Due to the growing demand for renewable energy, the global market for battery energy storage is expected to exceed 10.8 billion dollars by 2026. As the largest battery storage market in that year, Asia-Pacific is expected to lead the way.
Fremont, CA: With BESS (Battery Energy Storage Systems), we can reduce our reliance on fossil fuels while facilitating more renewable energy production. It provides safety and security for our energy grid, balancing supply and demand.
Longevity of batteries
Stay ahead of the industry with exclusive feature stories on the top companies, expert insights and the latest news delivered straight to your inbox. Subscribe today.
It is crucial to consider the lifespan of batteries used for grid-scale storage, since they need to provide reliable performance over the long term. There is a growing movement among battery manufacturers to develop long-lasting batteries (such as flow batteries), reducing the need to replace them frequently and improving their long-term performance.
As of today, longer storage durations have a relative cost disadvantage. Grid support services, such as frequency response, are typically delivered within an hour. Trading energy on the wholesale and balancing markets is expected to become a more significant source of a project's revenue in the future. A longer duration will be beneficial for this.
Operator-friendly
It is becoming more economical for grid operators to use grid-scale batteries as storage technology decreases. Battery pack prices are forecast to drop again in 2024 as more extraction and refining capacity opens up, easing lithium prices.
Reliable and safer
Grid-scale battery storage must adhere to safety and reliability standards. New safety features and testing protocols are being developed by battery manufacturers, including solid-state batteries for improved fire safety and sodium-ion batteries for stronger supply chains. With the maturation of the industry and more data available, insurers are also becoming more familiar with storage. Long-term costs should be reduced as underwriter confidence reduces premiums.
Technology advancements
Battery storage is dominated by lithium-ion batteries (LIBs), which are the most mature and dominant technology. Currently, Lithium Nickel Manganese Cobalt oxide (NMC) and Lithium Iron Phosphate (LFP) are the most prevalent LIB cell chemistries. NMC has traditionally offered high energy density. LFP is expected to grow its market share despite lower costs, improved energy density, and available supply chains.
A greater demand for energy storage technologies is expected as renewable energy sources increase. An increasing amount of funding is being directed to non-lithium and long-duration energy storage.