On the morning of October 18, 2023, Chinese President Xi Jinping attended the opening ceremony of the 3rd Belt and Road International Cooperation Summit Forum at the Great Hall of the People in Beijing and delivered a keynote speech titled "Building an Open, Inclusive, Interconnected, and Shared World." President Xi announced eight actions to support the high-quality development of the Belt and Road Initiative and emphasized China's commitment to deepening cooperation with all parties to push for a new phase of high-quality development of the Belt and Road, making continuous efforts to contribute to the modernization of countries worldwide.
What is the Belt and Road Initiative?
The Belt and Road Initiative is inspired by the ancient Silk Road and focuses on promoting connectivity. It involves strengthening policy communication, infrastructure connectivity, facilitating trade, financial integration, and fostering people-to-people bonds with countries. Its aim is to inject new vitality into global economic growth, open up new opportunities for global development, and create a new platform for international economic cooperation.
President Xi Jinping announced the eighth action in the eight actions supporting the high-quality development of the Belt and Road Initiative, which is particularly focused on promoting green development. China will continue to deepen cooperation in green infrastructure, green energy, and green transportation. It will increase support for the Belt and Road Green Development International Alliance, continue to host the Belt and Road Green Innovation Conference, establish a dialogue and exchange mechanism for the photovoltaic industry, and create a network of green and low-carbon experts. China will implement green investment principles for the Belt and Road and aims to provide training for 100,000 people in partner countries by 2030. This undoubtedly sends a significant signal for the promising development prospects of the energy storage and photovoltaic industry.
The Impact of the Belt and Road Initiative on the Energy Storage Industry
Energy storage, as part of the 'new infrastructure,' has experienced robust development in recent years and is poised to become a new star linking the Belt and Road economies. The Belt and Road Initiative is driving international cooperation in energy storage and new energy sources. Despite facing numerous challenges due to unilateralism and protectionism, the industry has encountered several challenges. Many countries are witnessing the rise of their photovoltaic markets, which is also a primary direction for China's photovoltaic exports in the future. While the prospects for development are extensive, we must still address the shortcomings. This includes exploring advanced commercial pathways for energy storage, hydrogen energy, and leveraging the internet to develop new energy formats and models. It also involves promoting foreign investment in China's energy sector through market-oriented reforms and establishing market-led energy pricing mechanisms to create new conditions for international cooperation in new energy within the Belt and Road framework.
Opportunities for Energy Storage Development in the Belt and Road Initiative
From a geographical perspective, the Belt and Road Initiative primarily spans two major regions. The first is the "land routes" region, which traverses the Eurasian continent, including Central Asia, West Asia, North Africa, and Eastern Europe, and follows the historical Silk Road economic belt. The second is the "sea routes" region, which is oriented towards the 21st-century Maritime Silk Road and covers Southeast Asia, South Asia, West Asia, East Africa, and more, linking regions through the Pacific and Indian Oceans.
In the "land routes" region of the Belt and Road Initiative, there is generally good solar irradiation and favorable wind resources. However, there is still significant room for improvement in electricity infrastructure. The market for new energy paired with energy storage is extensive, with a notable example being energy storage projects complementing photovoltaic installations in regions like Central Asia and the Middle East.
Based on the varying economic development levels of different countries in the "sea routes" region of the Belt and Road Initiative, the energy storage market can be broadly categorized into two segments. The first segment represents high-end markets, with Singapore being a notable example. The second segment includes emerging markets like India, Indonesia, the Philippines, Kenya, and others.
Aligned with the goals of the Paris Agreement, Southeast Asian countries are expected to deploy approximately 21 GW of renewable energy annually by 2030. This includes a significant portion of wind and solar photovoltaic power, which is projected to account for 18% of electricity generation by 2030, and is set to increase to 44% by 2050. It is anticipated that by 2030, the photovoltaic solar power capacity in the Middle East is expected to reach 50 GW ，the Middle East region will witness a substantial increase in photovoltaic power generation, which will, in turn, drive the demand for energy storage installations.
Egypt, being one of the earliest countries to join the Belt and Road Initiative and one of the most proactive nations in North Africa when it comes to the development of renewable energy, is projected to reach an energy storage capacity of 6.5 GW by 2030.
The Belt and Road Initiative, along with its neighboring countries, offers energy storage markets with the potential to exceed 20 TWh of theoretical market space. Different regions, due to their varying natural environments, economic development levels, electricity demands, and other factors, provide diverse opportunities for the development of energy storage markets.
The Belt and Road Initiative and the Future Energy Storage Market Space in Surrounding Countries Could Exceed 20TWh
Along the Belt and Road Initiative's 'sea routes' region, the power grid exhibits characteristics of discontinuity and single dispersion due to geographical factors. Consequently, energy storage projects in these areas are primarily off-grid and microgrid applications. Regardless of whether it's the 'land routes' region or the 'sea routes' region, countries along the Belt and Road Initiative have different levels of economic development, including both high-end and emerging markets. Companies need to diversify their strategies. According to predictions, the theoretical market space for energy storage in the Belt and Road Initiative and surrounding countries could exceed 20TWh. Various regions, due to differences in natural environments, economic development, electricity demand, and other factors, offer distinct development opportunities for energy storage markets.
In the Belt and Road Initiative's Central Asian region, which is located in the heart of the Eurasian continent and lacks access to the ocean, there is limited annual precipitation. This region benefits from long hours of solar irradiation, making it conducive to abundant solar energy resources. Additionally, in the Middle East and North Africa, although these regions are coastal, they are situated in subtropical high-pressure areas where descending air masses inhibit precipitation. Consequently, these regions offer favorable conditions for both sunlight and wind energy.
New Energy Storage: A Crucial Area for High-Quality International Cooperation in the Belt and Road Initiative
New energy storage represents a critical domain for high-quality international cooperation within the Belt and Road Initiative. The Belt and Road Initiative serves as a significant bridge for China to connect with international collaboration and a mainstream platform for China's integration into the global arena. The concept of global investments in green energy is being widely promoted worldwide, making the collaboration of new energy and energy storage within the Belt and Road Initiative an inevitable trend.
In recent years, as China's economic development has entered a new phase, there has been a substantial surge in electricity demand for both production and daily life. Cost-effective, small-batch solar and energy storage products with higher cost efficiency have gained popularity among households and small to medium-sized enterprises. In the active exploration of international capacity and investment cooperation, bilateral national investment mechanisms, wind power, and solar energy have emerged as essential aspects of China's international cooperation in new energy.