The Energy Storage Report 2024

Now available to download, covering deployments, technology, policy and finance in the energy storage market

US gigafactory plans growing twice as fast as Europe’s since Inflation Reduction Act

LinkedIn
Twitter
Reddit
Facebook
Email

Planned lithium-ion battery gigafactory capacity in the US has grown twice as fast as in Europe since the Inflation Reduction Act was passed, Benchmark Minerals Intelligence told Energy-Storage.news.

As Energy-Storage.news reported at the start of the year, Europe’s push to onshore lithium-ion battery production was much further ahead of the US’. Both regions are seeking to reduce reliance on China, which dominates the space today.

This article requires Premium SubscriptionBasic (FREE) Subscription

Enjoy 12 months of exclusive analysis

  • Regular insight and analysis of the industry’s biggest developments
  • In-depth interviews with the industry’s leading figures
  • Annual digital subscription to the PV Tech Power journal
  • Discounts on Solar Media’s portfolio of events, in-person and virtual

Or continue reading this article for free

But since then, a double-whammy of high power prices in Europe and the Inflation Reduction Act’s (IRA) tax credits for EV battery purchases with US-manufactured batteries, domestic battery module and pack production and standalone battery energy storage system deployments have changed the picture.

Evan Hartley, analyst for Benchmark Mineral Intelligence working on its Gigafactory data, said that since the Act was passed, there has been a 35% increase in announced capacity in the US compared to a year ago, versus a 17% increase in Europe. That doesn’t mean it’s caught up yet, however.

“Looking at 2022 as a whole the two markets are roughly on par in terms of growth and Europe is still around 200GWh ahead in terms of expected 2031 capacity,” Hartley said.

Benchmark currently pegs Europe’s 2031 planned annual production capacity at 1,186.2GWh versus 992.6GWh/957.6GWh for North America/US. Europe’s growth rate has been steady over 2022 while the US’ has shot upwards since the Act was passed having seen minimal growth in the first half of the year.

Numerous EV-focused projects have been expanded or accelerated while Turkish firm Kontrolmatik has increased its planned US gigafactory size and Norway-based FREYR is accelerating its plans, both of whom are energy storage market-focused.

That is in contrast to reports of delays to projects in Europe, including amongst some of the bigger names, but it’s too early to speculate that the US is actually taking capacity away from Europe, Hartley added.

“We’re not immediately seeing producers shifting plans from Europe to the US. The producers announcing new capacity in the US primarily had significant existing plans there, they’re just increasing them in light of the IRA.”

“One thing to note is the IRA disfavours Chinese companies, and most of the companies we’ve seen announce new capacity in Europe since it passed are Chinese. Many of the producers taking advantage of the IRA with new US-based plans are South Korean and Japanese.”

The extent of state support contained within the IRA has reportedly irked European policymakers. Numerous media reports this week have quoted the chair of EU parliament’s trade committee Bernd Lange as saying it should file a complaint with the World Trade Organization (WTO) on the basis that the IRA is incompatible with its rules.

Lithium-ion battery packs from the US and Europe are currently 24% and 33% more expensive than in China, where the average price sits at US$127/kWh according to BloombergNEF’s annual battery price survey, covered in a separate piece by Energy-Storage.news today.

Energy-Storage.news’ publisher Solar Media will host the eighth annual Energy Storage Summit EU in London, 22-23 February 2023. This year it is moving to a larger venue, bringing together Europe’s leading investors, policymakers, developers, utilities, energy buyers and service providers all in one place. Visit the official site for more info.

A month later, Solar Media will put on the 5th Energy Storage Summit USA, 28-29 March 2023 in Austin, Texas. Featuring a packed programme of panels, presentations and fireside chats from industry leaders focusing on accelerating the market for energy storage across the country. For more information, go to the website.

26 March 2024
10am EDT / 3pm CET
ATS Industrial Automation has delivered over 110 EV battery assembly and test lines and is leveraging this experience to help companies design and scale grid battery manufacturing. In this Webinar, we explore the lifecycle of a BESS company from ideation to gigafactory. We will examine the six stages, from idea and design viability to creating samples, developing a pilot line, demonstrating manufacturability, and full production. We will discuss the challenges at each stage, equipment investments, product stability requirements, and investor and customer expectations. Hear how companies have navigated each stage and successfully transitioned to gigafactory.
22 October 2024
New York, USA
Returning for its 11th edition, Solar and Storage Finance USA Summit remains the annual event where decision-makers at the forefront of solar and storage projects across the United States and capital converge. Featuring the most active solar and storage transactors, join us for a packed two-days of deal-making, learning and networking.

Read Next

March 18, 2024
Two years of volatility in the lithium-ion battery storage industry have seen prices tumble and a host of supply-chain complexities come to the fore.
March 14, 2024
Sodium-ion battery technology could be the “perfect solution for applications where energy density is not paramount,” according to the chief executive of battery tech company BMZ Group.
Premium
March 14, 2024
The COO of one of the few energy-storage focused lithium-ion gigafactory companies in Europe, Morrow Batteries, talked to Energy-Storage.news about the firm’s go-to-market strategy and what the future holds for Europe’s gigafactory space.
March 13, 2024
Europe’s response to the US’ Inflation Reduction Act (IRA) has been a big talking point at Giga Europe, and one panellist said the simplicity of the IRA has been key to its success.
March 13, 2024
ib vogt has sold rights to a large-scale 1-hour duration battery storage project in Finland, Europe, to investor Renewable Power Capital (RPC).

Most Popular

Email Newsletter