In July, lithium carbonate prices once again experienced a downturn, witnessing a substantial 9.6% decrease by month’s end compared to the outset. As upstream supply gradually becomes more abundant, downstream manufacturers persist in their strategy of maintaining low inventory levels. Throughout July, the price of lithium carbonate exhibited a steady decline, dipping below the 300,000 yuan in the middle of the month. By early August, the pace of this decline accelerated further, with lithium carbonate prices plummeting to 250,000 yuan per ton.
Within the domestic landscape, the capacity of lithium battery energy storage system projects awarded through bidding in July totaled 4384MWh, indicating a month-on-month decline of 1016MWh. The majority of successful projects were secured by major energy companies, with only a small portion involving tenders for new energy initiatives, grid-side energy storage, and shared power station energy storage systems. In July, the weighted average bidding price for a 0.5C storage system stood at 1.01 yuan per Wh, marking a decrease of 0.04 yuan per Wh compared to June’s average price and a remarkable 31% drop from January’s average. With the advent of the peak installation season in the latter half of the year and the launch of centralized procurement projects by large-scale central energy enterprises, we anticipate a growth in the capacity of bidding energy storage projects over the upcoming 3-4 months.
Based on a part of data provided by CNESA, July 2023 saw the unveiling of a total of 143 domestic power storage projects, spanning planning, construction, and operational phases. The combined capacity of these projects amounted to an impressive 21.4GW. In terms of new domestic installations, July witnessed a capacity of 2.4GW/4.9GWh, contributing to a cumulative total of 10.6GW/21.7GWh for the period spanning January to July. Notably, the surge in centralized grid connections experienced in June led to a 32% month-on-month decline in the newly operational scale of power projects for July.
Turning our attention overseas, the price trajectory of European natural gas futures has experienced a significant shift this year. Compared to the previous year, European natural gas futures prices have plummeted by over 60% since the beginning of the year. However, despite this decrease, the European natural gas supply remains challenged by the vulnerability of an unstable supply in the context of a tight balance. As the impact of maintenance at Norwegian gas plants gradually lessened, European natural gas futures prices regained equilibrium levels in July. Nonetheless, a recent disruption caused by a strike at an Australian gas project triggered a surge in Dutch TTF natural gas futures prices in early August, once again underscoring the fragile nature of natural gas dynamics in Europe.
According to the U.S. Clean Energy Association, the second quarter of 2023 saw a remarkable resurgence in utility-scale energy storage installations across the United States. New installations during Q2 surged to 1,510MW/5,098MWh, marking an impressive year-on-year increase of 52.2% and 106.6%. Furthermore, there was an extraordinary quarter-on-quarter growth of 227.6% and 374.2% in energy storage compared to the previous quarter. In addition, a total of 31 energy storage projects have successfully integrated with the grid. Among these projects, 17 are independent energy storage ventures, while 14 projects involve the storage of energy generated from wind power or PV sources. The confirmation process for energy storage projects tends to be long and the industry has robust willingness to wait due to the declining prices of lithium carbonate. Consequently, the first quarter experienced a year-on-year decline in the growth rate of installed U.S. energy storage capacity. However, the second quarter witnessed a significant month-on-month upsurge in installed capacity, thus validating our previous projections that the latter half of the year (H2) will likely see a rebound in U.S. energy storage capacity.