| Date | August 16, 2023 |
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InfoLink’s senior analyst Dr. Yuan Fang-wei shared his insights of status quo and trends of the global and Taiwan electrochemical energy storage industry at a seminar held by Billion Watts in Taipei on Aug. 16.
Titled “Industrial and Commercial PV+ESS Technologies for Behind-the-Meter Application,” the seminar brought together professionals to explore trends and opportunities in the industry.
During his speech, Dr. Yuan pointed out that Taiwan’s installed solar capacity was 9.7 GW as of December 2022. While that figure has increased to 10.72 GW in May this year, Taiwan still needs 9.28 GW to achieve the 20 GW goal by 2025. Despite rapidly growing markets overseas driven by high energy prices and declining supply chain prices, the Taiwanese market is relatively inactive this year. Moreover, module prices in Southeast Asia dropped markedly in the second quarter of this year, edging out Taiwanese manufacturers in the increasingly competitive market. Currently, demand in the Taiwanese market is fulfilled by local modules, but the market share of Taiwan-made modules is showing sign of decreasing as the price gap widens between Taiwanese and Southeast Asian modules.
Regarding Taiwan’s energy storage market, Dr. Yuan projects that new installations will exceed 500 MW (dReg+E-dReg) this year. The market saw lower-than-expected installations in the past two years, but it starts to grow markedly from this year. The market size is expected to grow more evidently in 2026 driven by the second wave of energy storage demand and the wind energy sector.
In the first half of this year, falling lithium prices and increasing capacity across the industrial chain led to a significant decline in prices for cells and energy storage system. Under an optimistic scenario, the energy storage market in Taiwan is expected to surpass NT$20 billion this year, amounting to NT$300 billion in 2030, said Dr. Yuan.
Although the energy storage market size will grow rapidly from 2026 to 2030, the growth of economies of scale will slow due to decreased prices. As system and EPC (purchase and construction) account for the majority of project construction, Taiwanese companies, which are relatively disadvantaged in terms of system capability and resources, should seize opportunities to develop business for maintenance and operation services, agent, or long-term energy management platforms, Dr. Yuan noted.
Looking into the global lithium-ion battery and energy storage market, Dr. Yuan provided analysis of grid-storage, C&I storage, and residential storage developments. On the grid-storage side, China has added 18 GWh in the first half of this year, the highest so far. With advantages over cell supply, policies, and continued development in standalone storage, the Chinese market is expected to add more than 40 GWh this year, accelerating the global market growth at a pace of more than 100%, reaching almost 95 GWh.
Dr. Yuan also shared his view on the lithium-ion battery technology development. He believes that LFP battery will remain the mainstream for energy storage system in the years to come due to its safety and price advantage. For the EV or lithium-ion battery industries, Ni-rich NCM and NCMA coupled with low portion of silicon cathode will be the ultimate development of this generation of lithium-ion batteries, with an energy density of 300 Wh/kg.
The advantages and disadvantages of LFP, NCM, and flow batteries will be more obvious in the development of product differentiation. For example, flow batteries are more suitable for long-duration energy storage of more than 6 hours, while NCM batteries will be the preferred choice for EVs with higher mileage requirements.