The production of batteries for energy storage and electric vehicles (EVs) is being scaled up quickly around the world, but it might not be fast enough to meet surging global demand, according to analyst Wood Mackenzie.
“Securing adequate supply to meet growing demand is an immense challenge and while vendors are scaling up with support from the energy and automotive industry, it is not immediately clear that supply can meet surging demand,” said Daniel Finn-Foley, head of nergy storage at WoodMac.
“Complications in key commodity availability [such as cobalt], delays in manufacturing scale-ups and the gradually diverging priorities of the EV and stationary energy storage space could all throw sand in the gears, though there is significant potential for upside through second-life and battery recycling programmes that will emerge over the next five to ten years.”
WoodMac expects the global stationary energy storage market to grow from 4GW today to 15GW in 2024 as the cost of batteries continues to fall.
“The energy storage industry is in the enviable position of juggling growth game-changers from multiple directions,” said Finn-Foley. “Plunging costs drove speculation in the first scaled markets but as price declines enter a steadier rate, further recognition of storage’s value — rather than cost — will be the key factor in determining growth.”
Finn-Foley says that over the next few years, energy storage will take a bigger role in accelerating the energy transition, especially as the world of finance increasingly moves away from fossil fuels towards greener investments.
“As the decade progresses and further incentives accelerate the energy storage market, the dynamic of the industry pushing stakeholders to recognise the technology for its potential will quickly flip,” said WoodMac.
“Stakeholders are already pulling, rather than being pushed, and turning to storage rather than being forced to consider it. The timing and speed of this push/pull shift and the speed with which the industry can react will define its potential,” added Finn-Foley.