Stabilising supply chains as well as mature and experienced players will benefit the market in the long run and facilitate further cost reductions. As they do, continued policy and regulatory efforts will be key to driving upside in the market.
“The energy storage industry is in the enviable position of juggling growth game-changers from multiple directions. Plunging costs drove speculation in the first scaled markets but as price declines enter a steadier rate, further recognition of storage’s value - rather than cost - will be the key factor in determining growth,” said Daniel Finn-Foley, Wood Mackenzie Head of Energy Storage.
Industry embraces energy storage
Oil majors, utilities and manufacturers alike, all embrace energy storage as part of their onsite power generation units.
“When Google announced a partnership with NV Energy for significant solar-plus-storage investment to power data centres, they were pioneering a new way corporations value renewable energy,” Finn-Foley commented. “Rather than simply offset consumed electricity, Google seeks to time-match consumption with availability and that requires storage. If this catches on among other climate-forward corporations, the upside could be huge.”
“Daimler’s commitment to procure renewables in real-time shows that this trend may become global,” he added. The carmaker Opel, meanwhile, is partnering with the French oil major total on electric vehicle (EV) cell manufacturing. Total already invests in stationary energy storage applications.
Finance refocuses on clean tech sector
Apart from private financing, research in novel energy storage technologies also benefits from a €10 billion innovation fund launched by the European Commission. On the other side of the Atlantic, the US Department of Energy’s Energy Storage Grand Challenge represents the US federal government’s largest-scale action to date.
Massive investment from international development entities, notably the World Bank and the Asian Development Fund, is reshaping relations between finance and cleantech. This trend is quickly moving into the private sector. Blackrock, for starters, decided to end investment in thermal coal and now put sustainability front and centre.
“Storage has emerged as a potential focal point for sustainability, with significant investment from a new multi-billion renewable energy fund set to flow into the storage space,” Finn-Foley forecast. He cautioned, however, that constraints in key commodity availability, delays in manufacturing scale-ups and the gradually diverging priorities of the EV and stationary energy storage space “could throw sand in the gears,” though that could be alleviated through second-life and battery recycling program.