Battery sector 'to attract $1.2tn of investment by 2040'

Flywheel Energy Storage

Flywheel Energy Storage

The plummeting cost of batteries will lead to a boom in energy storage system uptake between now and 2040, attracting $1.2 trillion (£910bn) in investment.

That's the view offered by research company Bloomberg New Energy Finance (BNEF) in a new report, which predicts the global energy storage market will grow to a total capacity of 942GW over the next 22 years.

Behind-the-meter, or BTM, installations will be sited at business and industrial premises, and at millions of residential properties.

"We have become much more bullish about storage deployments since our last forecast a year ago", Sekine said.

"This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology - electric vehicle (EV) charging and energy access in remote regions". The outlook reveals that most capacity additions installed before 2030 are likely to be industry-scale, with meter applications set to overtake large-scale projects at some point between 2030 and 2040. For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.

"These nine markets will represent two-thirds of the installed capacity by 2040".

China, the US, India, Japan, Germany, France, Australia, South Korea and the United Kingdom are forecast to be the leading countries, representing two-thirds of global installed capacity by 2040. For now, South Korea takes top spot but will be overtaken by the United States in the early 2020s, only to be surpassed by China from that decade onwards.

Especially developing countries in Africa will also see rapid growth in battery storage.

Those interested in the use of aggregated behind-the-meter energy storage in the place of utility-scale applications will have to wait for years before regulatory frameworks in some countries fully allow it, said BNEF.

The global energy storage market is set to draw in $1.2trn investment by 2040 and the cost of batteries is also set to significantly decrease. It will be dwarfed by the electrical vehicle market, which will more materially impact the supply-demand balance and prices for metals such as lithium and cobalt.