The market for energy storage is rapidly gaining momentum around the world. The growing cost-competitiveness of carbon-free energy sources, coupled with improving technology and more environmentally conscious government policies are driving a demand boom for batteries in both the transportation and utility power sectors. But just how big is this boom expected to be?
Bloomberg New Energy Finance (BNEF) predicts that the global energy storage market will grow to a cumulative 942GW by 2040, attracting a whopping $620 billion in investments. This makes sense, given that combined wind and solar power generation capacity is expected to eclipse that of natural gas shortly after 2040 – at least according to the International Renewable Energy Agency (IRENA). And those renewable energy stations, which produce power intermittently (the sun is not always shining and the wind is not always blowing), will require adequate storage to make them economically viable.
That’s to say nothing of battery-powered electric vehicles (EVs), where the global fleet has been expanding at a compounded annual growth rate (CAGR) of 52% over the past 5 years. That rate is expected to level off to about 25% between now and 2025. There are currently 3 million EVs on the road today, and an estimated 1.2 million of them were sold in 2017. That’s around 1.5% of all car sales last year.
Fall in costs of lithium-ion (LI) batteries are a key driver of increasing demands for battery storage. Lithium-ion is the leading battery storage technology to date, though alternatives are beginning to crop up. The price of LI batteries fell 80% between 2010 and 2017 ($/kWh) with costs projected to fall another 52% between 2018 and 2030. Head of Energy Storage at BNEF expects to see ‘energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040.’ Nothing to sneeze at considering all (non-hydro) renewable power accounted for 8% of worldwide electricity production in 2017.