The energy storage sector has emerged as an increasingly competitive field. In 2023 alone, 73,000 new companies joined the industry, nearly doubling the number of new entrants from 2022, which saw 40,000 new companies. This influx represents nearly the same amount as the total new companies established over the previous six years.
Entering a Turbulent Arena
2021 is often heralded as the pivotal year for the energy storage sector, marking the commencement of what many call "the dream begins".
In July of that year, the National Development and Reform Commission and the National Energy Board released the "Opinion on Accelerating the Promotion of the Development of New Types of Energy Storage". This landmark policy at the national level heralded a new era, encouraging companies to venture into the field of new energy storage.
Remarkably, the targets set within the 'Opinion'—achieving 30GW of new energy storage capacity by 2025—were met by 2023, a full two years ahead of schedule.
At a press conference on January 29, 2024, Bian Guangqi, deputy director of the Energy Conservation and Science and Technology Equipment Department, announced that by the end of 2023, China had achieved a cumulative installed capacity of 31.39GW in new energy storage projects.
Reflecting on the close of 2020, China's energy storage capacity was at 35.6 GW. Within three years, this dynamic market saw some companies thrive while others struggled significantly.
On April 16, 2021, an explosion at an energy storage facility in Dahongmen, Fengtai, Beijing, resulted in a tragic fire, claiming the lives of an inspector and two firefighters. This incident led to an immediate halt on all ongoing and planned electrochemical energy storage projects in Beijing.
Investigations revealed that the explosion was due to an internal short circuit in a lithium battery, causing a thermal runaway fire. Firefighters battled the blaze for nearly eleven hours, from their arrival at 12:24 until the fire was completely extinguished at 23:40.
This event cast a long shadow over the electrochemical energy storage industry, with a subsequent two-year unofficial ban in Beijing causing significant industry stagnation.
Before the issuance of the 'Opinion', the installed capacity of domestic electrochemical energy storage was reported to be 1.9GW in 2021, underscoring the chilling effect of safety incidents on the entire sector.
GS Technology was founded in this volatile period, facing challenges such as the ongoing pandemic, safety incidents at energy storage facilities, and a fiercely competitive market spurred by the new policy.
For GS Technology, focusing initially on residential energy storage, 2021 was far from an auspicious start, given the external challenges.
In a media interview, GS Technology's General Manager, Mr. Ye Shuling, shared insights into the company's turbulent founding period, marked by significant impacts on recruitment, operations, and production.
Despite these challenges, GS Technology chose to enter the energy storage industry, bolstered by a strong market demand, confidence, and capability, as articulated during the 14th China International Energy Storage Conference and Exhibition (CIES) at the Hangzhou International Expo Center.
Navigating Through Competitive Waters
The energy storage market is intensely competitive, particularly in sectors like battery cells and inverters, which see low profit margins, and temperature control and fire protection systems, which enjoy higher margins.
GS Technology, through its sub-brand GSCOOL, ventured into the energy storage temperature control and fire protection markets, while another sub-brand, GS ENERGY, focused on the international residential energy storage market.
The importance of temperature control in ensuring the safety and longevity of storage systems cannot be overstated. Mr. Ni Anye, R&D Director of GSCOOL emphasized that the optimal operating temperature for lithium-ion batteries is crucial for maintaining battery capacity, life, and safety.
The performance of lithium-ion batteries is highly sensitive to temperature. It is widely accepted within the industry that lithium batteries operate effectively within a temperature range of -40°C to 60°C, with an optimal range of 10°C to 35°C. At excessively low temperatures, the electrolyte may solidify and impedance may increase; at high temperatures, battery capacity, lifespan, and safety are significantly diminished.
A critical concern is that continued temperature increases can lead to energy accumulation within the battery, surpassing safety thresholds and potentially causing the battery to swell and deform. Without intervention, this can lead to thermal runaway, posing significant safety hazards.
To counteract these issues, energy storage temperature control units implement active thermal management strategies, such as enhanced cooling and regulation of coolant flow, to maintain the battery within its normal operational temperature range. This helps prevent rapid capacity loss and reduces the likelihood of failures escalating into fires. Additionally, in cases of localized thermal runaway, the active thermal management system can limit the spread, thus preventing the escalation of the incident and mitigating losses.
Showcasing the GSCOOL Slim 3kW Energy Storage Liquid Cooling Product
The company's innovative approaches in thermal management, such as the GSCOOL slim type 3kW liquid cooling product, exemplify its commitment to efficiency and safety.
It equipped with a power-down memory feature, offering various alarms, records, and protective functions. It uses the safer and environmentally friendly R513A refrigerant and meets the IPX5 protection standard.
The design of the product is notably sleek and integrates easily with horizontal installations, simplifying setup and reducing costs. It includes a compressor and water pump with efficient frequency conversion and a fan with intelligent speed control, enhancing its energy efficiency. Additionally, it features an RS485 communication interface and standard Modbus RTU protocol, allowing for centralized control capabilities.
Recent Developments and Industry Challenges
On March 11, 2024, the State Administration for Market Supervision and Regulation (SAMSAR) initiated public consultations on 223 proposed national standards, including fire safety protocols for electrochemical energy storage, marking a significant step in industry regulation.
Last year, China Post Securities released the "Energy Storage Industry 2024 Investment Strategy Report," indicating a drop in the overall gross profit margin for temperature control—often viewed as the last profitable sector in energy storage—by the end of 2023.
"Our cost pressures are considerable. Reducing costs and enhancing efficiency are crucial for our clients," Mr. Ni remarked, emphasizing efforts to optimize product size for better utilization rates.
The Evolution of Temperature Control
Temperature control and fire protection, once niche areas, have become central to the energy storage industry, with these vendors comprising nearly a fifth of all exhibitors at CIES2024. This segment not only attracts major system integrators but also draws manufacturers from various sectors due to the fundamental similarities in cooling technologies across industries, including data centers and electric vehicles.
GSCOOL's Competitive Edge
GSCOOL's offerings are distinguished by their dual-cycle approach—incorporating both refrigerant and coolant cycles—common in air conditioners and other cooling systems. This integration sets GSCOOL apart as the market seeks comprehensive solutions combining thermal management and fire protection.
Innovations in Design and Operation
The GSCOOL 3kW product is reputed as the industry's thinnest liquid cooling solution, reflecting an optimal design achieved early in its development.
GSCOOL is also transitioning to semi-open systems that reduce maintenance needs and operational costs.
In enhancing service systems, GSCOOL has introduced specific technological advancements in air-cooling condensers that improve energy efficiency by 15% to 20%, demonstrating attention to detail that significantly impacts performance.
Leveraging Experience from Other Industries
While the concept of liquid cooling in energy storage might be relatively new, it builds on mature applications in other fields like electric vehicles, where direct cooling techniques have been successfully implemented.
Mr. Ni explained, "By significantly reducing the size of our temperature control products, we decrease costs and increase the overall system utilization for our clients, fostering a chain reaction of efficiency and cost savings throughout the ecosystem."
Strategic Positioning and Future Outlook
With lithium's historical volatility and the intense focus on optimizing thermal management costs to near those of electric vehicles, GSCOOL is strategically poised for growth. The company expects to fully leverage these advances within three to five years, guided by a robust R&D team that consistently delivers innovative products tested to high standards.
GSCOOL's production capabilities, which include an automated line capable of producing 50,000 liquid-cooled units annually, underscore its commitment to quality and responsiveness.
Under the leadership of General Manager Mr. Ye Shuling, GS Technology remains committed to a philosophy of simplicity, efficiency, and incremental progress.
With ongoing support from a highly experienced R&D team, GS Technology aims to drive technological breakthroughs that benefit customers and advance the industry at large.
Looking to the Future
GS Technology, along with GS COOL and GS Energy, pledges to continue serving global users and fostering the development of renewable energy solutions. Adhering to core values of quality, innovation, efficiency, and mutual benefit, the company strives to be a leading provider of intelligent energy solutions worldwide.
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