At present, if the valuation has not risen by 5 to 10 times with the overall trend, it is probably embarrassing to say that one is starting an energy storage business. In April alone, there were only 20 cases of investment and financing related to energy storage, with valuations as high as double and then double.

Moving to a broader scope, BYD and CATL are competing to secure a strategic financing of 3.05 billion yuan for Shanshan Lithium, with a valuation of around 12 billion yuan. In addition, on the long list, there are companies such as Honeycomb Energy, Weilan New Energy, and Juwan Technology Research that can be called unicorns just by picking out one, not to mention Zhongke Haina, Ruipu Energy, Changya Technology, and others that are all being competed for by frontline institutions.

All of this is precisely because many investors have reached a consensus: the energy storage industry is a huge market worth trillions of yuan, and any segmented energy storage track can have a market size of billions of yuan.

Previously, Tesla's founder Musk directly asserted that energy storage could develop to be on par with and even surpass the automotive business.

Moreover, it is worth pointing out that domestic enterprises are no longer satisfied with the domestic market, but choose to pursue an international competitive path, just like "Ningwang" supplying Tesla, directly capturing the global market and expanding their business territory, with revenue growth far exceeding the average growth rate of the domestic energy storage industry.

So specifically, where are the opportunities for the energy storage industry? The attending experts emphasized that this requires closely following the planning and government layout, continuously supporting the upstream of the industrial chain, doing a good job in the interaction between the upstream and downstream of the industrial chain, and considering the layout of giants in advance, and avoiding their sharp edges when appropriate.

Against this backdrop, on April 22nd, World Earth Day, China held a closed door salon on the topic of "Is the trend of energy storage rising and the new energy industry approaching?". In this closed door energy storage salon supported by Haisong Capital, more than a dozen attendees provided many industry directions worth considering and investing in for the development status of the energy storage industry.



What is the current situation of energy storage?



As early as 2008, Cai Wei, a partner of Lightspeed China, had been focusing on green technology since entering the industry. Now, more than a decade has passed, in Cai Wei's view, the domestic green technology energy industry has made significant progress.

The continuous evolution of technology in many fields has brought about cost reduction through economies of scale, which is already economically viable and no longer requires government subsidies. China has also become the country with the strongest green technology supply chain in the world, with wind energy, solar energy, batteries and other related industries accounting for nearly 50% of the overseas market share.

Regarding energy storage, Cai Wei stated that it is different from power batteries. Firstly, there are a variety of energy storage technologies, each with its own advantages and disadvantages. Suitable application scenarios can be found for both long-term and short-term energy storage; Secondly, due to technological diversity, the entire industry is unlikely to evolve into an oligopoly like that of power batteries, so multiple related companies with technological innovation will emerge in specific fields.

At the meeting, Wang Zhi (pseudonym), the investment manager of a listed company, also stated that the energy storage industry is a huge market worth trillions of yuan. Any segmented energy storage track could have a market size of billions of yuan. Therefore, his focus is on energy storage on the power side.

Among them, Gao Hong, the General Manager of Cloud Storage Technology, noticed that electrochemical energy storage is the relatively most mature energy storage technology direction in both technology and industry chain. According to calculations, the total amount of domestic electrochemical energy storage market will reach 325GWh by 2025 alone. With the increasing capacity of energy storage power stations, the large-scale use of battery cells has brought about system level safety and economic challenges. The fundamental issue is how to manage battery consistency.

Specifically, now, cloud storage technology continuously improves material technology and expands production capacity in order to achieve infinite theoretical performance consistency in the production process; On the other hand, the battery system is subjected to extensive management of fixed series and parallel connections that cannot be disconnected and cannot be accurately measured; This is logically positive and negative.

Therefore, Gao Hong directly said, "The safety and economy of energy storage cannot be neglected. The crime is not in the battery, but in system management.". How to accept and manage battery inconsistencies, safely avoid weaknesses, and mitigate the effects of weaknesses? This is the direction that electrochemical energy storage system technology needs to be studied.

To this end, Cloud Storage Technology has also developed a complete digital energy storage control system based on "dynamic reconfigurable battery network" technology. It provides a flexible battery series parallel architecture with "accurate measurement and disconnection" for the energy storage system, which can perform online "current x time" energy connection discretization slicing of the battery.

When the battery weakens or has problems, algorithms can be used to predict and isolate it, ensuring both the continuous availability and safety of the system. This management strategy regards each module/monomer as the smallest independent access control (attention should be paid to control rather than detection), so that each battery module or monomer can "advance and retreat at the right time and do their best", which coincides with the Internet thinking. This innovative battery control strategy will help achieve intrinsic safety of large-scale electrochemical energy storage power stations and make a huge contribution to the continuous reduction of CAPEX and OPEX.

Hu Shi, founder and CEO of Feynman Power Technology, also mentioned his own technology for electrolyzing water and carbon dioxide. The electrocatalytic technology based on renewable electricity has broad development prospects and has gradually formed an industry in European and American countries; The catalysts and membrane electrode products provided by Feynman Power happen to be the core components of this industry.

In the future, achieving carbon neutrality throughout the entire product lifecycle will also be an inevitable choice for all international enterprises; Hu Shi pointed out, "Shopify in the United States has proposed to achieve carbon neutrality in all logistics links during this year's Thanksgiving. Feynman Power's current goal is to become one of the world's leading suppliers of catalysts and membrane electrodes, helping customers in upstream and downstream industries achieve this carbon neutrality goal. In fact, the performance of our products has already surpassed competitors from Europe and America at the beginning of this year, and the demand for us from top global customers will continue to increase."

Sheng Hua, General Manager of the Industry Investment Department of the China Russia Energy Fund of State Power Investment Corporation, shared the current situation on the power generation side. Currently, lead-acid lead carbon is still a major player in the field of electrochemical energy storage. Only when the economic viability of large-scale battery plants is reduced in the later stage will it shift towards lithium iron phosphate. The current controversy over whether to use cascading utilization or battery recycling is relatively high. And now there is no particularly good solution to large-scale power generation.



"From the perspective of energy structure, thermal power is still the main force. From a policy perspective, wind and solar energy storage is integrated, and currently, energy storage is indeed a relatively large market. In the next step, it will also show a very large positive trend. As for which technological route can reach the end and whether it can be achieved, it is still uncertain," said Sheng Hua.



Of course, there are challenges when encountering opportunities. Wang Zhi also mentioned that there are three challenges for the energy storage industry at present. Firstly, no matter how well the energy storage projects are built, it is useless for the power grid to dispatch without coordination; Secondly, energy conversion efficiency is crucial; The third is the economic viability of the project. Without economic viability, no energy storage can play a significant role in a project.



Specifically for the primary market, the current problem is that valuations are generally high. Leading companies in each sub sector of energy storage have high valuations, and the hydrogen energy sector is no exception.



And the biggest challenge here, Wang also pointed out, "What is energy storage for? Energy storage is mainly used for peak shaving in the power grid. Peak shaving in the power grid requires speed and size, and being too small doesn't work. Whether the power grid can regulate you is the key to your survival."



So, what role does a specific enterprise play within it? Each family has their own thoughts. Wang Chen, General Manager of Qingyan Electronics, stated that Qingyan Electronics mainly focuses on the upstream core materials of electrochemical energy storage devices, dry electrodes. Regarding the energy storage industry, it focuses more on the frequency modulation energy storage field. Specifically, it is an energy storage technology aimed at short-term and high-frequency applications.



In his view, under the background of dual carbon drive, the proportion of new energy sources such as photovoltaics and wind energy will gradually increase. But as the proportion of new energy increases, the instability and randomness of new energy will bring huge challenges and pressure to the power system. From the power generation end, transmission and distribution, to the user side, there are varying durations of frequency regulation energy storage needs. There is a technical requirement for energy storage duration in milliseconds, seconds, minutes, and hours.



Therefore, in the field of frequency modulation energy storage, Wang Chen personally agrees with the hybrid energy storage strategy, which means that power based energy storage technology is integrated with energy based energy storage technology, and the response is scheduled separately. For example, a hybrid energy storage strategy for supercapacitors and lithium iron phosphate batteries. By fully utilizing the power characteristics of supercapacitors, the high-frequency response at the millisecond level, and the guarantee of long lifespan, the frequency modulation range is ensured to be sufficiently long, while also avoiding the lifespan degradation caused by the response of lithium iron phosphate batteries due to their rate characteristics.



In addition, at the salon, guests also emphasized that energy security, food security, and national defense security are the three major security support systems of the country, and solving energy security issues is itself a very important issue.



Regarding this, Ma Dongjun, Managing Partner of Haisong Capital, also stated that energy storage is a part of renewable energy. If we focus on new energy from an investment perspective, we should focus on achieving the national "dual carbon" goals, do more incremental things, and speak out more.



After all, new energy and energy storage are closely related to market structure, trading participants, and market optimization and reform. Otherwise, there would be many pain points in a single point, but they are powerless and ultimately lead to many redundant constructions. Investment aims to promote the optimization of resources and play a regulatory role in capital.



Where are the opportunities for energy storage?



So specifically, where are the opportunities for the energy storage industry? Industry expert Wang Bo (pseudonym) from a certain energy state-owned enterprise explained that this requires closely following the planning and government layout, continuously supporting the upstream and downstream of the industrial chain, doing a good job in the interaction between the upstream and downstream of the industrial chain, and considering the layout of giants in advance, and avoiding their sharp edges when appropriate.



Of course, Wang Bo also stated that there is a huge market for physical and mechanical energy storage at present. In his view, setting aside pumping and storage, the future amount of new energy storage and electrochemistry is relatively small compared to mechanical methods. In addition, attention should be paid to non electric energy storage methods, including heat and cold storage; Seize common key requirements.



Kang Zhiwei, the general manager of ZH Energy Storage, points out from his own perspective that the biggest market opportunity in the future is still on the power generation or grid side, including three elements: long-term, low-cost, and safety. The cost requirements for energy storage are very high, but the current technology includes lithium-ion batteries, and the cost is still very high. Liquid flow batteries have significant advantages in safety and low cost, and there will be huge market space for long-term energy storage applications on the power generation and grid sides in the future.



Chen Yeran, founder and CEO of Zero Exploration Intelligence, stated that 70% of China's electricity consumption is concentrated in industry and commerce. The energy storage application on the power generation side in the photovoltaic and wind power fields ultimately serves the power consumption side. Directly using energy storage on the power consumption side can greatly reduce transmission and distribution costs. Therefore, the energy storage potential on the industrial and commercial side is currently greatly underestimated. Due to its more open market, it is also easier to create companies driven by technology and product strength.



Zero Detection Intelligence is positioned in industrial and commercial scenarios, using highly secure and high-performance distributed energy storage devices and intelligent operation and maintenance software to achieve functions such as peak shifting and valley filling, dynamic capacity increase, demand adjustment, and backup batteries, thereby reducing the electricity costs of parks and enterprises and improving the green electricity usage ratio. In the future, Zero Exploration will also provide power auxiliary services through virtual power plants, such as participating in peak shaving and frequency regulation electricity transactions.



At the same time, industry and commerce are also global markets, and Zero Exploration will establish overseas sales channels to serve global customers in the future.



Wang Haifeng, founder and CEO of Fengyuan New Technology, also mentioned two significant opportunities he observed: firstly, in areas with more hydrogen and more expensive electricity, hydrogen energy can be used to generate electricity and utilize the surplus hydrogen gas; Secondly, it can be used for peak shaving, especially for long-term storage peak shaving. "If you use peak shaving, you can use the money from peak shaving to bring negative electricity prices."



Gao Hong indicates that the future trend will definitely be towards shared energy storage, which solves the problem of where to allocate energy. The future shared energy storage will be like infrastructure like highways, which need to be built in every province. If not built, it will not work. Therefore, the government will share energy storage together like building highways.



Of course, Kang Zhiwei also mentioned that often the scale of energy storage on the power generation side cannot be too small, so it is necessary to consider what kind of technological route to implement. The essence of energy storage is trading, which inevitably involves costs and cannot be infinite. Therefore, safer low-cost technologies are crucial. So the core essence is still to use updated materials, higher, better, lower cost, and more sustainable materials to solve this problem on the road of technological innovation.



Wang Haifeng, after supplementing data on hydrogen energy, pointed out that China is still very cautious about projects at the hundred megawatt level. However, based on his own calculations, fuel cells are a good path to reduce costs from a fixed investment perspective. Therefore, he is optimistic about the application of fuel cells in energy storage.



Co founder and COO of Zero Detection Intelligence, Gong Yue, also proposed from another perspective that the "electricity side" will be a major development trend for energy storage in the future. She believes that most energy storage companies now focus on the grid side, which is definitely a huge market, but startups need to consider their own entry points.



Specifically, industry and commerce are natural distributed energy storage markets, such as factory parks, new energy vehicle charging stations, data centers, commercial buildings, and so on scattered throughout the country. The combination of these scenarios with energy storage is definitely a major trend, and the requirements for performance, economic effects, and safety sensitivity are also higher, which will be a new and vast market. By mastering these distributed loads, we can definitely cooperate with the power grid for scheduling in the future, and assist in the transformation of the power system towards new energy.



Gao Hong reminded Gong Yuedao that industrial users are very useful, but it is important to consider the significant differences in the domestic and foreign power grid environments, and to evaluate the economic viability of energy storage on this basis. Of course, she also acknowledged that there is a great market for electricity in the industrial sector.



As an investor in Zero Exploration Intelligence, Jiao Teng, a partner of Mingshi Capital, mentioned that the most common application scenarios and loads of new energy are indeed new energy vehicles. From sales data, it can be seen that over 23 million cars were sold in China last year, with new energy accounting for 3 million units. Over 80 million cars were sold globally in a year, with new energy accounting for approximately 5 million units.



In this way, a large carrier of energy storage in the future is the batteries on new energy vehicles, and most of the batteries on new energy vehicles account for about half of the power cost, so they will definitely not be idle. With its usage and further increase in future sales of new energy vehicles, the batteries on new energy vehicles will surpass all energy storage forms worldwide.



Jiao Teng believes that the core of new energy needs to address three elements: the new energy generation method represented by wind and solar power solves the manufacturing of new energy, the electrification tool represented by electric vehicles solves the application of new energy, and the electrochemical battery serves as a bridge connecting the "source network load storage" to solve the problem of new energy storage.



For Mingshi, the investment strategy for new energy is based on the perspective of electric vehicles. For example, Ideals, Xiaoniu, and others have started with angel led investments and have invested in the entire intelligent electric vehicle industry chain through multiple rounds. Starting from cars, they have also built a new generation of photovoltaics, distributed energy storage, and V2G for automotive batteries. The entire process is closed-loop, and each intermediate link has completed a large amount of data precipitation. The ultimate goal of energy storage is to use batteries and data to jointly create VPPs (virtual power plants), achieving green, efficient, and safe energy circulation.





How should energy storage be laid out?





Wang Zhi's words hit the target right away. Investing in energy storage is a gamble on the country's fortunes. The country really needs energy storage, and the biggest problem facing the country now is the increase in the installed capacity of new energy, which leads to a decrease in the proportion of rotational inertia of the entire power grid.



He also pointed out that there is now a consensus in the industry that energy storage is best combined with traditional thermal power, after all, peak shaving of thermal power is the opportunity to make big money, and small ones of a few megawatts cannot make much money. "For example, 'Sago Wilderness' has an installed capacity of 450 million kilowatts, while our country's total installed capacity is only 2.4 billion kilowatts."



Wang Bo believes that the most crucial aspect is long-term energy storage, which must be long-term and preferably cross cycle. One is to solve the integration of renewable energy into the grid, and the other is to address energy security issues.



Jia Jing, a partner of Delian Capital, also expressed that Delian has invested in two aspects in the past, based on its own institutional layout. On the one hand, it is closer to the market, making it easier to form a closed-loop user side, such as portable mobile energy storage; On the one hand, it is the hydrogen energy field with a slightly longer horizon. Considering the indispensable energy attributes of heavy hydrogen, such as long-term energy storage, no rigid limitations on storage capacity, and flexible space transfer, it has laid out hydrogen refueling station equipment, hydrogen refueling bottles, and electrolytic water hydrogen production in the middle and upper reaches.



At present, Delian is also paying attention to the common needs and opportunities for water delivery in this industry, such as the new demands for upstream materials brought about by the increase in energy density, and the demand for design simulation tools brought about by the diversity of electrochemical technologies.



Cai Wei further summarized the investment opportunities he valued as one horizontal and one vertical. Horizontally, it refers to energy storage technologies for different scenarios, including flow batteries, hydrogen energy, etc; Vertically, we will look at the key components in the upstream and downstream fields, such as what better upstream materials are available, including opportunities for AI for Science appearing on the material side.



Shenghua also directly stated that its overall institutional investment revolves around the upstream industry chain of the Electric Power Investment Group. Among them, pumped storage accounts for an absolute proportion, and electrochemical energy storage ranks second. In addition, State Power Investment Corporation of China is laying out long-term energy storage this year and next year, and will therefore focus on finding relevant technologies upstream and downstream that can meet the demand for energy storage for more than 8 hours. The Electric Power Investment Group to a certain extent represents the power generation enterprise, and the demand for energy storage on the power generation side is extremely large, which is very imaginative.



Ma Dongjun, on the other hand, stated that new energy is a key investment track for Haisong Capital, with a focus on two aspects. On the one hand, the focus is on sinking, such as whether there are breakthrough technologies at the bottom, and at this level, an angel wheel will be seen; On the other hand, entrepreneurial enterprises that are truly technological innovation oriented in the industry, whether it is the theme of industry integration or cooperation with industry leaders, are very interested.



Zhao Wenjian, Executive Director of Haisong Capital, further added that from a downward perspective, we will look at the field of electrochemical energy storage batteries. Not only will we invest in battery companies, but we will also invest in upstream positive electrode materials, negative electrode materials, and separators. We will see the entire system more thoroughly and choose some high-quality companies, including those representing the next generation of revolutionary technology companies; In addition, there are already mass-produced battery companies such as Honeycomb Energy.



After all, there is a new track, which is thermal management. The most important thing about all energy storage is its safety. From a safety perspective, electrochemical energy storage thermal management has become a highly valued track by Haisong Capital.



"Whether it's air-cooled or liquid cooled, including battery inserts, and future insulation, we will also spend time researching systems related to new materials to solve heat spread and even thermal runaway problems." Zhao Wenjian said.



Jiao Teng also mentioned that the entire new energy track, established by Mingshi Capital 8 years ago as the main investment track, has now invested in nearly 40 companies around the entire new energy vehicle industry. 20 companies have invested in new scenarios, new tracks, and new products of new energy.



In this way, when it comes to energy storage direction, it is more consistent with Haisong Capital's investment philosophy, which focuses on new opportunities driven by new materials, new products, and new technologies. The products on the user side, including new cross-border products and opportunities overseas, as well as some new opportunities from vehicles to energy storage, such as photovoltaic products to household energy storage products to electric vehicles, and then the entire V2G loop of electric vehicle energy storage, are all within the scope of attention.



Liu Bo, General Manager/Managing Partner of Qidi Star Venture Capital, witnessed the collapse of the photovoltaic industry around 2010 and the rapid development of the energy storage industry in the past two years, with the investment targets doubling in size.



Throughout the industry, in fact, all industries are cyclical, and early investments often need to be made before they become popular. Qidi Star Venture Capital continues to focus on "technological innovation, people-oriented" investment strategies, and has already laid out many energy storage projects to date.



Liu Bo said that Qidi Star Venture Capital mainly focuses on technological breakthroughs in electrochemical energy storage. On the one hand, it has invested in early projects of sensor underlying devices in BMS, PCS, frequency modulation, and safety issues, which are currently the most painful points. This is because in the rapid development process of market updates, it will face some technical difficulties. What are the original technological innovations that can reduce costs and improve efficiency? Therefore, it is more concerned about these technical directions.



On the other hand, in the field of new energy, Qidi Star also focuses on improving efficiency in new materials, continuous clean new energy, new processes, and sustainable commercialization of costs. For example, in the fields of hydrogen energy and perovskite, it has also laid out its core components and technological breakthroughs around the bottleneck of cost reduction and efficiency improvement.



She also emphasized that Qidi Star Venture Capital is currently very concerned about safety, including fire protection systems for energy storage, thermal management materials, etc., so she also hopes to see how there can be some new technological innovation opportunities in various aspects, from materials to management, detector sensing end to chips. Although it may sound like small things, there are no small things in front of safety.



Wu Lei, Managing Director of Songhe Capital, stated that the main track of Songhe Capital is divided into three directions. From the perspective of the new energy track, it is more focused on the background layout of energy structure transformation, positioning energy storage as investment infrastructure, and focusing on materials, technology, and industrial applications.



From the perspective of materials, the main focus is on new technological materials and processes that can improve the energy density of energy storage, battery energy density, and enhance its safety. Specifically, the new generation of batteries is a key focus of attention;



From the perspective of application, the transformation of the entire energy structure has spawned many scenario based solutions, which is somewhat similar to the Internet era. The development of 4G has extended many new portraits and brought many new opportunities, which is also what Songhe Capital values;



So, specifically from the perspective of energy storage functions, it may become finer and more vertical in the future. So Songhe Capital will also pay more attention to the application level, for example, in addition to the underlying logic of materials, it will also focus more on new applications at the application level. At least now, the pattern of the industry is still in the process of formation, and it is also showing a state of blooming flowers.



At the end of the salon, Ma Dongjun also rose to the level of Huadao. "Dual carbon" is actually a matter for all humanity, not just China. Chinese enterprises already have the foundation for globalization, as well as such talent reserves and perspectives. And to do globalization, it's not just about established companies like Mingyang Wind Power, startups can also participate.



And this is also the reason why we want to continue our salon and connect everyone's technology market and investment well.

Bill Gates leads investment in long-term thermal energy storage startups with $50 million in long-term energy storage technology
Form Energy and Georgia Power Deploy 100 Hour Long Term Energy Storage Projects to Replace Thermal Power
The Global Long Term Energy Storage Council releases a White Paper on Long Term Energy Storage (Abstract and Documents)