BNEF: Battery prices have plummeted 87% since 2010

The global market for battery energy storage - from car-sized units to utility-scale arrays - has grown rapidly in 2019 amid falling costs, new research from Bloomberg NEF (BNEF) has found.

BNEF: Battery prices have plummeted 87% since 2010

BNEF's analysis covers battery packs from the vehicle size (pictured) to utility-scale arrays. Image: Akio Kon/Bloomberg

Published on Tuesday (3 December), the firm’s latest analysis of the global battery sector concludes that battery prices have fallen 87% in real terms over the past decade, from $1,100 per kWh in 2010 to $156 per kWh this year.

BNEF notes in the research paper, entitled the 2019 Battery Price Survey, that more rapid cost reductions in real terms have occurred in 2018-2019 than any year prior. The research firm puts this trend down to increasing order sizes, largely by companies across the transport, utility and built environment sector.

BNEF’s analysis shows that this order upscaling is particularly prevalent in the automotive sector, as electric vehicle (EV) ownership becomes increasingly common in markets such as China and as some of the world’s largest carmakers bolster pledges to electrify their portfolios.

With these trends in mind, BNEF is forecasting that battery prices will fall below $100 per kWh in real terms by 2024 – the date by which it believes cumulative global demand will surpass 2TWh.

As well as increasing benefits of scale, BNEF believes that the next three years will see battery manufacturing costs falling as packs are redesigned and supply chains are optimised. But it is forecasting more stark cost reductions in Asian markets than for the UK and mainland Europe.

“Factory costs are falling thanks to improvements in manufacturing equipment and increased energy density at the cathode and cell level,” BNEF’s head of energy storage Logan Goldie-Scot said.  “The expansion of existing facilities also offers companies a lower-cost route to expand capacity.”

On a longer-term basis, the BNEF report states that the global battery market will be worth $116bn (£89bn) annually by 2030. This figure does not account for investment in the supply chain by corporates of governments.

The domestic picture

In related news, research into the role which battery storage can play in the UK’s transition to net-zero by 2050 has been published today (4 December) by Imperial College London.

Commissioned by Drax, the paper concluded that Britain will need to play host to at least 30GW of energy storage by mid-century to meet its long-term climate targets. At present, just 3GW of capacity is installed.

In the Committee on Climate Change’s (CCC) advice to Government on meeting net-zero by 2050, the body states that the UK’s electricity mix must be at least 60% renewable.

The good news is that the cumulative capacity of planning applications for battery storage projects has increased by more than 50% over the past year, according to RenewableUK. The body recorded nearly 6,900MW of cumulative capacity in winter 2018, rising to 10,500MW this month, and is predicting further pipeline growth as planning policies are reformed.

edie’s business guide to energy storage

Companies and organisations looking to capitalise on the benefits of energy storage now have access to a new edie business guide which breaks down everything you need to know about the technology.

Produced in association with EDF Energy, this seven-page guide is ideal for any individual or organisation looking to capitalise on the business benefits offered up by energy storage. Download the guide for free here. 

Sarah George

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