{"id":13189,"date":"2019-03-13T00:00:00","date_gmt":"2019-03-13T00:00:00","guid":{"rendered":"https:\/\/cms.alj3.clients.lemonhq.io\/perspectives\/storing-success-batteries-revolutionizing-global-energy-market\/"},"modified":"2026-03-20T07:28:34","modified_gmt":"2026-03-20T07:28:34","slug":"storing-success-batteries-revolutionizing-global-energy-market","status":"publish","type":"perspectives","link":"https:\/\/cms.alj3.clients.lemonhq.io\/en\/perspectives\/storing-success-batteries-revolutionizing-global-energy-market\/","title":{"rendered":"Storing Up Success: How Batteries Are Revolutionizing the Global Energy Market"},"content":{"rendered":"

As battery storage systems become increasingly advanced, and research and development continues around the world at an unprecedented rate, what is the current outlook for this exciting technology \u2013 and how could it impact energy planning in the future?<\/p>\n

As the rise of renewable energy continues to gather pace, a range of hurdles need to be overcome.\u00a0 Among the biggest challenges is how to balance the grid during fluctuations in supply and demand. \u00a0In other words, what happens to renewables-based power generation if the sun isn\u2019t shining or the wind isn\u2019t blowing?<\/p>\n

One solution is already transforming power generation projects around the world: battery storage.<\/p>\n

According to KPMG, the widespread and rapid implementation of intermittent renewable energy sources, namely solar photovoltaic (PV) and wind, is \u201ccatalyzing efforts to modernize electricity systems around the world[1]<\/strong><\/a>\u201d<\/em>. \u00a0A key part of this modernization program is the development, introduction and growth of battery storage systems.<\/p>\n

\"Tesla\u2019s

Tesla\u2019s Gigafactory: Tesla broke ground on the Gigafactory in June 2014 outside Sparks, Nevada. \u00a0In mid-2018, battery production at Gigafactory 1 reached an annualized rate of roughly 20 GWh, making it the highest-volume battery plant in the world (source: tesla.com).<\/span><\/p><\/div>\n

Spurred by a surge in manufacturing demand for electric vehicles[2]<\/a>, as well as technological advances that are seeing large-scale installations store renewable energy and provide back-up options to traditional power supplies, the cost of battery storage is falling dramatically. \u00a0At the same time, the capacity and performance of battery storage systems is increasing exponentially.<\/p>\n

\"Skateboard

The \u2018skateboard\u2019 platform from the RIVIAN EV range afford compact storage and low center of gravity.<\/span><\/p><\/div>\n

\"Rivian\"<\/p>\n

At the 2018 LA Autoshow, EV start-up RIVIAN grabbed attention when it unveiled the R1T – an electric pick-up truck with a maximum single-charge range of 645 km. \u00a0Aiming to change the EV paradigm, RIVIAN believe each journey should leave a mark on the human spirit, but not the planet so they are developing vehicles and technology to get out and explore the world.\u00a0 At their battery center in Irvine CA, their rugged \u2018skateboard\u2019 platform is engineered for this with the batteries slung low between the wheel-base.<\/p>\n

Three batteries are available for the R1T: a 180 kWh battery (range: 645 km), 135 kWh model (range: 490 km), and 105 kWh option (range: 370 km). \u00a0With a DC fast charger, it can be charged up to 160 kWh in just 50 minutes.<\/p>\n

\"Battery<\/p>\n

Seb Henbest, Head of EMEA at Bloomberg New Energy Finance (BNEF), says:<\/p>\n

\u201cThe arrival of cheap battery storage will mean that it becomes increasingly possible to finesse the delivery of electricity from wind and solar, so that these technologies can help meet demand even when the wind isn\u2019t blowing and the sun isn\u2019t shining.\u00a0 The result will be renewables eating up more and more of the existing market for coal, gas and nuclear[3]<\/strong><\/a>.\u201d<\/p><\/blockquote>\n

A pioneering development in Chile<\/a> is already turning these predictions into reality. \u00a0Fotowatio Renewable Ventures (FRV<\/a>), part of Abdul Latif Jameel Energy<\/a>, is developing a groundbreaking 540 GWh hybrid solar-wind energy project with integrated battery storage capabilities.<\/p>\n

The project, FRV\u2019s third in Latin America, is the company\u2019s first hybrid wind-solar project and the first to use battery storage, enabling it to provide 24\/7 renewable power.<\/p>\n

\"Daniel\u201cWhen the conditions are not suitable for solar or wind power, the batteries automatically step in and discharge their stored renewable energy, maintaining an uninterrupted supply of renewable energy into the network at all times,\u201d<\/em> explains Daniel Sagi-Vela<\/a>, CEO of FRV.<\/p>\n

Similar innovations are transforming the sustainability of renewable energy projects all around the world, including in Japan, where Tokyu Land Corp, Mitsubishi UFJ Lease and Finance and Green Power Development Corporation are constructing a 92 MW solar power plant with a 25 MWh lithium-ion battery in Kushiro-cho, Hokkaido[4]<\/a>.<\/p>\n

The current position of battery storage<\/strong><\/p>\n

Experts at McKinsey & Co. firmly believe that \u201cthere is\u2026 no doubt that storage\u2019s time is coming[5]<\/strong><\/a>.\u201d<\/em><\/p>\n

\"\"<\/p>\n

Bloomberg NEF predicts that US$ 548 billion will be invested in battery advanced capacity technology by 2050, with 41% of that heading to Asia Pacific and US$ 168 billion pouring into Europe[6]<\/a>.<\/p>\n

\"Battery<\/p>\n

\"Energy<\/p>\n

Of the 1,291 GW of new capacity it anticipates, two-thirds will, it says, be at the grid level, with the other 33% coming from private installations in homes and businesses[7]<\/a>.<\/p>\n

Against this backdrop, the ability of battery storage technology to generate headlines around the world is understandable. \u00a0In part, that has been due to the publicity generated by Elon Musk and his company Tesla, when in 2017 they delivered what was then the world\u2019s largest lithium ion battery to the Hornsdale Power Reserve in South Australia. \u00a0Mr Musk had taken part in a high-profile wager that he could deliver the battery in just 100 days \u2013 or forfeit any payment for the project.<\/p>\n

\"Hornsdale

The battery at the Hornsdale Power Reserve, South Australia.<\/span><\/p><\/div>\n

The battery, which stores excess energy from wind turbines at the Hornsdale wind farm[8]<\/a>, holds enough power for 8,000 homes for 24 hours, or more than 30,000 houses for an hour during a blackout[9]<\/a>. \u00a0Within its first month of operation, it showed its value on two separate occasions. \u00a0It responded in just 140 milliseconds when the Loy Yang powerplant in Victoria, which is coal-fired, suffered a power cut in December 2017[10]<\/a>. \u00a0Tom Koutsantonis, Australia\u2019s State Energy Minister, drew a stark contrast with the alternative, Torrens Island power station, which \u201cwould take half an hour to an hour to energize and synchronize into the market[11]<\/strong><\/a>\u201d.<\/em><\/p>\n

It is a basic law of energy provision that if power demand exceeds generation, an alternative source must provide a balance. \u00a0Yet even traditional power plants with steam turbines can take 30 seconds to take effect[12]<\/a>. \u00a0So while Tesla\u2019s battery responded far quicker than Torrens Island, it is significantly outperformed by a battery storage solution used on Germany\u2019s network that can increase its output power from 0 to 100% in 40 milliseconds[13]<\/a>.\u00a0 And Sanjeev Gupta, a British billionaire, is already planning to install a battery bigger than Tesla\u2019s as part of a US$ 1 billion renewable energy plan in South Australia[14]<\/a>.<\/p>\n

Meanwhile, in Mexico, the country\u2019s first grid-scale battery has been installed as a backup to a 130MW microgrid serving a car factory in Monterrey. \u201cWe needed something that could react extremely fast,\u201d said Matt Ginzberg, Principal at Arroyo Energy, the developer of the battery[15]<\/a>.<\/p>\n

The economics of success<\/strong><\/p>\n

Just as important as the speed of performance of battery-based power generation, however, are the economic issues.<\/p>\n

For any new development to reach large-scale deployment in the energy sector requires a favorable economic landscape. \u00a0With the advance of technology, the economics of battery storage are becoming impossible to ignore.<\/p>\n

\u201cGrid-scale batteries need to make almost US$ 200 a megawatt-hour for each charge-discharge cycle to break even.\u00a0 But that could dip below $100 by 2020[16]<\/strong><\/a>,\u201d according to a BNEF report released in July 2018.<\/p><\/blockquote>\n

According to 2015 study The Economics of Battery Energy Storage<\/a>, prepared by the Rocky Mountain Institute (RMI), energy storage makes sense when multiple functions can be achieved with an installation. \u00a0This can then translate into multiple sources of revenue or avoided cost credits (illustrated below).<\/p>\n

\"Battery<\/p>\n

The installation of battery storage systems also leads to significant savings from not needing to build \u2018peaker\u2019 plants that operate just a few hours a day[17]<\/a>. \u00a0The sums, it is argued, make the upfront cost of a battery-based facility all the more lucrative[18]<\/a>.<\/p>\n

It is this win-win combination that has prompted officials from New York State to set a target of deploying 1,500 MW of energy storage by 2025[19]<\/a>. \u00a0This is equivalent to the electric demand of 20% of all New York State homes.\u00a0 Its plans, which position \u201cenergy storage \u2026 at the forefront of the dynamic changes occurring in New York\u2019s energy sector<\/em>\u201d, are set to deliver a raft of benefits[20]<\/a>, including:<\/p>\n