The organisation’s 2021 edition of the Global Energy Storage Outlook, published this week, forecasts that the global market for grid-scale and smaller batteries – excluding those in electric vehicles (EVs) – will attract at least $262bn of capital investment by the end of the decade.
This level of finance could support the addition of up to 999 GWh of capacity by the end of 2030. BNEF estimates that global capacity in 2020 stood at 29 GWh.
More than half of the new capacity additions would be based in the US and China, which are likely to lead on grid-scale arrays, BNEF Is forecasting. In the US, it cites the primary driver as the emissions and renewables targets of states and utilities. The Outlook was notably composed before Special Presidential Envoy for Climate John Kerry confirmed plans to end unabated fossil-fuel-fired electricity generation by 2035. In China, the national government already has a target to host 30GW of batteries by 2025 and renewable generation developers face strict requirements about funding storage.
BNEF is also predicting that the UK, Germany, Australia, India and Japan will be major energy storage markets by the end of the decade, perhaps even outpacing the US and China in terms of smaller-scale batteries at residential and commercial properties.
More than half (55%) of the new energy storage capacity forecast by BNEF would be developed specifically to help shift away from fossil fuels and to renewables, the Outlook states.
“This is the energy storage decade – we’ve been anticipating significant scale-up for many years and the industry is now more than ready to deliver,” said BNEF’s head of decentralised energy Yayoi Sekine.
BNEF notably forecast only a six-fold increase in the global energy storage market by 2030 back in 2017. It has stated that changes to climate and energy policies, plus targeted incentives, in markets in the Asia-Pacific region and North America in particular, have been compounded by falling technology costs, enabling a more bullish forecast.
To this latter point, a BNEF paper from 2019 revealed that battery prices have fallen 87% in real terms over the past decade, from $1,100 per kWh in 2010 to $156 per kWh.
Technology mix
The battery outlook takes into account a range of battery chemistries, including lithium-ion, nickel-manganese-cobalt, sodium-ion and lithium-iron-phosphate.
Lithium-ion-phosphate is forecast to be the most popular option through to at least 2030.
BNEF also predicts that batteries will dominate the overall storage market until at least 2030, despite the rapid emergence of non-battery options like compressed air storage and thermal storage.
“If new technologies successfully outcompete lithium-ion, then total uptake may well be larger” in the long-term, the Outlook adds.
At COP26 in Glasgow this month, 25 organisations co-launched a new collaboration on long-duration energy storage technologies called the Long Duration Energy Storage Council. The Council is aiming to mobilise $3trn of investment within the sector by 2040, which could support 1.5TW to 2.5TW of installation within this timeframe. Council members include BP, Siemens Energy and Bill Gates’ Breakthrough Energy Ventures.
Sarah George