We are reading more and more about how energy storage is making great strides forward. Fereidoon Sioshansi writes on the CleanTechnica website about how energy storage is becoming the next game changer.
Energy Storage: Next Game Changer
Everybody agrees that storage is turning into big business, and soon, but exactly how big and how soon? According to a report released in Nov 2018 by Bloomberg New Energy Finance (BNEF) the global energy-storage market will surge to a cumulative 942 GW by 2040 requiring a hefty investment of $620 billion. Sharply falling battery costs is a key driver of the projected boom, as is the pressing need to smooth out the output of renewable generation. BNEF says the capital cost of utility-scale lithium-ion storage systems is likely to fall another 52% by 2030.
But like much else in electricity markets these days, cost isn’t the only or even the main driver of future demand growth – it is the mandatory rise of renewables. Governments the world over are requiring ever higher percentages of renewables while pushing for more electric vehicles (EVs) and solar PVs.
According to BNEF’s Yayoi Sekine, “Costs have come down faster than we expected. … Batteries are going to permeate our lives.”
The implications of cheaper batteries are far-reaching, upending multiple industries and helping spur technologies necessary to help fight climate change. Batteries will power the EVs while also boosting the value of solar and wind power, both inherently variable resources.
BNEF highlights two important storage markets:
- China, which is investing in massive battery manufacturing capacity; and
- California, which has a mandatory 100% renewable electricity target for 2045 as well as a number of other measures such as storage capacity.
In places like California and Hawaii, both moving towards a 100% renewable future by 2045, massive new storage capacity will undoubtedly be required along with other means of shifting midday’s sun to evening hours or for cloudy days. Wind, the other major renewable contender, is equally variable.
Among other highlights, BNEF says:
- Cumulative energy-storage deployments are forecast to exceed 50 GWh by 2020, a significant acceleration from last year’s projection;
- By 2040, storage capacity may reach 7% of the world’s installed capacity;
- The Asia-Pacific region will be home to 45% of total installations on a MW basis by 2040 with another 29% spread across Europe, Middle East and Africa with the remainder in the Americas;
- The majority of storage capacity will be utility-scale until the mid-2030s with behind-the-meter applications at businesses, industrial sites and residential sector overtaking utility-scale thereafter; and
- Leading the pack will be China, US, India, Japan, Germany, France, Australia, South Korea, and the UK. South Korea, currently a dominant market player, will be overtaken by the US early in the 2020s – both to be eclipsed by China.
Storage is likely to penetrate the African market as everyone recognizes that the combination of solar PVs, diesel, and batteries in remote sites is cheaper than extending the power grid or building a fossil-only generator.