This story and title have been updated after Bloomberg New Energy Finance informed me they had made a “totalling error” in their original press release. Instead of inevstment worth $1.2 trillion, the figure is in fact $620 billion.
Two reports released within days of one another have highlighted the increasing value of the energy storage market as a necessary tandem to a low-carbon society, with Bloomberg New Energy Finance predicting the market will grow to attract $620 billion in investment and boast 942 gigawatts (GW) by 2040, while in the UK the current pipeline already sits at an impressive 6,874 megawatts (MW).
It is of little surprise that the energy storage market around the globe has expanded so quickly, given the explosive growth of intermittent renewable energy sources like solar and wind. Simply put, energy storage evens out what is otherwise intermittent electricity generation, meaning that solar can continue to provide electricity at night and wind can continue to provide electricity when the winds are still.
This is vitally apparent in the United Kingdom which, according to a report published by renewable energy trade body RenewableUK and the country’s Solar Trade Association, has all but exploded in size over the past seven years. Specifically, the report shows that planning applications in the UK have soared from 2 MW in 2012 to 6,874 MW in 2018.
The news of the UK’s 6.9 GW energy storage pipeline was part of an announcement which will see RenewableUK launch a new database of energy storage projects across the UK, with comprehensive information on nearly 400 UK projects. The database reveals that the average capacity of applications for new battery storage projects in the UK has increased from 10 MW in 2016 to 27 MW in 2018.
Currently, the UK boasts 3.3 GW of storage capacity and there is a further 5.4 GW that have already received planning consent — including 4.8 GW worth of battery storage.
“The energy sector is breaking new ground by making an unprecedented transition to a clean, flexible system which will power our country in the future,” said RenewableUK’s Executive Director Emma Pinchbeck. “Energy storage is already playing a key part in that, from small local projects to grid-scale schemes. We’re decentralising the way the power system works and, at our conference, we’ll hear how an increased share of wind, solar and storage on the grid could transform UK energy markets.”
“Energy storage has already begun to unlock the full potential of wind and solar energy, and it’s happening faster than almost anyone anticipated,” added Chris Hewett, Chief Executive of the Solar Trade Association. “It’s clear that storage will be the foundation of a smart, flexible and decarbonised future energy system, and this conference is an excellent opportunity to hear straight from the experts and business leaders who are working to make that future a reality.”
This was followed a day later by the latest annual energy storage forecasts from research company Bloomberg New Energy Finance (BNEF), which pointed to the “tumbling cost of batteries” as a driving force behind the explosion in energy storage installations around the world. Specifically, BNEF predicts that the global energy storage market (excluding pumped hydro) will grow to a cumulative 942 GW with 2,857 GWh by 2040, attracting $620 billion in investment over the same time.
Further, BNEF’s new report, Long-Term Energy Storage Outlook, predicts that the capital cost of a utility-scale lithium-ion (Li-ion) battery storage system will fall another 52% over the next 12 years, on top of price cuts already seen over the last decade.
“We have become much more bullish about storage deployments since our last forecast a year ago,” said Yayoi Sekine, energy storage analyst for BloombergNEF and co-author of the report. “This is partly 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.”
“We see energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040,” added Logan Goldie-Scot, head of energy storage at BNEF. “The majority of storage capacity will be utility-scale until the mid-2030s, when behind the meter applications overtake.”
Unsurprisingly, China will be the leading energy storage market, followed by the US, India, Japan, Germany, France, Australia, South Korea, and the UK, and together they will account for two-thirds of 2040’s installed capacity. However, it is South Korea which will dominate in the near-term, before the US will succeed them in the early 2020s, before they will then give way to China who will maintain its lead through to 2040.
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