The battery boom
The battery boom to attract $620bn in investment by 2040
The battery boom is coming to China, California and basically everywhere else – and it will be even bigger than previously thought.
The global energy-storage market will surge to a cumulative 942 GW by 2040, according to a new forecast from Bloomberg NEF published on November 13, and that growth will necessitate $620-billion in investment.
Sharply falling battery costs is a key driver of the boom. BNEF sees the capital cost of a utility-scale lithium-ion storage system falling another 52% by 2030.
But cost isn’t the only factor. Governments from China to California are spurring demand, as is the rise of electric vehicles and solar power. There’s also been a greater focus on storage for electric-vehicle charging as well as energy access in remote areas.
“Costs have come down faster than we expected,” YayoiSekine, a New York-based analyst at BNEF, said in an interview. “Batteries are going to permeate our lives.”
The implications of cheaper batteries are far-reaching, upending multiple industries and helping spur technologies necessary to help fight climate change. Batteries power the electric vehicles that are popping up on our freeways. They also unlock solar power from the exclusive confines of the sun.
Two important markets come into particular focus. China, which is building up its battery-manufacturing capacity, will be a central player in the boom.
California, meanwhile, has pushed through a series of measures in recent years that will directly or indirectly spur more batteries, including legislation that would require all of the state’s electricity to come from carbon-free sources by 2045.
“Storage is just so sensibly the next step in the evolution of renewable energy,” Edward Fenster, the executive chairperson of San Francisco-based rooftop-solar company Sunrun, said in an interview. “If we’re going to get to 100% renewable energy, we’ll need storage.”
Six key takeaways from the latest BNEF battery forecast:
- Annual energy-storage deployments are now forecast to exceed 50 GWh by 2020. That’s three years earlier than BNEF’s outlook from just last year.
- Energy storage may be equivalent to 7% of the world’s total installed power capacity by 2040.
- The Asia-Pacific region will be home to 45% of total installations on a megawatt basis by 2040. Another 29% will be spread across Europe, Middle East and Africa. The remainder will be in the Americas.
- The majority of storage capacity will be utility-scale until the mid-2030s. But then so-called behind-the-meter projects— installations at businesses, industrial sites and residential properties—will overtake utility-scale.
- A list of the leading battery countries is topped by: China, the US, India, Japan, Germany, France, Australia, South Korea and the UK. South Korea today dominates the market but will be overtaken by the US early in the 2020s—and both will later be eclipsed by China.
- Storage is coming to developing countries in Africa, too. BNEF explains it thusly: utilities will likely recognize that the combination of solar, diesel and batteries in “far-flung sites” is cheaper than extending the power grid or building a fossil-only generator.
Vanadium batteries the solution
Vanadium batteries the solution to meet growing energy storage demand – Bushveld
Vanadium redox flow batteries (VRFBs) are a front-runner technology for meeting the growing demand in the energy storage sector, says Bushveld Energy CEO Mikhail Nikomarov.
During a webinar on energy storage this week, he noted that data by US-based multiservice professional firm Navigant shows that VRFB demand is expected to increase to over 18 000 MWh by 2027.
However, keeping market researcher BMI Research’s suggested 25% market share in mind, Nikomarov on Tuesday noted that this could increase to over 27 500 MWh by 2027.
If these forecasts hold true, 82 000 t of vanadium will be needed just for VRFBs, he said. Taking the BMI forecast into account, this could increase to over 96 000 t.
“This is a significant demand, and actually presents us with an upside,” he said.
Nikomarov said VRFBs offered clear advantages, both technically and financially, which “sets it apart in large-scale stationary applications”.
Despite vanadium’s limited share in current markets, the demand for vanadium – which offers future opportunities in consumer and mobile energy storage – remains underwritten by the steel market.
Existing demand from the steel and chemicals markets, Nikomarov said, implies a compound annual growth rate (CAGR) for vanadium demand of 2.5% from 2017 to 2027.
The high dependence of VRFB on vanadium may increase this demand CAGR to 8.4%, he added.
Supporting this growth, is the industry’s optimism surrounding VRFBs.
Counting in the battery technology’s favour, he highlighted, was the evolution of energy storage cases that are “actually what a vanadium battery does”, which is longer duration and multiple purposes from one battery; as well a reduction of cost and consolidation.
Nikomarov also pointed out that the technology has Chinese political support, which is leading to greater VRFB deployment in Asia, compared with other regions.
He added that VRFB technology also formed part of China’s new National Development Plan.
Other advantages include an internal rate of return of between 2% and 22%, flexibility in its uses, as well as a movement to long-duration storage.
Compared with lithium-ion batteries, which Nikomarov noted are much stronger for shorter duration applications, VRFB growth will be seen in larger uses, such as utility-scale energy storage over the next decade, especially considering that these have a need for transmission, distribution and generation capacity.
Lithium-ion batteries, on the other hand, are more commonly used in power markets where frequency control is remunerated and monetised.
“It’s important to [keep in mind] that within this kind of framework, it’s not really exclusive. There’s a lot of areas in between where you could use either technology from a technical, commercial or hybrid perspective,” Nikomarov stated.
Additionally, he highlighted that those who require long duration, such as utilities, will comprise about 90% of the market, which is very favourable to the growth and increased use of VRFBs.
Shorter duration storage, which is an established market, is what VRFB has historically been used for, but it is not growing as fast as some of the other sectors, and will not be such a large market, Nikomarov said.
Further, despite initial start-up costs being a bit more expensive, he believes that, in the case of VRFB, which can be used more as a result of a better cyclability, end-users have the potential to get a greater capitalisation.
“It brings the cost of the battery down and it brings it down to something that is below lithium. And in some cases, [this decrease in cost is significant].”
In terms of pricing and costing, Nikomarov referred to data from Navigant, which forecast that cost decreases for lithium-ion are expected to slow, whereas the same degree of slowdown cannot be applied to VRFBs.
“Costs are expected to come down for all technologies owing to scale, completion and lower transactions,” he said, adding that vanadium, which is used in both the cathode and anode of a VRFB, will further reduce the cost of the battery technology.
“In summation, we see an extremely exciting sector in vanadium. If you look at steel, and its current application in allows, there’s a CAGR of about 2.5%. Once we start looking into some of the scenarios on vanadium battery adoption, that number increases,” Nikomarov enthused, adding that, combined, both the vanadium and steel markets can expect to see a growth of over 10% over the next eight years.
Bushveld Minerals CEO Fortune Mojapelo, meanwhile, said the primary vanadium producer has articulated an ambition to grow its production platform to more than 10 000 t/y of vanadium in the medium term, which will principally be driven by its subsidiary Bushveld Vametco.
Of this target, 5 000 t/y will be from Vametco, where the producer is aiming to further increase its production capacity.
Bushveld, which is also the parent company of Bushveld Energy, continues to look at further targeted brownfield opportunities, which it believes will see the company grow to beyond the 5 000 t/y of vanadium envisaged for Vametco.
“We see portfolio diversification through the supply of electrolyte for VRFBs for energy storage and particularly some of the activities. We are confident that the stage is set to really unlock the opportunity for the downstream integration through Bushveld Energy in the energy storage sector,” Mojapelo commented.
Meanwhile, Bushveld looks forward to completing the commissioning and development of a VRFB battery, with a peak of over 120 kWh, for State-owned Eskom’s research facility.
The battery is expected to be commissioned during the last quarter of this year.
The producer is also working with the Industrial Development Corporation on an electrolyte production facility with multiple megalitre yearly production capacity, located in the East London Industrial Development Zone.
Nordex to install more turbines
Nordex to install more turbines at four South African wind farms
Wind turbine designer and manufacturer Nordex will double the number of local employees and install another 174 wind turbines on four wind farm sites in South Africa.
Nordex South Africa MD Anne Henschel said the investment followed the signing of Round 4 of the Renewable Energy Independent Power Producers Procurement Programme (REIPPPP), in which Nordex was awarded four projects and an additional 547 MW of wind capacity.
“We see the doubling of our local workforce as a sign of our continued commitment to the South African wind industry,” said Henschel.
The company, which has been active in South Africa for the past six years, will be installing its AW125 wind turbines on four sites.
“We will also have local concrete tower production facilities close to all of the sites. By manufacturing these concrete towers locally, we are able to uplift the local communities,” added Henschel.
Nordex Group has been awarded a total of nine REIPPPP contracts for wind turbine manufacturing and service maintenance, of which five projects are fully operational. With over 1 GW, this will be highest amount of wind capacity provided by one wind turbine manufacturer in South Africa, once operational.
The company is supplying turbines to the Roggeveld and Nxuba wind farms in the Eastern Cape, as well as the Copperton and Garob wind farms in the Northern Cape, which are all under construction.
Through the REIPPPP, Nordex is also involved in projects at the Dorper, Kouga, Amakhala Emoyeni and Gibson wind farms in the Eastern Cape. It has also supplied wind turbines, with a total of 138 MW of power to Gouda wind farm in the Western Cape. All of these plants are up and running.
Nordex Group has recently launched and installed the first N149/4.0-4.5, an onshore wind turbine with the longest blade worldwide. Henschel said the turbine is very attractive for South African wind conditions, especially with a view to Round 5 of the REIPPPP.