The energy storage decade has arrived, says BNEF


From pv magazine USA

Energy storage installations throughout the world are forecast to reach 358 GW/1,028 GWh by the end of 2030, more than 20 times greater than the 17 GW/34 GWh online at the end of 2020, according to the latest forecast from BloombergNEF (BNEF).

This projected growth in stationary energy storage will require more than $262 billion of investment, BNEF said in its 2021 Global Energy Storage Outlook.

“This is the energy storage decade. We’ve been anticipating significant scale-up for many years and the industry is now more than ready to deliver,” said Yayoi Sekine, the company's head of decentralized energy.

Growth markets

The outlook estimated that 345 GW/999 GWh of new energy storage capacity will be added globally between 2021 and 2030. The United States and China are expected to be the two largest markets, representing more than half of the global storage installations by 2030. Clean power ambitions of state governments and utilities propel storage deployment in the United States, the outlook said. In China, the installation target of 30 GW of cumulative build by 2025 and stricter renewable integration rules boost expected storage installations.

Other top markets according to BNEF include India, Australia, Germany, the United Kingdom, and Japan. Supportive policies, ambitious climate commitments, and the growing need for flexible resources are common drivers. The forecast said that although Asia-Pacific will lead the storage build on a megawatt basis by 2030, the Americas will build more on a megawatt-hour basis. BNEF said that is because storage plants in the United States usually have more hours of storage.

Europe, Middle East and Africa currently lags behind its counterparts due to a lack of targeted storage policies and incentives. Growth in the region could accelerate, however, as renewables penetration surges, more fossil-fuel generators close, and the battery supply chain becomes more localized.

Flexible resource

BNEF said that falling battery costs and “surging” renewables penetration make energy storage a “compelling flexible resource in many power systems.” Energy storage projects are growing in scale, increasing in dispatch duration, and are increasingly paired with renewables, it said.

BNEF’s forecast suggests that 55% of energy storage build by 2030 will be to provide energy shifting. Co-located renewable-plus-storage projects, solar+storage in particular, are becoming commonplace globally.

Customer-sited batteries, both residential and commercial and industrial ones, will also grow at a steady pace, BNEF said. Germany and Japan are currently leading markets, with sizeable markets in Australia and California.

BNEF said it expects energy storage located at homes and businesses to make up about one quarter of global storage installations by 2030. The desire of electricity consumers to use more self-generated solar power and appetite for back-up power are major drivers.

Other applications, such as using energy storage to defer grid investment, may remain marginal in most markets to 2030. Build could pick up, the outlook said, if regulatory barriers are removed and incentives are aligned for network owners to consider storage as an alternative to traditional infrastructure investment.

Battery chemistries

Rapidly evolving battery technology is driving the energy storage market. The report found that the industry is adopting multiple lithium-ion battery chemistries. It said that in 2021, lithium-iron phosphate (LFP) will be used more than nickel-manganese-cobalt (NMC) chemistries for stationary storage for the first time.

LFP is poised to become the major lithium-ion battery chemistry choice in the energy storage sector until at least 2030, driven by its dominant role in China and increasing penetration in the rest of the world. BNEF also updated its technology outlook to include sodium-ion batteries, a lithium-ion battery contender, which it said could play a “meaningful role” by 2030.

Besides batteries, many non-battery technologies are under development, such as compressed air and thermal energy storage. The report said that many of these can provide longer dispatch duration compared to batteries, looking to supply during prolonged periods of low renewable energy generation in future net-zero power systems.

However, BNEF said it expects batteries to dominate the market at least until the 2030s, in large part due to their price competitiveness, established supply chain, and track record. If new technologies successfully outcompete lithium-ion, then total uptake may well be larger.

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