More than one expert has suggested that the core issue of "carbon neutrality" is the energy transition, and the core issue of energy transition is energy storage technology.

When the whole society reaches a consensus on the huge market potential of the energy storage industry, it means that the fierce regional competition has entered a white-hot stage. In the past two years, "energy storage" has appeared more and more frequently in investment promotion forums, government-enterprise exchange "breakfast meetings" or industry technology seminars, and the spotlight has gathered.

An executive of an energy storage manufacturing company told China Business News that he had never felt so deeply the enthusiasm of being regarded as a "guest of honor" everywhere. "The top leader leads the team personally. As long as we are willing to set up a factory, land, water and electricity, and tax incentives can be discussed. If the headquarters can be moved there, the local treatment will be more favorable. In the past, we did not dare to think about it." He also thus opened the busy investigation and negotiation of the "flying man" mode.

There are many factors affecting the development of the energy storage industry, including talents, markets, industrial support, mineral resources ...... Energy storage is not limited to high-end industries, not a "solo dance" in first-tier cities, nor a simple continuation of traditional manufacturing, and the advantages of attracting other industries may not be applicable to energy storage.

Among the many cities that anchor the "energy storage capital", Changsha, located in the hinterland of central China, is particularly bright. In 2022, the output value of Changsha's advanced energy storage materials industry will exceed 100 billion yuan, with 150 enterprises in the chain. Changsha ranks first in the "Top Ten Cities of New Energy Storage in 2022" selected by Sadie Consultants. According to data from the First Finance and New First-tier City Research Institute, Changsha is the only city in the country to achieve 100 percent of the material end cross-chain layout.

Why can a city lack of mineral resources in the upstream counter attack the advanced energy storage material industry? How can Changsha continue to lead in the current competition?

if you don't have a clue, go to the alumni circle of central south university to dig

Since last year, Huang Li (a pseudonym), who works for a venture capital institution in Beijing, has been traveling to Hunan more frequently.

As a new investor in the new energy circuit, he did not have much intersection with this central province at first. The focus of finding high-quality projects was mainly in Beijing, Shanghai and Jiangsu and Zhejiang. However, when contacting battery enterprises, he accidentally found that many founders and technical backbones of start-up companies have the educational background of a university in Hunan-"if you have no clue, go to the alumni circle of Central South University to dig a dig", which is a saying circulated in the venture capital circle.

As a result, Huang Li began to travel to and from Hunan frequently to "break into" the alumni circle of this school, which became a shortcut for him to obtain a large number of project resources in a short time.

The reason behind this is that Central South University has a long list of alumni: wang Chuanfu at the helm of BYD, Xia Xinde, founder of Penghui Energy, leader of power battery, Bai Houshan, chairman of Rongbai Technology, leader of lithium battery cathode materials, Xu Kaihua, chairman of Greenmei, leader of power battery recycling, Pan Dangyu, leader of Haopeng Group, leader of power power supply and energy storage system, and Ouyang Minggao, academician of Chinese Academy of Sciences, who focuses on new energy power system and transportation electrification, in addition, many new energy listed companies have close technical cooperation with Central South University.

In the view of Xi Xiaoming, secretary general of Hunan New Materials Industry Association, the unique advantage of Changsha's rapid rise of advanced energy storage materials industry comes from this.

"Many people have the impression that Hunan was originally positioned as a major agricultural province and was not rich in mineral resources, so why is the battery materials industry developing so well? I think it must be admitted that the talent has helped us a lot, giving Changsha a first-mover advantage in preemptive layout." Xi Xiaoming is a witness to the development of Changsha energy storage materials industry. He has been engaged in the research of metallurgy and new functional materials for a long time. He once served as the director of the Metallurgical Materials Institute of Changsha Mining and Metallurgy Research Institute.

In Xi Xiaoming's impression, the domestic market was still blank when Changsha developed the energy storage material industry. In the early 1990 s, the rise of wireless communication technology and market led to a surge in demand for nickel-cadmium, nickel-hydrogen and lithium-ion batteries for cordless phones and mobile phones. At that time, the battery and material industry chain was mainly in Japan, and the core of industrial technology was materials and applied electrochemistry. As the "Whampoa Military Academy" in the lithium battery industry, the metallurgical physical chemistry major of Central South University spans metallurgy, materials and electrochemistry, and the composite academic background is unique in China. Later, Wang Chuanfu, Xia Xinde, Li Xinhai, Wang Xianyou, Zhong Faping and Hu Guorong, who were active in the field of battery materials science and technology and industry, all graduated from this major.

according to the statistics of the first finance and economics new first-tier city research institute, Changsha is the first batch of cities in the region to lay out raw materials for energy storage batteries. among them, Hunan zhongke xingcheng graphite co., ltd. and Hunan changning carbon co., ltd. were established in 2001 and have now grown into specialized new enterprises.

In 2002, Changsha Mining and Metallurgical Research Institute and Taiwan Lithium Co., Ltd. jointly established Hunan Changyuan Lithium Co., Ltd., which opened the prelude to the development of advanced energy storage materials industry. After Hunan Shanshan, Hunan Bangpu, Hunan Ruixiang, Zhongke Xingcheng and other companies were established one after another, which opened the prelude to the development of Changsha lithium-ion battery advanced energy storage materials industry.

Recognize needs, build up strength, and then "wait for the wind to come". Around 2015, Changsha entered a period of strong growth, forming a "bipolar" of upstream raw materials for energy storage batteries in central China together with Hefei, and opening a large gap with subsequent cities. Later stories are familiar to people: with the "carbon neutral" and "carbon peak" goals put forward and deepened, the advanced energy storage materials industry ushered in a policy overlay, the market huge development window period.

not only has a large industrial volume, Changsha's advanced energy storage material industry has formed a closed chain of "precursor-positive and negative electrode materials, electrolyte, diaphragm-sagger-battery cell, battery pack packaging and manufacturing-distributed energy storage-recycling and reuse of waste batteries", which means that theoretically a new energy battery can be produced without Changsha.

According to the statistics of the aforementioned CBN · New First-tier City Research Institute, nearly 40% of the technology-based enterprises in the energy storage battery industry in Changsha are located in multiple links upstream and downstream of the industrial chain, and the proportion is higher than that of other industries. Head city. This shows that Changsha's battery raw materials technology enterprises have fully extended their business to other links of the industrial chain, deepened the upstream and downstream collaboration of the production chain, and promoted the full-chain development and full-chain matching of the Changsha energy storage battery industry chain.

Talent is not only the answer to Changsha's energy storage industry from scratch in the past, but also an important boost to the top per capita revenue of local companies today. The above statistics show that among the listed enterprises related to energy storage in Changsha, nearly 60% of the employees have bachelor's degree or above, and the proportion of highly educated talents ranks Top 3 in the new first tier cities. With Zhongwei New Energy, Changsha Fodi, Long-term Lithium and other head enterprises as the representative, Changsha energy storage battery industry talent accumulation has become a scale, to promote the entire industry to high-value, intelligent transformation and upgrading. Relying on the advantages of highly educated talents, the per capita revenue of its energy storage listed enterprises ranks second among the new first-tier cities.

Through the "lithium cycle"

According to data from the National Energy Administration, by the end of 2022, lithium-ion battery energy storage accounted for 94.5 percent of the country's new energy storage installations, and other technical routes totaled 5.5 percent. This means that lithium batteries dominate the energy storage advanced materials industry.

Since the 1990 s, lithium-ion batteries have been widely used in mobile phones, tablet computers, notebook computers and other digital products in China, as well as low-speed electric vehicles, automobiles and other means of transportation. Nowadays, most of the companies labeled as "advanced materials for energy storage" are evolved from the above-mentioned consumer and power lithium battery applications.

Desai Battery is one of the representatives of the lithium battery business transformation. Kong Xiangpeng, executive vice president of Hunan Desai Battery, told China Business News that 2012 to 2022 is an important period for Desai battery development, forming a scale effect in consumer terminals and small and medium-sized power battery business, gathering head customers in many fields across the country. "The consumer 3C lithium battery market relies on the global economic environment, and its growth is generally slowing down. However, energy storage is on a golden track, with great room for development and a trillion-dollar scale, so we decided to take advantage of the trend to expand the energy storage battery business."

on may 19, desai battery held a mass production and commissioning ceremony for the first phase of the 20GWh energy storage battery cell project in Changsha. In addition to the Huizhou headquarters, this is the largest investment by Desai Group so far.

Kong Xiangpeng told reporters that when the company decided to set up factories to build batteries, many places threw out "hydrangea" and proposed preferential land policies, tax reductions and exemptions, and funds. Although the conditions offered by Changsha are not the most superior, the foundation of the first cooperation makes the enterprises feel the attitude of the local government to stress responsibility, efficiency and service. As early as 2019, the Desai battery smart phone soft-pack battery project was settled in Wangcheng Economic Development Zone, realizing the start of construction, production and profitability that year. At the same time, Changsha has excellent energy storage ecological industry ecology and talent advantages, which has strengthened Desai's determination to invest and develop in Changsha.

However, one of the test questions that these companies on the outlet currently have to face is how to deal with the asset-heavy and cyclical challenges of the lithium battery industry.

Kong Xiangpeng told reporters that taking lithium battery production line investment as an example, the budget before 2021 is 0.5 billion yuan per GWh investment cost, but by this year, the investment cost has rapidly dropped to 0.15 billion yuan to 0.25 billion yuan, or even lower. "On the one hand, the process technology has matured a lot, on the other hand, we have a lot of domestic equipment to choose from. The background that cannot be ignored is the great expansion of the domestic lithium industry, and the advantage of scale has come up, which not only gives us the space to reduce the cost, but also brings the challenge of peer competition."

high prosperity makes enterprises feel the pressure of being "rolled. According to the incomplete statistics of the first financial reporter, there have been more than 100 financing events in the energy storage industry in the past year, and financing cases of 100 million yuan have appeared many times. Cross-border people who have entered the energy storage battery link from real estate, home appliances, Internet and other industries have flocked to it, and almost all links of the industrial chain are full of investors.

"At present, the bidding price of energy storage for some projects is even as low as 0.4 yuan/Wh, and many manufacturers have to take their shares and orders at a loss. The projects thus done will have great potential safety hazards in the future operation. I often say two words with the team, quality is the lifeline of the product, safety is our survival. Therefore, in this round of expansion, competition and reshuffle, our strategy is to pursue product safety and performance, while remaining sensitive to new technology routes." Kong Xiangpeng said.

Hunan Yacheng New Energy Co., Ltd. Executive General Manager Sun Zi Guang is no stranger to the scene. In the past ten years or so, there has been a cycle of lithium battery expansion every few years, from short supply to oversupply. He believes that since 2021, the crazy expansion of production in the industry has caused serious overcapacity in the lithium battery and materials industry. At this stage, the new production capacity is gradually released, but the growth of demand is lower than the growth of supply, and the outcome will be a cruel All-round competition, leaving a few companies with strong core competitiveness to survive.

Yacheng New Energy, founded in Changsha in 2007, is an enterprise engaged in the research and development, production and sales of lithium battery cathode material precursors. Iron phosphate is an important precursor of lithium iron phosphate cathode material for lithium ion batteries. Since 2020, with iron phosphate production capacity, shipments and quality continued to lead the country, Yacheng New Energy successfully among the national lithium battery materials leading enterprises.

Sun Zinguang told reporters that the company's revenue was about 2 billion yuan last year and is expected to reach 3 billion yuan this year. Among them, the lithium battery market of consumer electronics tends to be mature and stable, with an annual growth rate of about 8% ~ 9%. New energy batteries are the main revenue growth point. This year's growth rate is expectedUp to 110 percent.

Power batteries and energy storage batteries are the two emerging business directions in the lithium-electric industry. At present, the two downstream business shipments of Yacheng New Energy account for about 7:3. Sun Ziguang said that in principle, the materials of the two can be used in common, but there are differences in the index requirements. For example, the energy density requirements of power batteries are relatively high to meet the needs of high-speed and high-power use, while the energy density of energy storage batteries is relatively low, but requires higher reliability and life. In addition, due to the lack of a reasonable cost guidance mechanism, some projects have to allocate a corresponding proportion of energy storage in order to get the construction index, resulting in the pursuit of product cost performance of the energy storage battery track more extreme.

"The value of the cathode material precursor to lithium is like the importance of the quality of rice to cooking a pot of rice. The core technology is here. Therefore, on the one hand, we need to continue our high control ability in product stability and consistency. This is not something that any manufacturer can do by investing in a factory casually. It requires long-term technical precipitation and practical experience. On the other hand, we should be sensitive to new technologies, new processes and new markets, and adjust the direction and posture in time to wait for the reshuffle." Sun Ziguang said.

Today's beautiful Yacheng New Energy has also had a difficult time. In the industry cycle from 2011 to 2014, because of the poor market and the weak strength of the company, cash flow problems, once relied on loan collateral to barely maintain operations. Since then, the company has been focusing on breaking through the bottleneck of technology and raw materials, until the outbreak of the new energy industry in 2020 suddenly opened up the imagination of lithium battery, and the performance doubled several times. "No matter how the outside world changes, one is to see the right direction, and the other is to persist in practicing internal skills." Sun Zi Guang said.

Careful selection under the tide of production expansion

Competitors, price wars, overcapacity ...... These shadows are shrouded in almost every lithium and materials company. In order to survive better, they will repeatedly weigh and compare the direction of each technology research and development, the cost of transformation and upgrading, and the cities that invest in expanding production. For Changsha, the catch-up of other cities in China makes the existing talents and complete industrial ecological advantages no longer obvious. How to retain and attract more advanced enterprises is a challenging new topic.

Hunan long-term lithium co., ltd. (long-term lithium co., ltd., 688779.SH) is one of the earliest enterprises in China with mass production capacity of ternary cathode materials, headquartered in Changsha, and a member of China Minmetals corporation. GGII and Xinyi information statistics show that from 2018 to 2021, long-term lithium science ranked first, second, third and fourth in domestic ternary cathode material shipments, with market shares of 10.34, 10.1, 10.0 and 9.0, respectively.

long-term lithium board secretary Zeng ke told the first finance and economics, the current domestic head of the ternary cathode material manufacturers between the difference is not big, some enterprises have a slightly higher market share, but the capacity utilization rate is not as good as other head manufacturers. And let the expansion of production capacity fully running, is the key to win the market. At present, the long-term lithium branch is orderly promoting the fund-raising project vehicle lithium battery cathode material expansion phase II project, annual output of 60000 tons of lithium iron phosphate project, is expected to be fully completed and put into operation this year.

it is worth mentioning that in may this year, long-term lithium science and Fuqing municipal government of Fujian province signed a letter of intent to build a comprehensive industrial base project of high-performance lithium battery materials in the local area, mainly producing ternary cathode materials (supporting ternary precursor production line) and lithium iron phosphate cathode materials. This may become the first long-term lithium production base outside Hunan Province, the project is planned to invest 10 billion yuan.

Zeng Ke said that for battery materials companies, Changsha's advantages and disadvantages are obvious. On the one hand, Changsha lacks leading battery companies. At present, the advanced energy storage material industry in Changsha is mainly based on energy storage raw materials and intermediate materials. In recent years, although Fodi battery, Desai battery and Huaxing new energy have been introduced, there is still a gap in the total battery capacity compared with Shenzhen and other cities. On the other hand, the cost of electricity in Changsha is higher. Compared with Yunnan, Guizhou, Sichuan, Qinghai and other western provinces, the electricity price in Changsha is 0.15 yuan to 0.3 yuan/kWh higher. Therefore, local enterprises are facing greater cost competition pressure compared with their counterparts in the western electricity price advantage region.

The above problems have attracted the attention of the local government. In February of this year, the Changsha Municipal Bureau of Industry and Information Technology and the Changsha Municipal Bureau of Finance jointly issued the "Implementation Opinions on Supporting the Development of the Advanced Energy Storage Materials Industry" Implementation Rules, from electricity subsidies, land supply support, and financial services, Encouraging innovation, application promotion and other aspects, to promote the high-quality development of Changsha's advanced energy storage materials industry cluster. Among them, the qualified enterprises of advanced energy storage materials above designated size will be rewarded with 0.15 yuan/kWh according to the increase in electricity consumption in the previous year. Valid until December 31, 2026.

if the battery cell link is weak, high electricity prices affect the battery material industry shipments and costs, then the lack of mineral resources is related to whether enterprises can break through the shackles of "stuck neck.

Few industries are filled with such intense uncertainty and drama as lithium. Over the past year and a half, the price of lithium carbonate has experienced roller coaster fluctuations. According to data from Shanghai Nonferrous Metals Network, the price of battery-grade lithium carbonate has risen from about 280000 yuan/ton in early 2022 to about 600000 yuan/ton, and then the current market price of battery-grade lithium carbonate has fallen to 210000 yuan/ton. The prices of other key raw materials for lithium batteries were first affected by supply and demand, rising to varying degrees in 2022 and falling to varying degrees in 2023. The sharp rise and fall of raw material prices has triggered a series of "earthquakes" in the middle and lower reaches of enterprises ".

"Lithium battery has always been a matter of buying up and not buying down. When the market is good, it is not even a question of whether you are willing to pay, but it is not related to the market and cannot be bought at all. Even if you buy it, if you fall, you will have to bear great economic losses. However, there is no guarantee that there is no raw material capacity, and customers will prefer those companies that can deliver on time, and their share will increase. Therefore, it is very critical to control the key upstream mineral resources in our own hands in the long run." Sun Zi Guang said.

In order to get rid of the passive situation, Yacheng New Energy and its parent company, Hezhong Technology, are currently in contact with domestic markets such as Yunnan, Guizhou and Africa in order to obtain mineral resources such as lithium and phosphorus. Sun Ziguang said that under the inherent conditions of Hunan's own lack of relevant mineral resources, if it can actively cooperate with other regions rich in mineral resources, it can avoid the worries of enterprises and provide strong support for the development of enterprises.

Xi Xiaoming believes that the industrial scale is leading in the country, the market competitiveness of leading products is strong, and advanced manufacturing models are widely used. These are the significant advantages of Changsha's advanced energy storage material industry. However, in order to promote the construction of industrial clusters with high quality, we must solve the problems of weak core links, insufficient support of production factors, and lagging layout of frontier industries. "Only by looking objectively and working to close these gaps can we expect companies to vote with their feet."