In the overall global market situation, as of 2022, electrochemical energy storage in Europe is expected to reach 4.7GWh, with a growth rate of 30% CAGR by 2026; The electrochemical energy storage in the United States is expected to reach 12GWh, with an expected growth rate of 70% by 2023. China is expected to surpass the United States as the GJ with an installed capacity of XX by 2025.

In terms of energy storage policy, Europe has introduced a carbon neutrality policy to provide opportunities for the development of energy storage. GJ, including Germany, Britain and France, allows energy storage to participate in the scoring mechanism. Grid companies are also lowering the threshold of the wholesale power market and the power balance market. The United States introduced Act 2222 in 2018, requiring grid operators and dispatchers to allow energy storage companies to participate in the wholesale electricity market, laying the foundation for the development of energy storage business models.

In terms of business models, energy storage systems have three major aspects:

One is to provide balancing services for the power grid, participate in auxiliary balancing markets, and obtain profits;

Secondly, in the GJ market with capacity, profits can be obtained by providing backup services for the system;

The third is to buy and sell electricity, cut peak and fill valley, sell electricity at high prices, buy electricity at low prices, and balance the volatility of new energy. It is necessary to participate in the electricity wholesale market to obtain profits.

The current market application in Europe and America is for peak shaving and valley filling, with 58% -60% of energy storage used for peak shaving and valley filling to obtain profits; Next is civilian energy storage, accounting for approximately 13%; Providing auxiliary balancing services for the power grid accounts for 16%, and this business model can achieve high profits because this service is a scarce service in the power grid and closely related to stability, with profits of 20-30 times. The specific business model of a region depends on the actual situation. For example, only a free and open market model can carry out market-oriented operations, while some vertically integrated regions in the United States cannot carry out market-oriented operations, while regions with relatively high marketization levels in Europe can sometimes provide more creative space for energy storage.

In summary, Zhongzhi Company believes that energy storage systems mainly focus on industrial, commercial, and household energy storage in the European and American markets, with great potential for development.