steady rise in annual new energy storage installations over the next five years. A conservative estimate suggests an average annual installation of 16.8GW, while an ideal scenario could see the average annual installation capacity of new energy storage reach 25.1GW.