1. Liquid Cooling Solutions Accelerate Penetration, Expanding the Energy Storage Thermal Management Market
1.1 Air Cooling Dominates Current Energy Storage Thermal Management, Liquid Cooling Emerging as Future Trend
There are various forms of thermal management for energy storage, and air cooling and liquid cooling are relatively mature. The current mainstream thermal management methods include air cooling, liquid cooling, heat pipe cooling and phase change cooling. At present, the application of air cooling and liquid cooling is relatively widespread, while the industrialization degree of heat pipe cooling and phase change cooling is relatively low. Among them, phase change cooling is a cooling method that uses phase change of phase change materials to absorb heat. It has the advantages of compact structure, low contact thermal resistance, and good cooling effect. However, the cost of phase change materials is relatively high, and the heat storage and heat dissipation speed is relatively slow. It is currently less used in the field of energy storage temperature control. Heat pipe cooling relies on the phase change of the cooling medium enclosed in the pipe to achieve heat exchange. It has the advantages of high heat dissipation efficiency, safety and reliability, but the cost is also high. It is rarely used in large-capacity battery systems such as energy storage. Based on the maturity of technology and the degree of industrialization, we believe that air cooling and liquid cooling will still be the main forms of energy storage temperature control in the medium and long term.
| Key Thermal Management Methods for Energy Storage Systems | |||||
| Item | Air cooling | Liquid cooling | Heat pipe cooling | Phase change cooling | |
| Passive | Active | Cold end air cooling | Cold end liquid cooling | Phase change material + thermal conductive material | |
| Cooling efficiency | Medium | Higher | Higher | High | High |
| Cooling speed | Medium | High | High | High | Higher |
| Temperature drop | Medium | Higher | Higher | High | High |
| Temperature difference | Higher | Low | Low | Low | Low |
| Complexity | Medium | Medium | Medium | Higher | Medium |
| Cost | Low | Higher | Higher | High | Higher |
Air cooling system has a low initial cost and is safe and reliable, and is currently the main form of energy storage temperature control. Air cooling is a cooling method that uses air as a cooling medium and uses convection heat transfer to reduce the temperature of the battery. It is widely used in temperature control scenarios such as industrial refrigeration, communication base stations, and data centers. The technology maturity and reliability are relatively high. In addition, the overall structure of the air cooling system is relatively simple and easy to maintain, and the initial investment cost is relatively low. Considering its advantages in cost and reliability, air cooling is currently the most mainstream solution in the field of energy storage temperature control.
Air cooling system has low heat dissipation efficiency, poor temperature difference control, and a large footprint, and its scope of application is relatively limited. First of all, due to the low specific heat capacity and thermal conductivity of air itself, the heat dissipation efficiency of the air cooling system is not high. Although it can meet the temperature control requirements of most current energy storage power stations, with the continuous improvement of the single-unit scale and energy density of energy storage projects, the shortcomings of the air cooling system in heat dissipation efficiency will gradually become apparent. In addition, in common air cooling systems, air always flows unidirectionally from the air inlet to the air outlet, which will cause a large temperature difference between the batteries located at the air inlet and outlet, thereby causing a great impact on the consistency of the batteries. Although there are currently improvement solutions such as string air conditioners, this does not fundamentally solve the disadvantages of air cooling in temperature difference control. Finally, the air cooling system requires the deployment of a large area of heat dissipation channels, which will significantly affect the space utilization of the energy storage power station, thereby restricting the scale of the energy storage container and the improvement of the energy density. Based on the above reasons, the scope of application of the air cooling system in the field of energy storage has certain limitations.
Liquid cooling systems have strong heat dissipation capabilities and low life cycle costs, and are expected to become a future development trend. Liquid cooling is a cooling method that uses liquids such as water and ethylene glycol as a medium to reduce the temperature of the battery through heat convection. Compared with air cooling, the structure of the liquid cooling system is more complex and compact, does not require the deployment of a large area of heat dissipation channels, and occupies a relatively small area. At the same time, because the heat transfer coefficient and specific heat capacity of the coolant are higher and are not affected by factors such as altitude and air pressure, the liquid cooling system has a stronger heat dissipation capacity than the air cooling system, and is more adaptable to the development trend of large-scale and high energy density energy storage projects. From a cost perspective, according to relevant research, under the same cooling effect, the energy consumption of the liquid cooling system is usually much lower than that of the air cooling system. Therefore, although the initial investment cost of the liquid cooling system is high, its comprehensive cost over the entire life cycle of the energy storage system may be lower than that of the air cooling system. In summary, we believe that in some scenarios, liquid cooling is expected to gradually replace air cooling and become the mainstream form of energy storage temperature control.
Under Equal Energy Consumption, Liquid Cooling System Shows Superior Cooling Effect on Lithium Battery Modules Compared to Air Cooling
Liquid cooling systems still face certain challenges in terms of reliability and other aspects. Previously, liquid cooling was relatively rarely used in the field of energy storage temperature control, and the technical maturity was still somewhat behind air cooling, especially in terms of operational stability and reliability. Specifically, the pipelines in the liquid cooling system are prone to corrosion and deposition, which can cause blockage or leakage of the coolant, while common coolants such as water, ethylene glycol, and silicone oil may damage the battery or cause a short circuit in the system, leading to safety hazards in energy storage power stations. In addition, the design life of the energy storage system is usually 15 years, but the service life of the pumps and valves inside the liquid cooling system is often about 7 years. There is a certain mismatch between the two, so during the operation of the energy storage project, it is very likely that the liquid cooling system will need to be maintained or system components replaced by shutting down, thereby affecting the economic feasibility of the project. Of course, with the advancement of liquid cooling technology, we believe that these problems are expected to be solved one after another, and overall liquid cooling will still be the future development trend of energy storage temperature control.
1.2 Energy Storage Thermal Management Market Poised for Rapid Growth
Liquid cooling solutions are accelerating their penetration, and the unit value of energy storage temperature control is expected to continue to increase. In summary, from the perspective of refrigeration performance and full life cycle cost, the advantages of the current liquid cooling system have gradually begun to manifest. Judging from the new products launched by major battery manufacturers and energy storage system integrators in 2021, liquid cooling has become the mainstream temperature control solution. We expect that the application ratio of liquid cooling in energy storage systems will increase rapidly from 2025. At present, the unit price of the liquid cooling system is about 2-3 times that of the air cooling system. Therefore, with the accelerated penetration of liquid cooling, the overall unit value of the energy storage temperature control system is expected to show an upward trend.
| Liquid Cooling Emerges as the Mainstream Solution in New Products from Leading Energy Storage Battery/System Integrators | ||
| 2023 | 2024 | |
| CATL | Launched the first liquid-cooled energy storage product EnerOne, which was certified by TÜV SÜD. | EnerOne was delivered in batches and the liquid-cooled outdoor prefabricated cabin system EnerC was launched. |
| BYD | Launched the first liquid-cooled energy storage product, Cube 28, which covers an area of 16.66 square meters and has a capacity of 2.8MWh. | The upgraded version of blade battery, Cube 28, is under development, and its equivalent 40-foot container capacity will exceed 6MWh. |
| Envision Energy | Energy storage products basically adopt air cooling solution | Launched the first liquid-cooled smart energy storage product with battery life +20% and energy consumption -20%. |
| Sungrow Power | Launch a new liquid-cooled energy storage system to reduce the cost of energy storage supplementation and lower LCOS. | |
| SmartPropel Energy | Launched SPP1 (372Kwh+200Kw) liquid-cooled energy storage system, with energy density +80% and service life +20%. | |
| CHINT New Energy | Released the TELOGY Camelback 1500V liquid-cooled energy storage system, mainly targeting the power supply side. | |
| Clou Electronics | Launched the integrated liquid-cooled energy storage system E30, 2.5MWh 1CP, backward compatible. | |
Energy storage temperature control volume and price are rising, and the global market space is expected to exceed RMB 13 billion in 2025. As calculated above, the global new energy storage installed capacity is expected to exceed 300GWh in 2025, and it is expected that the proportion of lithium battery energy storage will remain at around 95% in recent years. Based on this, we assume that the penetration rate of liquid cooling systems will increase from about 10% in 2021 to about 40% in 2025, and the shipment volume of energy storage air cooling/liquid cooling systems in 2025 will reach 175/117GWh respectively. At present, the unit value of air-cooling/liquid-cooling systems is approximately RMB 30 million/90 million/GWh. If the two maintain an annual decline of about 3%/5% in the future, the global energy storage temperature control market size is expected to exceed RMB 13 billion in 2025, and the overall unit value will increase from RMB 36 million/GWh to RMB 45 million/GWh in 2025. The industry is expected to achieve “both quantity and price increase” growth.
| Global Energy Storage Thermal Management Market Space Analysis | |||||||
| Unit | 2020 | 2021 | 2022 | 2023 | 2024 | 2025E | |
| Global new energy storage installed capacity | GWh | 10.8 | 29.30 | 91.30 | 140.30 | 207.80 | 306.90 |
| Lithium battery energy storage share | % | 95% | 95% | 95% | 95% | 95% | 95% |
| Global new lithium battery energy storage installed capacity | Gwh | 10.2 | 27.8 | 86.7 | 133.3 | 197.4 | 291.6 |
| Air cooling system share | % | 95%9.7 | 90% | 85% | 80% | 70% | 60% |
| Air cooling system shipments | GWh | 0.3 | 25.1 | 73.7 | 106.7 | 138.2 | 175 |
| Air cooling system unit value | RMB billion/GWh | 2.9 | 0.3 | ol29 | 0.28 | 0.27 | 0.27 |
| Air cooling system market size | RMB billion | 5 | 750% | 21.5 | 30.1 | 37.8 | 46.5 |
| Liquid cooling system share | % | 0.5 | 10% | 15% | 20% | 30% | 40% |
| Liquid cooling system shipments | Gwh | 0.9 | 2.8 | 1300% | 26.7 | 59.2 | 116.6 |
| Liquid cooling system unit value | RMB billion/GWh | 0.5 | 0.9 | 0.86 | 0.81 | 0.77 | 0.73 |
| Liquid cooling system market size | RMB billion | 0.33 | 2.5 | 11.1 | 21.7 | 45.7 | 85.5 |
| Energy storage temperature control unit value | RMB billion/GWh | 3.4 | 0.36 | 0.38 | 0.39 | 0.42 | 0.45 |
| Energy storage temperature control market size | RMB billion | 10 | 32.6 | 51.8 | 83.5 | 132 | |
| Growth rate | % | 197% | 225% | 59% | 61% | 58% | |
2. Favorable Market Landscape for Energy Storage Thermal Management: Leading Players Gain the Upper Hand
2.1 Thermal Management: A Niche but Key Segment in the Energy Storage Value Chain with a Favorable Competitive Landscape
The energy storage temperature control system has a low value share but is of outstanding importance, and the subsequent cost reduction pressure is relatively small. Similar to other new energy industries, continuous cost reduction is an important prerequisite for opening up the space for energy storage demand. Considering that batteries account for about 60% of the cost of energy storage systems, it is expected that batteries will become the key link in reducing the cost of energy storage systems in the future. According to BNEF’s forecast, the benchmark cost of four-hour power station-level energy storage will drop from US$299/kWh in 2020 to US$167 in 2030, and the contribution of batteries to the reduced cost will reach more than 70%. In comparison, temperature control accounts for only about 3%-5% of the overall cost of energy storage systems, and plays a vital role in the overall safety and reliability of the system. Therefore, we believe that energy storage integrators or project owners are more inclined to choose high-quality, stable-performance temperature control solutions rather than simply reducing costs. It is expected that the cost reduction pressure faced by energy storage temperature control will be relatively relaxed in the future.
The requirements for control accuracy and operational reliability of energy storage temperature control systems are significantly higher than those in general civil and industrial refrigeration fields, and there are high technical barriers in the industry. As mentioned earlier, the temperature control system is an important guarantee for the safe and efficient operation of energy storage projects, so there are relatively stringent requirements in terms of control accuracy and operational reliability. Taking the air cooling solution as an example, compared with ordinary civil air conditioners, the precision air conditioners used in the air cooling system need to be upgraded accordingly in terms of air circulation, heat dissipation efficiency, stability, service life, reliability, etc. For liquid cooling solutions, how to ensure the heat dissipation effect while avoiding problems such as coolant leakage is also a great technical difficulty. Therefore, for general civil air conditioning companies, it is not easy to cross over into the field of energy storage temperature control, and there are certain technical barriers in the industry.
| Comparison of Precision Air Conditioning and Residential Air Conditioning | ||
| Project | Precision Air Conditioning | Residential Air Conditioning |
| Application area | Focusing on the equipment working environment, the goal is to protect the equipment’s reliable operation, improve efficiency, and reduce operating costs. | Living environment, to protect physical and mental health, improve work efficiency and quality of life. |
| Air circulation | The required space environment parameters are highly uniform and the number of air circulations per unit time is large. | The uniformity of the entire space is not high, and the number of cycles is small. |
| Thermal management | Focusing on thermal management, the design has high sensible heat ratio and small enthalpy difference characteristics. | The wet load ratio is large, and the design has the characteristics of low sensible heat ratio and large enthalpy difference. |
| Thermal stability | Temperature fluctuation ≤±1℃ | Generally controlled at +3℃~5℃. |
| Humidity management | The environment has high requirements for humidity accuracy, requiring the humidity to be set to ±5% | According to hygiene and comfort requirements, it is controlled at 40%~65%RH, with a wide range. |
| Operating environment | Operating environment: -40℃~+45℃ Working mode: “24 hours × 7 days” continuous operation | Operating environment: -5℃~+45℃ Working mode: “8 hours X7 days” intermittent operation. |
| Design life | Longer | Short |
| Reliability | Meet the needs of unattended work and high reliability requirements | Relatively low reliability. |
The energy storage temperature control system has a high degree of customization, which requires sufficient project experience and customer relationship accumulation. The leading manufacturers have a strong first-mover advantage. Energy storage is widely used in power systems. The requirements for energy storage systems in different scenarios are often quite different. Even for similar application scenarios, the technical solutions of different energy storage system integrators may be different. Therefore, the energy storage temperature control system is not a standardized product, but usually needs to be customized according to the specific requirements of different projects or the technical solutions of different manufacturers. Whether it is an air-cooled or liquid-cooled system, the compressors, fans, pipelines, pumps and valves used are mostly standardized devices. We believe that the core competitiveness of energy storage temperature control manufacturers lies in the design and integration capabilities of the overall system, and there is a strong stickiness between them and downstream battery or integrator customers. On the one hand, energy storage temperature control manufacturers need to maintain in-depth communication with customers in the product/solution design stage to fully understand customer needs; on the other hand, energy storage system integrators are also more inclined to those temperature control manufacturers who have formed long-term cooperative relationships and whose product reliability has been verified by actual projects. Therefore, from the perspective of technology accumulation and customer relations, leading energy storage temperature control manufacturers that started early and have rich project experience will have a strong first-mover advantage.
SmartPropel Energy Energy Storage Temperature Control Products
Shenzhen SmartPropel Energy System Co., Ltd. has strong R&D capabilities and a large production capacity based on years of technological accumulation. It has matched relevant liquid cooling and air cooling products for customers in the energy storage field. In the future, it will further expand the energy storage temperature control product market through comprehensive advantages such as precise temperature control, high reliability, high safety, and temperature uniformity.
