Posted on 01 Jun 2023
Global investment in battery storage is expected to continue a rapid growth journey nearly doubling to $38 billion this year, the International Energy Agency (IEA) estimates.
Last year, spending on battery storage reached just over $20 billion -- $8 billion in China, $6 billion in the US, $5 billion in Europe and $1 billion from OECD Pacific. In 2023, the IEA forecasts growth will come mainly from utility-scale battery storage systems to help increase grid flexibility at a time of a “major transformation” in the energy system.
China is forecast to continue leading investments with a capital expenditure estimated at $14 billion this year. The US is closing in, with battery storage investments expected to more than double to $13 billion. Spending in Asia Pacific (excluding China) is set to triple to around $3 billion.
Favourable policies in the US, Europe, Australia, China, Japan and Korea are expected to enable further growth in battery storage investment this year. Brazil and India also provide a “bright spot” in terms of positive momentum, but the IEA warns most investment comes from developed countries and China.
In tandem with higher investment allocation, capital costs for batteries increased last year for the first time in a decade. This reflects tight supply chains for battery metals and a sharp increase in demand, among other factors.
China continues to have the lowest cost for utility-scale batteries, followed by Europe and the US. However, thanks to federal support, the US could see capital cost reductions of nearly 15% this year to around $1,100/kilowatt for utility-scale cost and $900/kW for behind the meter, Kallanish understands.
Meanwhile, record EV sales and governments’ push to scale up domestic supply chains have sparked a new wave of lithium-ion battery manufacturing projects around the world. “If all capacity announcements were to materialise, then 5.2 TWh [terawatt-hours] of new capacity could be available by 2030,” the IEA projects.
According to the IEA’s World Energy Investment 2023 report, global investment in clean energy technologies will rise to $1.7 trillion this year. This includes spending on renewables, batteries, EVs, grids, hydrogen, heat pumps and nuclear power. Annual clean energy investment is forecast to rise by 24% between 2021 and 2023, driven mostly by renewables and electric vehicles.
Source:Kallanish
