Reasons for the rise of the US energy storage market

　　The strong demand and development potential of the US energy storage market  is the consensus of the energy storage industry, and SES Power also has a  considerable number of US customers. Based on our experience, we believe that  the rapid development of the US energy storage market is mainly driven by the  following factors:

　　A. A mature electricity market lays the foundation for the development of  energy storage.

　　Since the 1990s, the United States has promoted the reform of electricity  deregulation, and Decree No. 888, Decree No. 889, and Decree No. 2000 have been  continuously promulgated. These decrees corrected the unfair discrimination in  the opening of monopolistic transmission lines, and the market gradually opened  up the transmission network; put forward information disclosure requirements for  power market participants, and made quantitative regulations on information  disclosure; clarified RTO (Regional Power Grid Operation Center)/ISO  (Independent system operation center) to implement a unified real-time operation  mode and so on.

　　Under this legal framework, the United States has experienced problems such  as the California energy crisis, the slowdown in the construction of the  wholesale power market, and safe power outages in the operation of the power  grid. The 10 regional power markets in Southeast, Southwest, SPP and Texas have  become one of the typical representatives of mature power markets in the  world.

　　The mature electricity spot and ancillary service market, and the generally  implemented time-of-use electricity pricing mechanism, can bring about a large  peak-to-valley price difference and provide good economic support for energy  storage.

　　B. Favorable policies are the underlying logic of energy storage  development

　　In 2006, the federal government proposed the ITC (Federal Investment Tax  Credit) policy to encourage users to install renewable energy generation  systems. At present, the policy has been extended to the hybrid projects of new  energy and energy storage, which can offset up to 30% of the initial investment,  which has greatly promoted the growth of energy storage facilities.

　　In 2018, FERC passed Bill 841. The bill clearly states that battery energy  storage can participate in electric auxiliary services and electricity wholesale  markets as an independent subject, removing the barriers for energy storage to  enter the capacity, energy and auxiliary service markets, enabling the  establishment of a profit model for battery energy storage, and the United  States ushered in Energy storage installation boom.

　　In December 2020, the U.S. Department of Energy released the "Energy  Storage Development Roadmap" report to further enhance the strategic position of  energy storage in order to build a resilient, flexible, economical, and secure  energy system.

　　In the same month, the U.S. Congress extended the Investment Tax Credit  (ITC) for solar energy systems for two years; passed the Better Energy Storage  Technology (BEST) Act, which will provide federal government support for energy  storage technology research, development and demonstration over the next five  years. Provide 1 billion US dollars of financial support for innovation  investment.

　　In 2021, the U.S. Department of Energy announced that it would fund $11.6  billion for the Energy Storage Grand Challenge program to address technical  barriers.

　　Fund subsidies, tax relief, clear independent subject status, and the  continuous introduction of favorable policies have undoubtedly stimulated the  enthusiasm of the energy storage market to varying degrees, boosting the rapid  development of the energy storage market.

　　C. The real demand for battery energy storage is increasing

　　The U.S. power grid is relatively old, and the earliest pumped-storage  power stations have a certain impact on the environment, and the project  approval and construction cycle is about 10 years. Since 2000, almost no new  power stations have been built.

　　As the installed capacity of new energy increases year by year, the demand  for it from the power grid is also increasing day by day. Existing power  resources such as pumped-storage power stations have been unable to meet the  demand for renewable energy to connect to the grid, and coupled with high  renovation costs, it is inevitable to seek new solutions.

　　Based on this, the battery energy storage system has become increasingly  popular due to its advantages of flexible installation, rapid response, accurate  adjustment, and short construction period. New energy has a rigid demand for it,  and it continues to rise.

　　D. The cost is reduced and the economy is prominent.

　　40% of the power generation in the United States comes from natural gas.  However, as the cost of photovoltaics and lithium batteries decreases, the peak  regulation effect and economy of solar energy storage projects on the grid side  are both better than those of natural gas; on the power generation side, as long  as the power of energy storage is matched Controlled within 50%, most  solar-storage PPA projects have begun to be competitive compared to natural gas  power plants. The prominence of economy has mobilized the investment enthusiasm  of electric power enterprises to a large extent.

　　In addition, in September 2021, the U.S. Department of Energy announced the  "Long Duration Storage Shot" plan, announcing that it will strive to reduce the  cost of systems with energy storage durations of more than 10 hours by more than  90% within 10 years.

　　It is not difficult to launch, the cost has dropped significantly, and the  competitiveness has increased day by day, which is undoubtedly a strong and  continuous driving force for more entities to enter the energy storage  field.

　　According to the survey data released by the U.S. Energy Information  Administration (EIA), it is expected that 10GW of battery energy storage systems  will be deployed in the United States in the next two years, of which more than  60% will be deployed with photovoltaic systems.

　　The above are some of SES Power's summary of the rapid development of  energy storage systems in the United States. We can easily draw a few key words:  mature market, policy, clean energy demand, and cost reduction. These links are  closely linked and predictable. For example, although the cost of lithium  batteries has risen this year, over a long period of time, the price of lithium  batteries, especially lithium iron phosphate batteries that can perfectly  replace lead-acid batteries, shows a very regular downward curve. Lithium  batteries are now half the price they were a decade old (after inflation). For  this reason, SES Power has launched a lot of lithium battery energy storage  system products, such as our 12V100Ah, 24V100Ah, 36V100Ah, 48V100Ah lithium iron  phosphate batteries using EVE, CATL, BYD square aluminum shell, and 3KW home  energy storage. , 5KW system, rack-mounted energy storage system, etc.

　　The US energy storage market is about to enter an explosive period, which  is our judgment.