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The China Energy Bureau issued the "Notice on the Establishment of a Mechanism for Coal Power Capacity Electricity Price" on November 10th. According to this notice, in most regions from 2024 to 2025, approximately 30% (100 Yuan/KW·Year) of fixed costs will be recovered through capacity electricity price. However, in Henan, Hunan, Chongqing, Sichuan, Qinghai, Yunnan, and Guangxi provinces, this proportion will be around 50% (165 Yuan/kW·Year).
The price of lithium carbonate has decreased, resulting in a new record low for the price of energy storage batteries
The EPC offer for energy storage decreased by 0.13 Yuan/Wh compared to last week, reaching 1.09 Yuan /Wh. According to the survey conducted by Dadong Times, the lowest transaction price of a 0.25C energy storage cell has dropped below 0.6 Yuan/Wh. Several other energy storage battery companies have also stated that their batteries will be sold at a maximum price of 0.5 Yuan/Wh by the end of this year, representing a reduction of approximately 40%. The primary reason behind the increasingly "internal volume" of energy storage prices is the continuous decline in the price of lithium carbonate, which serves as a raw material for battery cells. On November 7th, the average price of lithium carbonate hit another two-year low at 158,500 Yuan/ton. The four major materials used in lithium batteries (cathode, anode, electrolyte, separator) have witnessed a new round of capacity expansion leading to an increase in market supply and intensified product competition resulting in varying degrees of price decline.
The price of energy storage cells fell by 0.005-0.03 Yuan/Wh this week, and it will enter the ￥40 cents/Wh at the end of 2023. At the same time, the peak-to-valley electricity price difference will continue to fall.
With the advent of the coal power capacity era, electricity prices, there will be a continued increase in national energy storage bidding projects in the fourth quarter, with East and South China being the primary distribution regions
The "Notice on the establishment of coal power capacity electricity price Mechanism" heralded the advent of coal power capacity electricity pricing, with expectations that new energy storage capacity electricity pricing will be determined by the first half of 2024. This week, five provinces including Inner Mongolia, Guizhou, Jiangsu, Sichuan and*** methods of new energy storage projects. Since 2023, there has been a gradual improvement in terms of specificity and operationalization in the content of relevant energy storage policies. The favorable trend in policy is evident and national energy storage bidding projects are expected to continue increasing in the fourth quarter of 2023. However, some policies exhibit repetition and lack interconnectivity, causing confusion for investors due to administrative adjustments made by certain regions. Furthermore, promoting energy storage demonstration projects remains challenging. East China contributed significantly to this week's tender increase with a total volume of 6,040MWh accounting for 67.3% share. Eastern China also surpassed southern, central and southwestern China in terms of bidding scale this week ranking third among all regions nationwide. Dadong Times Think Tank (TD) anticipates that starting from the fourth quarter of 2023 domestic new energy storage will gradually extend from its current range within "14th Five-Year Plan" which spans between 2-4 hours to a range between 6-8 hours instead. Industrial and commercial use scenarios requiring long duration and high security will also become a prevailing trend while flow batteries capable of meeting medium-to-long-term energy storage needs will contribute significantly towards increased procurement volumes for such applications; East and South China are poised to gain distribution advantages for related projects through their leading technologies.
The focus should be on promoting green and low-carbon initiatives, expediting the industrialization of energy storage technology, and consistently establishing a "new energy + energy storage" framework
This week, the national government released a policy titled "National Carbon Peak Pilot Construction Plan," which aims to implement carbon peak pilot projects nationwide. The focus is on addressing the challenges hindering green and low-carbon development and exploring different approaches for achieving carbon neutrality in cities and industrial parks with diverse resource endowments and development foundations. At the local level, provinces such as Zhejiang, Jiangsu, Guizhou, Sichuan, Inner Mongolia, Xinjiang issued energy storage policies that specify exempting user-side new energy storage systems below 5MW from scale control measures while requiring power side, grid side, and user-side projects with rated power of 5MW or above to be included in annual construction plans. Furthermore, efforts will be made to accelerate the advancement of cutting-edge technologies like key energy storage solutions by enhancing integration capabilities, intelligence quotient (IQ), controllability of energy storage systems along with safety performance enhancements. Additionally, novel business models related to new energy storage will be expanded upon while establishing a mechanism that combines "new energy + energy storage.
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