CITIC Construction Investment: Domestic energy storage is expected to still have growth momentum and potential in 2027

The Zhitong Finance App learned that CITIC Construction Investment released a research report saying that since 2026, the pace of large-scale domestic storage and installation has been slow, and the actual implementation of the project has fallen short of expectations. The core is the decline in price differences between peaks and valleys in the northwest region. At the same time, rising system operating costs since this year, slow implementation of capacity electricity prices in various provinces, increases in lithium carbonate prices, and delays in grid-connection approval have also affected the operating economy of energy storage. Looking ahead to 2027, it is expected that domestic energy storage will still have momentum and potential for growth in 2027, driven by lower prices for lithium carbonate, increased demand in regions such as North China, Northeast China, and South China, and new scenarios such as computing power collaboration.

CITIC Construction Investment's main views are as follows:

Since 2026, the growth rate of large domestic storage capacity has fallen short of expectations. The core is the decline in price differences between peaks and valleys in the northwest region

From January to September 2026, domestic energy storage added 35.3GW/102.3 GWh, compared to -3% and +6%. The installed growth rate fell short of expectations. The core reason was that the peak price gap in northwest China narrowed: for example, the average peak price in Mengxi fell by about 40%-47% year on year. The reason for the bank's judgment is that (1) the northwest load growth rate has been slow since this year, which has a certain relationship with economic restructuring and cool summer weather, affecting the peak intensity of electricity prices in the evening; (2) Inner Mongolia's energy storage installed capacity has reached 22GW, while the peak load of Mengdong+Mengxi is about 51GW, and nighttime energy storage discharge can no longer be ignored; (3) Wind power has become dominated by installations in the northwest, and its “reverse peak” characteristic also suppresses the evening peak.

Other important reasons include rising system operating costs, slow implementation of capacity electricity prices, and stricter and slower grid-connection approvals

System operating costs in all provinces across the country increased by an average of 3 cents/kWh compared to last year, which is equivalent to reducing the peak and valley price differences that can be obtained in actual operation of energy storage. Actual implementation of capacitive electricity prices is also slow, and there is a problem of delayed distribution. The tightening and slowing of grid-connection approval, and the obvious increase in the price of lithium carbonate in the first half of the year also had an impact. The bank lowered the domestic storage capacity in '26 to 230 to 250 GWh, an increase of about 21% to 32% over the same period.

Domestic reserves still have growth points in 2027

(1) The decline in the price of lithium carbonate is expected to boost the economy of energy storage investment. The price of lithium carbonate is about 3 cents/Wh, total investment IRR increased by about 0.5%, and capital IRR increased by about 2%; (2) demand is shifting to North China, Northeast China, South China and other provinces. The price difference between peak and valley in Shanxi, Shandong, Hebei, and Northeast China is 0.3-0.4 yuan/kWh, and independent energy storage investment is more economical; (3) Business models such as joint entry of new energy distribution and storage into the market and telecommunication collaboration are gradually being opened up.