Stationary energy storage installations will grow 122-fold from 2018 to 2040, rising from 9GW/17GWh to 1,095GW/2,850GWh, according to a new report from BloombergNEF (BNEF).

This build-up will require $662bn of investment, which will be made possible by lithium-ion battery per-kWh costs halving by 2030, on top of the 85% reduction seen in 2010-18,

BNEF now expects that “the majority of new capacity will be utility-scale, rather than behind-the-meter at homes and businesses”.

“In the near term, renewables-plus-storage, especially solar-plus-storage, has become a major driver for battery build,” said Logan Goldie-Scot, head of energy storage at BNEF. “This is a new era of dispatchable renewables, based on new contract structures between developer and grid.”

BNEF added in a statement: “Demand for storage will increase to balance the higher proportion of variable, renewable generation in the electricity system. Batteries will increasingly be chosen to manage this dynamic supply and demand mix.

“The report finds that energy storage will become a practical alternative to new-build electricity generation or network reinforcement.”

The report does not quantify the impact electric-vehicle (EV) batteries might have on balancing the grid, but says that the total demand for batteries from the stationary storage and EV sectors will reach 4,584GWh by 2040. BNEF expects EVs to make up a third of the global passenger vehicle fleet by 2040, up from less than 0.5% today.