5G Base Station Construction Spurs Demand for LiFePO4 Batteries

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The commercialization of 5G applications is rapidly approaching, and the construction of 5G base stations is set to drive demand for LiFePO4 batteries to unprecedented levels, exceeding 155GWh. As the entire industry chain actively aligns with new technical standards, it's clear that 5G is the future of communication.

Recent data reveals a significant annual increase of over 10% in domestic network operation and support costs over the past three years, with energy consumption accounting for approximately 12% of these costs. With such a substantial rise in operation and maintenance expenses, the government is emphasizing the reduction of tariffs, making operation and maintenance cost reduction a focal point.

In 2018, China Tower made a decisive move by discontinuing the purchase of lead-acid batteries and adopting a unified procurement process for used batteries. As the pace of 5G base station construction quickens, the demand for energy storage LiFePO4 batteries is poised for remarkable growth.

According to the plan, China Telecom and China Unicom are set to have more than twice the number of 5G base stations compared to their current 4G base station count, while China Mobile will have over four times the current number. Based on the 2018 annual reports of each operator, China is looking at the construction or modification of at least 14.38 million base stations.

Additionally, due to the substantial increase in energy consumption of 5G base stations, it is estimated that 14.38 million backup energy systems will require upgrades. With a single 5G C-band base station consuming 2700W and an emergency duration of 4 hours, the market will necessitate at least 155GWh of battery storage capacity. Typically, macro base stations reserve 3-4 hours of storage power at a voltage of 48V to ensure the stable operation of 5G communication equipment. This massive construction drive will directly fuel the demand for energy storage batteries.

Compared to lead-acid batteries, the advantages of LiFePO4 battery storage in 5G communication base stations are clear and promising. LiFePO4 batteries offer longer service life, superior performance, and are free from heavy metal lead. While the initial price of LiFePO4 batteries may be higher than lead-acid counterparts, their charge-discharge cycles, extended lifespan, and weight-to-volume advantages compensate for the initial cost, resulting in better overall cost-effectiveness.

In 2018, our company took a significant step by ceasing the purchase of lead-acid battery base station power supplies and shifting towards lithium batteries. As per the Iron Tower Company's plan, we will continue to expand the use of lithium batteries in 2019, with expectations to replace 150,000 tons of lead batteries and more than 50,000 tons of decommissioned power batteries. Although the base station power supply sector traditionally relied on lead storage batteries, national policies are driving a shift towards lithium battery secondary utilization. While the base station power data is expected to surge with 5G investments, the statistics may not distinguish between lead and lithium batteries. It's anticipated that, as LiFePO4 batteries expand and environmentally friendly battery disposal becomes a priority, the use of lead storage batteries at base stations will continue to diminish.

In summary, as large-scale lithium-ion battery decommissioning and experience accumulation progress, lithium batteries are expected to fully replace lead batteries in low-performance requirement areas such as base station and backup power supply. The advent of 5G communication base stations will undoubtedly propel the growth of the LiFePO4 battery energy storage industry!