1. The temperature control industry faces a promising future, with ample opportunities in niche markets

Definition of temperature control: Temperature control primarily refers to the process of regulating and controlling the temperature or temperature difference of components such as batteries based on their requirements for the working environment, utilizing heating or cooling methods. It finds widespread applications in various scenarios including industry, communications, consumer electronics, servers, energy storage, and new energy vehicles. Temperature control equipment is of great significance for ensuring the normal and stable operation of components such as batteries, servers, and mobile phone chips, as well as maintaining the stability of environments in industries, healthcare, and laser applications. Temperature control equipment products can be primarily categorized into industrial temperature control equipment, precision temperature control equipment (electronic cooling devices), and other temperature control equipment, with industrial and precision temperature control equipment accounting for a significant market share.

From a scenario perspective, the typical usage scenarios of temperature control equipment mainly include four major scenarios: industrial level, computer room level, battery thermal management level, and electronic chip level. In terms of technology, the underlying temperature control technologies mainly include air cooling, chilled water (indirect evaporative cooling), liquid cooling, phase change materials, and electronic heat dissipation technology (thermal conductive material heat dissipation, heat pipe heat dissipation, uniform heat plate, etc.).

Due to differences in technology and working environments, specific requirements for temperature control technology vary across various scenarios of temperature control equipment. Industrial-level temperature control has the highest degree of customization and meets multiple requirements such as temperature, humidity, and cleanliness, thus primarily relying on traditional air cooling/water cooling. Computer room scenarios mainly focus on cooling and energy-saving needs, with temperature control technology transitioning from air cooling to indirect evaporative cooling. As the power of power batteries and energy storage batteries continues to increase, safety and cooling effect are the primary considerations in battery thermal management, thus the temperature control technology in this scenario is gradually transitioning from air cooling to liquid cooling. Electronic chip-level scenarios have limited heat dissipation space and small component sizes, requiring relatively high levels of technology and craftsmanship, primarily focusing on the electronic chip heat dissipation process level.

Application of temperature control in the wind power sector
Currently, temperature control equipment is widely used in various aspects of the electric power industry, including power generation, transmission, distribution, and consumption, covering fields such as direct current transmission, new energy generation, flexible AC transmission and distribution, and high-power electric drive. In the field of new energy generation, it is primarily applied to the cooling of core equipment such as converters, generators, and photovoltaic inverters in wind turbine units. With the continuous increase in the power of wind turbine units and power transmission systems, megawatt-scale units are becoming increasingly widespread, and the power density of components used in their converters and motors is also correspondingly increasing. In the following, we will mainly introduce the application of temperature control technology in wind turbine units;

In photovoltaic power generation systems, solar cells and batteries provide DC power, while the load requires AC power. Therefore, an inverter is necessary for power conversion. As the grid-connected capacity of solar photovoltaic power generation increases, the required voltage level and conversion efficiency for grid connection gradually rise, leading to a larger power inverter. The higher the power of the inverter, the higher the power density of the electrical components it uses. Traditional air cooling methods are no longer sufficient to meet its cooling requirements, and water cooling has emerged as the most advanced and reliable solution. Pure water cooling equipment for new energy converters has been developed accordingly.

High growth in energy storage demand + increasing proportion of liquid cooling, the market space for energy storage temperature control is vast

Air cooling and liquid cooling have been applied on a large scale, and technologies under research include heat pipe cooling and phase change cooling

Currently, there are primarily four temperature control technologies available for large-capacity lithium-ion battery energy storage systems, each suitable for application scenarios with different heat generation rates and ambient temperatures: Air cooling: Utilizing air as the medium for heat exchange, it boasts advantages such as simple structure, portability, high reliability, long lifespan, and low cost. However, due to the low specific heat capacity and thermal conductivity of air, the heat dissipation rate and efficiency of air cooling systems are not high. Therefore, air cooling is more suitable for applications where the battery heat generation rate is relatively low; Liquid cooling: Utilizing liquid as the medium for heat exchange, liquid cooling media exhibit high heat transfer coefficients, large specific heat capacities, and fast cooling speeds, effectively reducing the maximum temperature of the battery and improving the uniformity of temperature distribution. Liquid cooling systems have complex structures and high costs, but they possess high heat dissipation rates and efficiencies. Currently, most electric vehicles adopt liquid cooling systems; Heat pipe cooling: Relying on phase changes of the cooling medium inside the tube to achieve heat exchange, it boasts higher heat dissipation rates and efficiencies than liquid cooling systems, with a lower risk of cooling medium leakage but higher costs. It is suitable for lithium battery systems that often operate under high-rate conditions; Phase change cooling: Absorbing heat through phase change materials and combining it with air cooling, liquid cooling, air conditioning systems, etc. to dissipate heat, it has advantages such as compact structure, low contact thermal resistance, and good cooling effect. However, phase change materials occupy space and are costly; when combined with other thermal management technologies, it can achieve uniform battery temperature distribution, reduce contact thermal resistance, and improve heat dissipation rates.

Technological Trend: Currently, air cooling is the dominant approach, with a promising increase in the proportion of liquid cooling in the medium term
Energy storage temperature control mainly relies on air cooling and liquid cooling. We mainly compare the two in terms of battery pack temperature, operational energy consumption, battery thermal runaway risk, and fixed assets investment: Battery Pack Temperature: Under the same inlet temperature, limit wind speed, and flow rate, the temperature of liquid-cooled battery packs ranges from 30 to 40 degrees Celsius, while the temperature of air-cooled battery packs ranges from 37 to 45 degrees Celsius; liquid cooling has better temperature uniformity. Operational Energy Consumption: Experimental research has shown that to achieve the same average battery temperature, air cooling requires 2-3 times more energy than liquid cooling; under the same power consumption, the maximum temperature of the battery pack is 3-5 degrees Celsius higher for air cooling than for liquid cooling; liquid cooling has lower power consumption. Battery Thermal Runaway Risk: Due to factors such as the smaller specific heat capacity of air and the lower convective heat transfer coefficient, battery air cooling technology has low heat transfer efficiency, leading to increased battery heat generation, which can result in excessively high battery temperature and thermal runaway risk; liquid cooling systems can significantly reduce the risk of battery thermal runaway. Fixed Assets Investment: According to NREL data, the current investment cost per kilowatt-hour for a 4-hour battery energy storage system is 1900 RMB (300 USD), with the thermal management system estimated to account for 2-4% of the battery cost. Liquid cooling systems are more likely to ensure that batteries operate at a comfortable temperature, extending battery life by more than 20% compared to air cooling systems. From a comprehensive life cycle perspective, liquid cooling requires less investment.

Enterprises from various industries have successively entered the market, and the landscape of the energy storage temperature control market is beginning to emerge
Current participants in the energy storage temperature control market are primarily industry players with technical similarities who have entered the market from different sectors: Currently, domestic energy storage temperature control is mainly deployed by data center temperature control enterprises, industrial cooling equipment enterprises, and automotive temperature control enterprises. From a technical perspective, container energy storage temperature control and container data center temperature control are most similar, while the similarity in automotive thermal management stems from the fact that both temperature control objects are electrochemical batteries, which require adaptation to changes in outdoor working conditions. Enterprises from different industries have successively entered the energy storage temperature control arena, seizing the initial energy storage temperature control market, and the market landscape of energy storage temperature control is beginning to emerge. Inveco is the earliest domestic manufacturer to engage in electrochemical energy storage temperature control. Coupled with its own technological accumulation, it currently holds an absolute dominant position in energy storage temperature control, with its 2021 revenue from energy storage temperature control reaching approximately 337 million yuan.

We believe that as enterprises from different industries enter the energy storage temperature control arena, the future market for energy storage temperature control may present a pattern of "one dominant player and multiple strong players". Among them, Inveco, with its first-mover advantage and accumulation of non-standardized technology, is expected to become the "dominant player" in the energy storage temperature control industry; Tongfei and Gaolan, with their differentiated advantages, are expected to become "strong players" in the energy storage temperature control industry.
Invenk: With its first-mover advantage and accumulation of non-standardized technology, it is expected to become the "dominant player" in the energy storage temperature control industry
Invenco is a leading domestic provider of precision temperature control and energy-saving solutions and products. It is committed to providing equipment cooling solutions for cloud computing data centers, server rooms, communication networks, power grids, energy storage systems, power conversion, and other fields. It also offers related automotive air conditioning, chillers, and other products and services for passenger cars, heavy-duty trucks, refrigerated vehicles, subways, and other vehicles. Additionally, it has launched a series of air environment machines for human health and air quality. Currently, the company has four major product lines: room temperature control and energy-saving products, cabinet temperature control and energy-saving products, passenger car air conditioning, and rail transit train air conditioning and services. The company's existing precision air conditioning products cover technologies including air cooling, liquid cooling, and indirect evaporative cooling. From 2014 to 2019, the company's market share in domestic room air conditioning increased from 4.1% to 9.0%.
Leader in domestic energy storage temperature control industry: The company is the earliest manufacturer in China to get involved in the temperature control of electrochemical energy storage systems. It has been a leader in the domestic energy storage temperature control industry for many years and is also a major supplier of temperature control products to numerous domestic energy storage system providers. In 2020, the company launched a series of water-cooled units and began to apply them in various domestic and overseas energy storage application scenarios in batches. From 2020 to 2022H1, the company achieved operating revenues of nearly 100 million yuan, 337 million yuan, and 250 million yuan from energy storage applications respectively, with significant improvements in energy storage business performance and evident first-mover advantages. In liquid-cooled energy storage systems, the company continues to enrich its product offerings and optimize the end-to-end liquid cooling system to enhance system performance and operation and maintenance efficiency. Leveraging its brand advantage and customer base in the energy storage industry, the company has been actively expanding its customer base both domestically and internationally, achieving remarkable results.
2. The energy storage industry has entered a period of rapid development, and energy storage fire protection is thriving
Accidents in energy storage power stations occur frequently, and energy storage safety has given rise to the demand for energy storage fire protection
Electrochemical energy storage is a highly energy-dense chemical integrated device. If there are battery abuse situations such as overcharge, overdischarge, overcurrent, thermal runaway, and internal short circuit, it is easy to cause internal heat accumulation in the battery. Once the critical point is exceeded, thermal runaway will occur, and the thermal runaway will spread rapidly, affecting battery modules, battery cabinets, and even energy storage battery compartments. The combustible gases released during battery combustion will further prolong the combustion time, increase the difficulty of extinguishing, and even cause explosions, ultimately leading to severe economic and personal damage.
Energy storage power station accidents occur frequently, and energy storage safety issues urgently need to be addressed: According to incomplete statistics from the International Energy Network, a total of 37 explosion accidents occurred in energy storage power stations worldwide from 2011 to January 2022, with 4 occurring in China. On April 16, 2021, an accident at the energy storage power station of Beijing Guoxuan Fuweisi Solar Energy Storage Charging Technology Co., Ltd. resulted in one death, two firefighters sacrificing their lives, one firefighter being injured, and direct property losses of 16.61 million yuan. In terms of new energy vehicle accidents, according to data released by the Fire and Rescue Bureau of the Ministry of Emergency Management of China, a total of 640 new energy vehicle fires were reported domestically in the first quarter of 2022, an increase of 32% compared to the same period last year. In terms of the types of batteries involved in the accidents, 82% of energy storage accidents were caused by lithium-ion batteries, primarily due to the fact that the decomposition temperature of the cathode material in lithium-ion batteries is only 200°C, making them prone to thermal runaway and subsequent fire.
Policies support the development of energy storage fire protection, and the energy storage fire protection sector faces a long and challenging journey
The policy emphasizes fire safety in energy storage, which is beneficial to the development of the industry: The "Safety Regulations for Electrochemical Energy Storage Power Stations (Draft for Comments)" issued in September 2021 requires the integration of fire prevention into video surveillance systems and the establishment of systematic solutions, making it more refined and technologically advanced. It also stipulates safety technical requirements for equipment, operation, maintenance, repair, testing, and other aspects of energy storage power stations. The "National Fire Protection Work Plan for the 14th Five-Year Plan" issued in February 2022 proposes to strengthen fire protection design and source management around new energy storage facilities. Various policies have put forward detailed requirements for the construction and management of energy storage power stations; guided the construction of supporting fire prevention facilities for energy storage, and improved the operational safety of energy storage power stations; proposed the target installed capacity and cost reduction and efficiency improvement goals for 2025, guiding the development of the energy storage market.
With the successive implementation of multiple policies and standards related to energy storage fire safety, it can be foreseen that the scale of installed energy storage capacity will rapidly increase. The importance of energy storage fire protection under the new standards is continuously highlighted, and the proportion of investment in energy storage fire protection is expected to further increase. The energy storage fire protection industry may usher in a long and prosperous period.
Bluebird Fire Protection: A leader in the fire safety industry, providing one-stop energy storage fire protection solutions
Company Introduction: Our company is one of the largest and most comprehensive fire protection product suppliers in China, boasting the strongest technical capabilities. We are also a leading comprehensive supplier specializing in the manufacturing of professional fire safety electronic products and intelligent fire safety system services. With a robust "one-stop" supply capability, our company stands out with its rich product line compared to many single-product enterprises in the industry. Currently, we have established a "3+2+2" business framework, consisting of three core businesses centered around general fire alarm systems (including overseas), emergency lighting and intelligent evacuation, and industrial fire protection, as well as two emerging businesses focusing on gas-based automatic fire suppression and gas detection, and smart fire protection and household fire protection. In the future, we plan to expand into related fields such as security and the Internet of Things, aiming to achieve our global goal of "fire safety + IoT".
Guoanda: A leading player in industrial fire protection, with energy storage fire protection expected to open up a second growth pole
Company Introduction: The company specializes in the research, development, production, and sales of automatic fire extinguishing devices and systems. Since its establishment, it has been committed to the research and application development of early fire detection and warning, automatic fire extinguishing technology, etc. Its products are widely applied in fire safety protection in special fields such as new energy vehicles, power grids, energy storage power stations, new energy wind power generation, photovoltaic power generation, charging stations, charging piles, urban public safety, and underground utility tunnels. After years of development, the company has achieved a certain market scale and leading technological advantages in the automatic fire extinguishing product market.