The Asia-Pacific region will continue to be the world’s leading centre of lithium-ion cell manufacturing for the next decade, but it won’t just be price reductions in batteries that will drive a 30% drop in front-of-meter battery storage in key markets China, Australia and South Korea.
The value of energy storage increases with growing shares of renewable energy on the grid, but the availability and cost of storage will determine how successful decarbonisation with renewables can be.
While lithium-ion enjoys the most media and customer interest at the moment, alternative technologies for storing energy could become competitive – if investors are willing to take them on to the extent that manufacturing efforts can be greatly scaled up.
The global energy storage market will grow to a cumulative 942GW/2,857GWh capacity by 2040, attracting US$620 billion in investment, caused by sharply decreasing battery costs, according to a Bloomberg NEF (BNEF) report.
While decreases in costs continue to make energy storage more and more competitive, financial advisory and asset management firm Lazard has highlighted just how variable project economics can be, citing examples of US projects with 9%, 11% and 21% IRR (internal rate of return).
