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Correction: BNEF: energy storage is a $620B investment opportunity to 2040

The falling 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 NEF (BNEF).

The global energy storage market will grow to a cumulative 942GW/2,857GWh by 2040, attracting $620 billion in investment over the next 22 years, according to BNEF forecasts. [The dollar investment figure was corrected from $1.2 trillion after BNEF discovered a totaling error. The GW and GWh capacity figures are not affected, and neither are the overall findings. BNEF apologizes for the mistake. -Ed.]

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.

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.

—Yayoi Sekine, energy storage analyst for Bloomberg NEF and co-author of the report

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.

—Logan Goldie-Scot, head of energy storage at BNEF

Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties. 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 US, India, Japan, Germany, France, Australia, South Korea and the UK 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 US will take over in the early 2020s, but will be overtaken by China in the 2020s. China will then lead throughout to 2040.

Global cumulative storage deployments

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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. 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, BNEF said.

Comments

Engineer-Poet

There are potentials out there worth $2 trillion per year by 2040, upwards of $500 billion/yr in the USA alone... and they're going to cut into that market for batteries.

Batteries will have their place (and a rather large one) but long-duration bulk energy storage ain't it.

Calgarygary

In my off grid world of 2030 I'll have 5-7 kw of solar panels + perhaps 15 kwh of battery storage but I'll still need a backup power supply which will be a fuel cell or gas turbine generator integrated with my gas burning furnace. I don't think the backup generator would need to be much bigger than 3 kw. Given the amount of information available nowadays I'm sure the system would be able to anticipate periods of low solar production and keep the batteries topped up from the backup. Since I'll also have an electric car I'll have an additional 60 kwh that I can drive to the nearest charging station to top up and supply my house in emergency situations. It would make more sense to stay connected to the grid but it will be too expensive. A lot like public transit where you have under-utilized infrastructure. On a macro scale the storage requirements could be something similar, about 2-3 X the renewable generating capacity but you are still going to have to burn some fossil fuels or maybe hydrogen if it can be produced at a reasonable cost. I'd venture to guess that with 7 KW of solar panels and 15 KW of storage I could probably meet about 80% of my electricity needs (including mobility) from renewable electricity.

Note I hadn't been able to sign on via typepad for a few weeks but that appears to have been remedied so if others have been experiencing the same problems they should try again and not let the poet have the whole echo chamber to himself.

HarveyD

As soon as battery packs price go well below $100/kWh, fixed and mobile usages will multiply quickly. The above rather linear graph will have to be revised (upward). China, India, other Asian and EU countries with little fossil fuels and major pollution problems will be the prime movers.

Calgarygary

Storage batteries that last 5000 cycles or more could even be viable for behind the meter applications at a cost of $300 - 400/kwh (6-8 cents per kwh cycle). Even though the energy charge on my current electrical bill is around 6 cents per kwh, all the other fixed and variable charges bring the bill close to 20 cents per kwh.

Engineer-Poet

You weren't the only one with the login problem, Calgarygary.  I watched and there were NO comments on this site for a couple of days.  MM said that Typepad was working on the problem and it looks like they fixed it late today.

If you're still burning NG you're not even slightly renewable.  If you're going to go totally off-grid including the NG grid you're doing to need a lot more than 5-7 kW of PV panels, and you'll need a honkin' big tank of something energy-dense to get you through the winter.  My numbers say "Doable? Yes, for some values of doable... Easy? Don't make me laugh."

Ponder how much electricity you use plus how much fuel you burn (both for heating and for driving) through the winter, and work that out as an energy budget.  Figure 70% of that must be satisfied from storage because neither PV nor wind are producing.  Work out how big your tank of stuff must be to get you through, if your storage is (a) ammonia, (b) methanol, (c) ethanol, (d) your synthetic fuel of choice.  Then figure out how much energy and other stuff (hardware, stuff separated from air) you need to fill that tank.

One thing that's hard is storing CO2 for later re-use.  Even if you have a tank of it in an ice bath, the vapor pressure is still about 34 bar.  That's a lot tougher to build to hold than e.g. propane.  The atmosphere is a pretty big CO2 reservoir, but extracting CO2 from it is expensive.

If you can hit on a system that works and is cheap, the world will beat a path to your door.

Calgarygary

EP I'm actually just thinking hypothetically about going offgrid. I live in an inner city neighborhood and I don't even know if that is allowed, although , simply running an extension cord across the fence to the neighbors outdoor outlet, to charge up my batteries would be an even better and more cost effective back-up than a fuel cell or other sort of gas generator. Alternatives to burning gas for heat might include some sort of geothermal scheme or super insulation but I don't know much about that. Maybe longer term solar will get so inexpensive it will make sense to generate hydrogen for storage in caverns and distribution through the gas system.

Anyways it's good to see that Harvey D is back. With the recent legalization of cannabis, I thought we'd lost him forever.

HarveyD

I'm a 100% non-smoker and so is my wife, my children and grand children. It will be interesting to see the short, medium and long term effects on drivers (and others) from cannabis usage?

REs are gaining grounds in many countries and so will clean lower cost H2 and affordable extended range all weather FCEVs.

BEV sales reached 8% of total light vehicles sales in Canada during/for the last quarter, mainly in Quebec, Ontario and BC. However, BEV sales may drop after 01 Jan 2019 when Ontario removes existing subsidies and reduces fuel taxes by 10 cents/L.

Calgarygary

HD
I intend to conduct a few experiments, however, up until now I haven't gotten around to it and like you, as a non smoker my lungs aren't really up to it. Just about every time I go out around the city here I see a Tesla or two, but other models are very rare. For that reason I'm quite surprised by the figure of 8%. The F150 is a very popular family vehicle in this part of the world so it doesn't appear to me that the costs of gasoline is a significant consideration for many when purchasing a vehicle.

HarveyD

The short time boast in electrified vehicles last quarter was probably triggered by near future removal of EV subsidies by Ontario, the arrival of the new Federal cross Canada carbon tax and general increased climate change awareness?

Our city (Laval) added an extra $2,000/EV subsidy to the existing provincial $8,000/EV subsidy.

Engineer-Poet

With all these legal changes, it looks like the announcements of plug-in hybrid pickups from Ford and electrified everything from Volkswagen are just in time to ride the wave that's coming.

HarveyD

Yes E-P, progressive national carbon tax ($20 to $100/ton over 5 to 10 years), coupled with appropriate tax credits for low revenue captive ICEVs users and degressive subsidies (over the next 10-12 years) for new electrified vehicles selling for less than $35,000/$45,000 (US) could help to accelerate the switch and reduce GHGs.

Final choice between (HEVs/PHEVs/BEVs/FCEVs) should be left to purchasers

Engineer-Poet

Harvey, you realize that significant carbon taxes will practically guarantee that every CANDU in Canada will be rebuilt over and over and essentially run until the Sun goes cold?

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