EXPRESS #2 - November 13, 2018
Energy storage boom is coming, Finland to coordinate battery recycling research
The tumbling cost of batteries is set to drive a boom in the installation of energy storage systems around the world in the years from now to 2040, according to the latest annual forecast from research company Bloomberg New Energy Finance (BNEF).
The global energy storage market (excluding pumped hydro) will grow to a cumulative 942GW, 857GWh by 2040, attracting $1.2 trillion in investment over the next 22 years, predicts BNEF.
“Cheap batteries mean that wind and solar will increasingly be able to run when the wind isn’t blowing and the sun isn’t shining.”
BNEF’s latest Long-Term Energy Storage Outlook sees the capital cost of a utility-scale lithium-ion battery storage system sliding another 52% between 2018 and 2030, on top of the steep declines seen earlier this decade. “This will transform the economic case for batteries in both the vehicle and the electricity sector.”
Yayoi Sekine, energy storage analyst for BNEF and co-author of the report, said: “We have become much more bullish about storage deployments since our last forecast a year ago. 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.”
Logan Goldie-Scot, head of energy storage at BNEF, added: “We see energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040. The majority of storage capacity will be utility-scale until the mid-2030s, when behind the meter applications overtake.”
Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties, according to BNEF. “For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.”
China, the U.S., India, Japan, Germany, France, Australia, South Korea and the U.K will be the leading countries. These nine markets will represent two thirds of the installed capacity by 2040. In the near-term, South Korea will dominate the market, the U.S. will take over in the early 2020s, but will be overtaken by China in the 2020s. China will then lead throughout to 2040.
Especially developing countries in Africa will also see rapid growth in battery storage. Utilities are likely to “recognize increasingly that isolated assets combining solar, diesel and batteries are cheaper in far flung sites than either an extension of the main grid or a fossil-only generator,” the report says.
BNEF analysis “estimates energy storage build across multiple applications to meet variable supply and demand and to operate the grid more efficiently, while taking into account customer-sited economics for using storage as well as system-level needs. Aggregating BTM energy storage could be a viable alternative to utility-scale for many applications but it will take years before regulatory frameworks in some countries fully allow this.”
“There is significant opportunity for energy storage to provide flexibility – to help balance variable supply and demand – and systems will undoubtedly be used in complex ways. Energy storage will become a practical alternative to new-build generation or network reinforcement. Behind-the-meter storage will also increasingly be used to provide system services on top of customer applications.”
Despite the rapid growth from today’s levels, demand for batteries for stationary storage will make up only 7% of total battery demand in 2040, notes BNEF. It will be dwarfed by the electrical vehicle market, which will more materially impact the supply-demand balance and prices for metals such as lithium and cobalt.
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Finland has been “invited” by the European Commission to “coordinate battery industry related research into recycling” within the EU, Business Finlandhas reported in a press release.
The project will be led by Outotec together with Aalto University, and Business Finland will play a strong role in advancing the project.
The EU Commission has compiled the European Strategic Action Plan for Batteries which includes a set of concrete measures to “develop an innovative, sustainable and competitive battery ecosystem. One of these measures is recycling at every stage of the battery value chain from materials to applications and products.”
Vice-President of the European Commission for Energy Union Maroš Šefčovič has estimated that in two years Europe could already have a battery market worth €250 billion, notes Business Finland. In this case, the recycling of battery raw materials and equipment, for example, will become even more important.
Recycling is one part of the Batteries from Finland activation program launched by Business Finland at the beginning of this year. The aim is to make Finland the leading country for battery recycling knowhow.
“We are thrilled that our battery industry strengths have been recognised in Europe. Finnish companies and research groups have significant knowhow especially in the field of battery minerals and applications. We have the potential to develop the battery solutions of the future which take recyclability into account,” said Jarmo Heinonen, Senior Director, Business Finland.
Outotec, which is one the world’s leading mining industry companies, will lead the project with Aalto University’s Department of Chemical and Metallurgical Engineering as its main partner.
“The lithium battery research and business have taken a huge leap forward in the past few years. A pilot project is currently being prepared in the EU to support the ongoing research projects in the sector, which will cover the whole battery recycling process starting from their collection and processing. The objective is to return, in an economically viable way, as big a proportion as possible of the battery materials to battery production so that recycling is connected with primary production. In addition, the goal is to define long-term visions, a strategic research agenda and operational programs,” said Ilkka Kojo, Director, Environment and Sustainability, Outotec.