Falling battery costs are set to drive a surge in the installation of energy storage systems worldwide from 2018 until 2040, according to the latest annual forecast by Bloomberg New Energy Finance (BNEF).
According to the latest Long-Term Energy Storage Outlook report, the global energy storage market could grow to a cumulative 942 GW, or 2,857 GWh, by 2040, attracting $1.2tn in investment over the next 22 years.
The costs for a typical utility-scale lithium-ion battery storage system will also drop by another 52% between 2018 and 2030, predicts the report, on top of the steep declines seen earlier this decade. This will also pose a major economic opportunity for the vehicle and electricity sector.
The future is also buoyant for behind-the-meter (BTM) energy storage technologies, with installations set to be located in business and industrial premises, alongside millions of residential properties. BTM can perform a range of functions, including shifting grid demand to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and ‘earning fees’ for helping to smooth voltage on the grid.
Aggregating BTM storage could also be a viable alternative to utility-scale battery storage for many applications, adds the report, however, it could take many years before regulatory frameworks in some countries will allow this. BTM storage will also increasingly be used to provide system services on top of customer applications.
Looking to world markets, the top countries for energy storage installations are predicted to be China, the US, Japan, Germany, France, Australia, South Korea and the UK – which collectively could account for two-thirds of the installed global capacity by 2040. South Korea will dominate the market, with the US is primed to take over in the early 2020s, before being overtaken by China, which will then lead throughout to 2040.
Developing countries in Africa will also experience rapid growth in battery storage, adds the report, as utility companies increasingly recognise the cost benefits of siting isolated assets combining solar, diesel and batteries in ‘far flung’ sites, as opposed to an extension of the main grid or a fossil-only generator.
Also detailed in the report is the significant opportunity energy storage offers to provide flexibility – to help balance variable supply and demand – and its potential as an attractive alternative to new-build generation or network reinforcement.
Despite its rapid growth from today’s level, demand for stationary storage will make up only 7% of total battery demand in 2040, highlights the report. This will be dwarfed by the electric vehicle market, which will impact resource demand and supply/demand balance for metals including lithium and cobalt.
Speaking of the report, Yayoi Sekine, Energy Storage Analyst for BNEF, said: ‘We have become much more bullish about storage deployments since our last forecast a year ago.’
She added: ‘This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology – electric vehicle charging, and energy access in remote regions.’
News Item details
- Journal title: Energy World