Bloomberg New Energy Finance predicts that annual demand for lithium-ion batteries will surpass 2.7 terawatt-hours (TWh) by 2030. 800 Gigawatts of battery storage at current prices is about $1.5 trillion. Prices will be high for the next two to three years but should fall afterwards to about half the price or about $600-700 billion for 2.7 terawatt hours per year.
BloombergNEF analysts predicted in November that globally there will be US$262 billion worth in investment in making 345GW of new energy storage by 2030. 55% of energy storage projects built by 2030 will predominantly be performing energy shifting. This would be like moving solar generated from 10am to 5pm to 6pm to 11pm.
China and the US are forecast to represent over half of battery storage projects by 2030. By the end of 2020, China had nearly 3.3GW of battery
storage, up 91.2% from 2019.
Each megawatt of energy storage is now priced at about $2 million and handles 3 MWh of storage.
In 2020, the cumulative installed capacity of China’s energy storage was 35.6 GW (including pumped-hydro), accounting for 18.6% of the
global market, with an increase of 4.9% over the same period in 2019.
In Australia, renewable energy sources supply about 27% of Australia’s electricity generation, and at times up to 52%. Such rapid penetration of renewables is already posing significant challenges to grid stability with utility-scale energy storage become increasingly important.
The recently Australian draft Integrated System Plan (ISP) highlights opportunities for energy storage in Australia. Some key opportunities identified include the following:
• The need to treble the firming capacity that can respond to a dispatch signal, including utility-scale batteries, hydro storage, gas generation, and smart behind-the-meter batteries or virtual power plants (VPPs).
• By 2032, over half of the homes attached to the NEM will have rooftop solar, rising to 65% by 2050 with most systems complemented by energy storage. The associated 69GW of capacity and 90TWh of electricity will represent one fifth of the NEM’s total underlying demand.
• By 2050, a NEM without coal will require 45GW/620GWh of storage (in all forms, including batteries, hydropower, VPPs, viable alternative energy storage, vehicle-to-grid, etc.)
Tesla Powerwall, Powerpack and Megapack will be most likely equipped with iron LFP batteries, especially the 3 MWh Megapack units. There is also an option for a manganese-based version for future Tesla energy storage products.
Iron-based chemistries to solve some of the cost-issues of flow-batteries could improve their economic feasibility sufficiently to compete with lithium-ion for just under half of the stationary storage market by 2030.
In April 2002, California’s PGE PG&E started the Moss Landing storage system. It (256 Tesla Megapack battery units on 33 concrete slabs) has the capacity to store and dispatch up to 730 megawatt-hours of energy to the electrical grid at a maximum rate of 182.5 megawatts per hour during periods of high demand. PG&E now has contracts for battery energy storage systems totaling more than 3,330 MW of capacity being deployed throughout California through 2024. 1,400-plus MW of storage capacity (of the 3,330 MW under contract) will come online in 2022 and 2023.
Global manufacturing capacity of lithium-ion batteries has expanded from 14GWh in 2010 to 457GWh in 2020. Asia Pacific accounted for 81% of global capacity in 2020 (with an immense 73% of global capacity manufactured in China). Chinese manufacturers are also leading on the generally more favorable LFP chemistries for energy storage, providing further advantages. The largest manufacturers of lithium-ion batteries outside China are in South Korea, Japan and the US. Global lithium-ion battery manufacturing capacity is expected to double in the next two years and exceed 2,000GWh in 2028 with Chinese capacity remaining dominant.
The Energy Information Agency reported 5.1 gigawatts (GW) of utility-scale energy storage capacity was planned for the U.S. in 2022. However, supply chain problems could delay or cancel some of those projects.
The price of lithium-carbonate has increased 500 percent in the last 12 months. Bloomberg New Energy Finance calculates that each 20 percent increase in the price of lithium-carbonate results in a three percent increase in the total cost of battery modules. Mines simply cannot keep pace with market growth, and industry insiders estimate a two-to-three-year dislocation on lithium.
Most battery manufacturing takes place in China, so energy storage project costs are also affected by the global shipping crisis.
In September 2021, it cost over $20,000 to ship a container from China to the United States West Coast, in June 2022 the prices is half that at $9,500. This rate is still
Utilities will initially buildout batteries to help handle the four hour peak in energy demand between 4pm and 9pm. Solar will generate during the day and extra power will be stored in batteries for use when demand increases by about 40% in the evening. This will reduce the need to build natural gas peaker plants or overbuilding on other powerplants.
Later, if solar and batteries will combine to replace baseload power there will need to be 30-50 hours of storage for each gigawatt of solar. This will vary by location but in Texas it would be 49 hours of storage. 49 Gigawatt hours of storage for each gigawatt of solar power.
This large scale replacement would be economically justified if solar power and storage batteries both dropping about 80% in price.
SOURCES – Battery Storage – a global enabler of the Energy Transition Baker McKenzie, Utility Dive, Tesla, PGE
Written by Brian Wang, Nextbigfuture.com
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
Known for identifying cutting edge technologies, he is currently a Co-Founder of a startup and fundraiser for high potential early-stage companies. He is the Head of Research for Allocations for deep technology investments and an Angel Investor at Space Angels.
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