Energy storage is the glue that holds the renewable energy revolution together, and if the latest forecast from the firm BNEF (aka Bloomberg New Energy Finance) holds true, there are more fireworks to come. BNEF has just revised its forecast for global energy storage upward to a 122-fold increase, from the current marker of 9 gigawatts globally to 1,095 gigawatts by 2040.
By way of comparison, just last November BNEF was anticipating 942 gigawatts by 2040, though the underlying result is the same: “Cheap batteries mean that wind and solar will increasingly be able to run when the wind isn’t blowing and the sun isn’t shining.”
There’s plenty more energy storage news outside of the new BNEF report. It focuses on lithium-ion battery technology and it doesn’t even count pumped hydro, which is by far the major form of utility scale energy storage currently available in the US and other markets.
Alternative battery materials and alternative systems like thermal energy storage and renewable hydrogen are also coming on strong, but for now let’s focus on that thing about lithium.
There was supposed to be a shortage of lithium, but the world’s top lithium producer, Australia, has been on a mine-opening tear. The second place producer, Chile, is also planning to ramp up output.
Lithium recovery from brine and recycled batteries will also be contributing to the pot.
All of this activity has already contributed to a drop in the global price of lithium in recent months, and the bottom is a long way down. BNEF foresees that the surge in energy storage installations will be fueled by a 50% drop in the cost per kilowatt-hour of Li-ion batteries by 2030, partly due to the advent of low cost lithium.
Who’s Gonna Pay For All This Energy Storage?
There being no such thing as a free lunch, BNEF notes that it will cost many benjamins for the Li-ion energy storage market to reach its 122-fold potential by 2040.
BNEF puts the figure at a US$622 billion investment over the next 20 years. That’s chump change! Just look at the US Congressional Budget Office estimate for national defense in the fiscal year 2020. It is looking at a total of US$727,569 million for just one year if you throw in the Energy Department’s nuclear programs and the Maritime Administration.
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