A lack of consensus on the optimal storage technology is acting as a ‘barrier to growth’ of the sector, here Tamarindo’s Energy Storage Report identifies the storage technologies expected to substantially increase market share by the end of the decade
If there is one thing that unites the global energy storage industry, it’s the level of uncertainty about what type of storage technology will be the key driver of the energy transition. Indeed, some leaders of companies that are betting big on specific types of storage tech freely admit that our future is best served by a combination of many versions, be that lithium-ion, pumped-hydro, sodium-ion batteries or compressed air or gas, for example.
Yet, despite the view that a combination of different storage technologies will be necessary as economies target a drastic reduction in carbon emissions, the lack of clarity on the best technology could actually be deterring the wider deployment of energy storage. Indeed, a 2023 study conducted by DNV – which involved a survey of more than 400 senior energy professionals – concluded that the “lack of consensus on optimal technology” was one of the top five barriers to the growth of storage in the year ahead (see chart below).
Lithium-ion batteries and pumped-hydro are the dominant types of storage at present. Pumped storage hydropower is the most widely deployed type of storage around the world – according to the International Energy Agency (IEA), the total installed capacity of pumped-storage hydropower stood at around 160 GW in 2021. Meanwhile, the IEA said global pumped storage hydropower capability was around 8,500 GWh in 2020, accounting for over 90 per cent of total global electricity storage.
How much lithium-ion battery storage is currently installed globally? Total installed grid-scale battery storage capacity stood at close to 28 GW at the end of 2022, according to the IEA and it is estimated that around 90 per cent of that total is lithium-ion battery storage, so approximately 25.2GW.
But, aside from pumped-hydro and lithium-ion which will be the fastest emerging storage technologies between now and 2030. Here Tamarindo’s Energy Storage Report gives you a run-down of the ones to watch:
Thermal energy storage (TES) systems can potentially make use of different materials. TES is often classified in one of three categories: sensible (for example, water and rock), latent ( water/ice and salt hydrates); and thermo-chemical reactions (for example, chemical reactions and sorption processes, that is, a physical or chemical process where one substance becomes attached to another). Sensible storage involves the raising or lowering of a temperature, while latent storage occurs when the phase of a material is changed (solid to liquid or liquid to vapor, for example) without a change in temperature. In the case of a chemical reaction or a sorption process, which takes place on the surface of a material, heat can be either absorbed or released from the material. Major sources of thermal energy storage include heat pumps and heat generated by power plants and waste. The global thermal energy storage market was valued at $20.8 billion in 2020, and is projected to reach $51.3 billion by 2030, growing at a compound annual growth rate (CAGR) of 8.5% from 2021 to 2030. In recent developments, Australia-based MGA Thermal secured $8.25 million in funding to scale its long-duration energy storage system, which incorporates thermal blocks. Meanwhile, in April this year, Israeli thermal energy storage company Brenmiller Energy signed a non-binding term sheet with “one of the largest producers of clean energy in the world” and Green Enesys Group with a view to a definitive agreement to jointly identify, build, and accelerate electrification by using renewable energies and Brenmiller’s thermal energy storage system. Elsewhere, in July, the Spanish Government’s Ministry for Ecological Transition and the Demographic Challenge (MITECO) said that €180 million would be made available for thermal storage projects.
The global compressed air energy storage market was valued at $4 billion in 2021, and is projected to reach $31.8 billion by 2031, growing at a CAGR of 23.6% from 2022 to 2031. Recent developments in this market included Hydrostor entering into a binding agreement with mining project developer Perilya to leverage the existing mining assets at Perilya’s Potosi Mine in Broken Hill, Australia to support the construction of the Silver City Energy Storage (SCES) project. Meanwhile, in July this year, Corre Energy entered an exclusivity agreement – with Contour Energy LLC, a Texas-based energy storage developer – to acquire a 280MW compressed air energy storage project in the West Texas region of ERCOT comprising three pre-constructed salt caverns. Elsewhere, in April this year, the UK government’s Department for Energy Security and Net Zero awarded Cheesecake Energy £9.4 million in funding to test their FlexiTanker technology which stores electricity using a combination of thermal and compressed air energy storage. In addition, in November last year, it was revealed that Australian energy developers Sunshine Hydro and Energy Estate would develop up to 4.5GW of long-duration energy storage in Victoria – under the terms of their agreement, there were plans to explore the use of a range of technologies including compressed air storage. In October last year, UK compressed air energy storage company Innovatium UK was among 20 companies that were awarded a share of £8 million in funding from the UK Net Zero Technology Centre as part of its 2022 open innovation programme.
The global lead-acid battery market was valued at $27.82 billion in 2022 and is estimated to reach a value of $47.8 billion by 2030. Advantages over rival technologies include safety and cost-effectiveness. Lead-acid batteries also have a long lifespan. Some studies have shown that, in some instances, the economics of lead-acid batteries stack up favourably when compared to lithium-ion batteries, though opinion is divided. Last month, it was announced that energy storage system manufacturer EnerSys had agreed a $91.8 million deal to supply its thin plate pure lead (TPPL) batteries to the United States Navy for use on nuclear submarines. Other leading market players include Exide Industries Limited, East Penn Manufacturing Company, Narada Asia Pacific, Amara Raja Batteries, and Leoch International Technology Limited. On the downside, many health and safety concerns have been raised in relation to lead acid batteries and their manufacture and transportation is subject to strict regulation.
A redox flow battery is an electrochemical energy storage device that converts chemical energy into electrical energy through reversible oxidation and reduction of working fluids. It has been forecast that the redox flow battery market will be valued at $2.8bn by 2034. By 2031, it is estimated that Asia Pacific will reach around 14.5 GWh of annual vanadium redox flow battery energy capacity, while North America is expected to reach 5.8 GWh and Western Europe is anticipated to reach 9.3 GWh. Recent developments saw Shanghai Electric Energy Storage Technology, the energy storage subsidiary of Shanghai Electric, raise RMB400 million ($54 million) in series A financing with a view to developing its energy storage business, which would include constructing 100Mbps stacks that can be used in megawatt container-type vanadium redox flow battery energy storage systems. Meanwhile, earlier this year Sumitomo Electric Industries reveal plans to expand its redox flow battery business in the US with an initial investment of about $7,600,000 to “prepare for a local production and installation system for redox flow batteries”. Elsewhere, in August this year, Munich-based energy storage system provider VoltStorage secured a €30 million venture debt loan from the European Investment Bank for the development and commercialisation of vanadium redox flow batteries for commercial and agricultural use. In another recent development, the US Defense Innovation Unit (DIU), in partnership with the US Air Force and US Navy, awarded a prototype contract for the use of CellCube’s megawatt-scale vanadium redox flow battery and management system, which will deploy “integrated hardware and software to connect and balance base energy systems hosted in collaboration with the Navy and Marine Corps”, a statement said.
The global sodium-ion battery market was valued at $0.3 billion in 2021, but is projected to reach $1.2 billion by 2031, growing at a CAGR of 15.9% from 2022 to 2031. The advantages of sodium-ion batteries include low manufacturing costs – particularly when compared to lithium-ion batteries – due to the abundance of sodium, which is present in the earth’s crust and seawater. In recent developments, it emerged that Peak Energy, a US-based company developing sodium-ion battery storage technology for the grid, had launched following a $10 million funding round led by Eclipse, with significant participation from strategic partner TDK Ventures. Meanwhile, other market observers have claimed that sodium-ion batteries will “shape the future”.
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