Report: Battery Storage Costs To Decline By 40-60% By 202009 Aug 2015 |
Various battery storage technologies will see their associated costs decline by as much as 40-60% by the year 2020, according to a new report from the Australian Renewable Energy Agency.
This decline in costs will be accompanied by a "mega-shift" towards the adoption of energy storage technologies -- driven mostly by growing demand (from the utility, commercial, and residential sectors) and by the reduction of costs itself.
With regard to the 40-60% figure, the report argues that lithium-ion batteries will see costs fall by 60%, and that flow batteries will see costs fall by 40%, by the year 2020.
"The trend of reducing costs for battery technologies such as lithium-ion and flow battery technologies suggests that there will be a dramatic shift towards these technologies in the next one to two decades,” the report noted.
The report also argues though that, for this adoption to occur at the predicted pace in Australia, demonstration project experience will need to be further developed -- as a means of spreading awareness amongst the public and those in key industries/positions.
This looks likely to be true especially for distributed solar PV system owners, as the report noted that: “One of the largest markets for energy storage systems will be the end-user market, which looks to pair storage systems with rooftop solar PV." Going on:
“PV can be coupled with storage to maximize usage behind-the-meter and ensure that PV generated during the day can be stored and used during the peak periods. This model is currently valuable for consumers because it reduces export of excess solar to the grid. Instead, the locally generated electricity can be used behind-the-meter, offsetting electricity purchased from the grid (which can be three to five times more expensive than standard export tariffs).
“The behind-the-meter market segment of energy storage is widely expected to undergo a similar boom to the solar PV industry, with a tipping point expected within the next 10 years as further cost reductions are achieved."
The report also argued that off-grid applications seem to be the biggest potential growth area (as far as value goes).
“Off-grid electricity is Australia’s most expensive electricity due to the underlying high gas and diesel prices in remote areas. As such, the business case for renewables as a means to offset fuel use is strong. Similarly, in order to enable higher penetrations of renewables, energy storage can be utilized to manage the intermittent nature of wind or solar generation.”
Beyond these factors, other drivers behind the predicted "mega-shift" include: protection against blackouts, tariff avoidance, time-of-use arbitrage, and network investment return.
Factors potentially remaining as barriers to a wider embrace of energy storage in Australia include: the lack of subsidies/incentives, political uncertainty accompanying the Abbott government, and other regulatory issues.
The report thereby argues that work with various industry groups -- including technology suppliers, electricity networks, and utility retailers -- should be continued in order to prepare the market for a future boom.
“By supporting the development of an efficient market for energy storage, ARENA will facilitate additional supply of renewable energy by addressing intermittency and power quality challenges that could otherwise stall growth in the market."