|BNEF Graph from a March 26, 2019 report titled:
Battery Power’s Latest Plunge in Costs Threatens Coal, Gas
Energy storage solves the intermittency problem of renewable forms of energy like wind and solar. Only a few years ago battery technologies were too immature to support widespread, large-scale deployment of renewables. Now less expensive storage technologies are making renewables far more attractive. Despite the uneven allocation of subsidies, the plummeting price of energy storage has made it possible for clean energy to out-compete fossil fuels.
When they are partnered with some form of battery, renewables can power the world. However, the amount of energy that will need to be stored is vast. Utility scale batteries are part of the answer but so are alternatives like pumped hydro.
A new study suggests pumped-hydro energy storage is a scalable inexpensive solution. Researchers identified 530,000 sites worldwide suitable for pumped-hydro energy storage. This would allow for a storage capacity the far exceeds the power requirements of the entire planet. These sites have the capacity to easily store at least 22 million Gigawatt-hours (GWh) of energy.
A recent Bloomberg report says the cost of energy storage is plummeting and it can now compete with gas and even coal in many markets. The cost of lithium-ion batteries has fallen 35% to $187 per megawatt-hour since the first half of 2018. Batteries also have an added benefit. When storage batteries are not in use during periods of peak power demand they can help regulate the flow of power on electrical grids.
According to a 2017 BNEF report, the global storage market will double six times by 2030 and another BNEF report, a year later suggests that energy storage is a $620 billion investment opportunity to 2040. The study predicts that the global energy storage market will grow to a cumulative 942GW/2,857GWh by 2040.
“Our analysis shows that the LCOE per megawatt-hour for onshore wind, solar PV and offshore wind have fallen by 49%, 84% and 56% respectively since 2010. That for lithium-ion battery storage has dropped by 76% since 2012, based on recent project costs and historical battery pack prices.” Lithim-ion costs have fallen 35 percent in the past year alone
The good news continued into 2019 with ongoing cost improvements in lithium ion batteries. According to Jon Moore, Chief Executive of BNEF, the most recent New Energy Outlook report predicts even faster growth this year.
The more renewables/storage are scaled the most price competitive they will be. The price of batteries are expected to keep declining for the foreseeable future. According to a 2019 BNEF report, growing EV adoption will also help drive the cost of lithium-ion batteries down 73 per cent by 2030.
Declining prices make microgrid systems a very attractive opportunity. There are a number of practical illustrations of the real world viability of storage options. The Blue Lake Rancheria’s 500-kilowatt solar array and storage system saved a California tribe $200,000 a year and makes them more self-sufficient. Tesla recently installed the world’s largest lithium battery in Australia and it has a payback window of only three years.
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Renewable Energy Storage by Donald Sadoway (Video)
The Crucial Role of Public Private Private Partnerships in the Development of Energy Storage