Tumbling battery prices are set to drive a boom in the installation of energy storage systems around the world in the years from now to 2040, says Bloomberg New Energy Finance. As a result, the team of new energy experts have re-evaluated global deployment of *behind-the-meter and grid-scale batteries over the next decades, predicting growth in the global energy storage market to reach a cumulative 942GW/2, 857GWh by 2040 with an anticipated investment of $620 billion.
According to BNEF’s latest Long-Term Energy Storage Outlook, the next 22 years will see the capital cost of a utility-scale lithium-ion battery storage system will slide another 52% in addition to the steep declines already seen earlier this decade, further supporting the economic case for batteries – both for the vehicle and electricity sectors.
Energy storage analyst for BNEF, Yayoi Sekine and co-author of the report accounts for the revised bullish positioning regarding storage deployments 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.”
Logan Goldie-Scot, head of energy storage at BNEF reinforces this stance, seeing the growth in energy storage to 7% of the total installed global power capacity in 2040 and that “the majority of storage capacity will be utility-scale until the mid-2030s, when behind-the-meter applications overtake.”
Businesses, industrial premises and millions of residential properties will have behind-the-meter or BTM installations, performing a variety of tasks, which BNEF says will include “shifting grid demand in order 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.”
Top leaders in the field will be China, the U.S., India, Japan, Germany, France, Australia, South Korea and the U.K. who will represent two thirds of the installed capacity by 2040. BNEF notes that while South Korea will dominate the market in the near-term, the east Asian country will be overtaken by power demand in the U.S. in the early 2020s, followed by China who will lead from the 2020s to 2040.
Rapid growth in battery storage will be particularly evident in developing countries in Africa where utilities are likely to “recognize increasingly that isolated assets combining solar, diesel and batteries are cheaper in far flung sites than either an extension of the main grid or a fossil-only generator,” the report says.
Systems will be used in complex ways as flexible solutions to energy storage, helping to balance variable supply and demand as a viable alternative to new-build generation or network reinforcement. In addition to customer applications BTM storage with also be used to provide system services.
BNEF predicts that despite this rapid growth from today’s levels, demand for batteries for stationary storage will make up only 7% of total battery demand in 2040. The clean energy analysts say that this demand will be “dwarfed by the electrical vehicle market, which will more materially impact the supply-demand balance and prices for metals such as lithium and cobalt.”
*Behind the meter ( BTM ) is a renewable energy system uniquely designed and built for a single building or facility. Its purposes are : to reduce the carbon footprint of the building by generating electricity ‘locally’ from renewable sources.
