Energy Transition Handbook - Flipbook - Page 30
Hogan Lovells
30
Energy and battery storage
The global energy storage market is forecast to grow from approximately 4GW of annual
deployments in 2019 to more than 15GW in 2024. Energy (and in particular battery)
storage can play a key role in supporting the balancing of electricity networks, through
providing ancillary services such as frequency response, reducing or time-shifting energy
demand and time shifting energy supply.
This growth in the energy storage market is driven
by many factors, including:
•
the increasingly deployed capacity of
intermittent renewables and the resulting
requirement to stabilise electricity systems and
maintain system frequency and inertia
•
the growth in electric vehicles and e-mobility
•
the speed of battery storage response to a
call for power, with only cutting edge superconductors offering a quicker discharge above
1MW (at a materially higher price)
•
the additional flexibility solutions storage can
offer to grid system transmission operators
but also corporates and consumers through
managed energy solutions
•
the ability of energy storage to help navigate
existing grid constraints and defer or avoid grid
reinforcement capital expenditure
•
the decreasing cost of Li-ion batteries
(from $600/kWh in 2017 to just over $300/
kWh in 2020 with costs predicted to halve
again by 2030)
Key issues:
•
battery storage is a rapidly developing
technology, with early adopters potentially
risking losing out to later projects before
investment is fully recouped and, at the
extreme end, the risks of thermal runaway
(leading to intense and all-consuming fires) are
still prevalent and not entirely understood
•
revenues streams for battery storage remain
uncertain, making the economics of energy
storage challenging
•
being both consumers and generators of power,
many regulatory systems and grids may not be
adequately set up to cope with battery or other
energy storage solutions, which may add to
costs or create regulatory uncertainty
•
there is a relatively restricted supply chain
for the rare earth metals and other elements
(including lithium and cobalt ) needed
to produce battery technologies at scale:
the majority of these are extracted from
developing markets and there are material
social and environmental issues which need
to be considered to ensure that the positive
impact of the technology is not undone by
supply chain issues