The Development Of Global Lithium Batteries in 2020
2020 is destined to be an extraordinary year. The Coronavirus epidemic has become the theme of the year. The curve of confirmed cases affects the nerves of many industries like the stock market, and for the international energy storage market. 2020 is magical, full of challenges, and a breakthrough and historical creative year. Form seven key words, OSM energy will take you to review what happened in the international renewable energy market this year.
1 Epidemic relief energy storage
In 2020, the COVID-19 epidemic has swept the world, and many industries have been severely affected. For the energy storage industry, especially in the first half of the year, many countries have experienced delays in the approval, procurement, transportation, and construction of battery energy storage projects. As a result, the scale of newly commissioned projects has decreased ,compared with the same period in 2019. According to statistics from the Zhongguancun Energy Storage Industry Technology Alliance (CNESA) Global Energy Storage Project Library,in the first half of 2020, the global operation of new project size of 591.8 MW, fell 26.2%. In addition, the total amount of financing in the energy storage field (including venture capital, private equity, etc.) has also fallen from US$1.9 billion in the same period last year to US$716 million.
In response to this, and at the same time to revive and boost the economy, many countries and regions have begun to take relevant measures to combat the negative impact of the epidemic, and many of them support the energy storage industry, such as:
- The U.S. Congress has issued a package of epidemic relief plans, including extending the investment tax credit for photovoltaic systems and allocating US$1 billion to support research, development, and demonstration of energy storage technology.
- The Western Australian government has released a package of US$66.3 million projects focusing on renewable energy, which includes support for battery energy storage systems and virtual power plants.
- The European Union plans to invest 750 billion euros to support the recovery of the green economy. And energy storage will play an important role in achieving a green economy in Europe, especially in the transportation and energy industries to achieve carbon neutrality.
- Austria launched a 36 million euro tax refund plan for small optical storage systems.
- Italy provides tax relief for household energy storage systems, and the Lombardy government in the north will also allocate 10 million euros to continue to provide subsidies for users who purchase household energy storage systems.
2 “Large” scale renewable energy
After the downturn in the first half of the year, especially the first quarter, the market has gradually recovered. The application and construction of previously stalled or delayed projects have gradually returned to normal. The construction scale of the project has become larger and larger, and it has begun to enter the era of “large” scale. Represented by the United States, the United Kingdom, and Australia, they have successively released construction plans for 100-megawatt energy storage projects, each of which has created a record high in scale.
In the United States , undoubtedly 2020 is an important year in the history of energy storage. For the first time, the scale of the new market for grid-level battery energy storage has exceeded the $1 billion mark and the 1GW mark. Compared with 2019, the total installed capacity has doubled. The new installed mainly comes from California. LS Power has completed the largest battery energy storage project in the United States and even the world in this region, with a scale of 250MW/250MWh. In addition, the state has several similar big projects in the pipeline.
The United Kingdom has taken a “significant, positive and timely” step in 2020. The Cabinet passed legislation to remove capacity limits for battery storage projects, allow the deployment of 50MW and 350MW energy storage projects in England and Wales respectively. This initiative open the door to the construction of large-scale energy storage projects in the UK. The largest energy storage project in the UK has already appeared. The project is located on the Thames River with a scale of 320MW/640MWh and is expected to expand to 1.3GWh in the future.
Australia , continue to replicate the successful experience of the Hornsdale 100MW battery energy storage project to multiple regions, including a 250MW/1000MWh battery energy storage project planned by AGL in South Australia, and a 300MW/450MWh lithium battery deployed by Neoen in Victoria Energy storage projects, and a 500MW battery energy storage project developed by Renewable Energy Partners in Queensland.
3 “Small” energy storage
Although the construction scale of energy storage projects is getting larger, the development of small distributed energy storage, especially household energy storage, has also made significant progress in 2020. More and more energy storage companies and public utility companies are paying attention to these “small” energy storage, especially the “big” value they play after they are aggregated into virtual power plants. For instance, how to control these “small” scattered in different locations Does energy storage serve the grid? Can some large power plants achieve the same effect? How much compensation do users need to be motivated to participate? Can anyone install enough “small” energy storage in a suitable area to make some money? These are all hot topics that linger in this field, and the capital market has also shown its preference for virtual power plant projects. These flexible “small” energy storage are being transformed into an investable infrastructure. In 2020, many companies will Actively lay out this business.
- Sunrun, the leading optical storage system supplier in the United States, has installed more than 13,000 sets of household energy storage systems, and is cooperating with Southern California Edison to study the value of virtual power plants in the greater Los Angeles area.
- Green Mountain Power currently controls 2,567 Tesla’s Powerwall home energy storage systems, with a flexible capacity of 13MW, Saved the company more than $3 million by reducing power consumption during peak hours.
- The aggregator Swell Energy received US$450 million in financing from Ares Capital Management ,for the installation of 14,000 home energy storage systems in order to fulfill the service contract signed between it and the utility company.
- Generac, a leading company in home backup power supply, acquired Enbala, a developer of distributed resource software control, to enter the home energy storage market and take a share in the virtual power plant market.
4 Long-term renewable energy
In recent years, lithium-ion battery renewable energy technology has been growing rapidly. According to the statistics of the CNESA global energy storage project database, the compound annual growth rate of lithium-ion batteries in the past five years (2015-2019) is 85%, as of September 2020. At the end of the month, the cumulative installed capacity of lithium-ion batteries reached 9.8GW. Accounting for 90% of the electrochemical energy storage projects that have been put into operation, occupying an absolute dominant position. But judging from the current lithium battery projects that have been put into operation, their The full-power discharge time rarely exceeds 4 hours , and long-term non-lithium energy storage technology has begun to enter into the public. In 2020, some government departments and energy storage companies have begun to put their long-term energy storage plans on the agenda.
- The public utility of California regulator predicts that by 2026, the state may need about 1GW of long-term energy storage.
- The California Energy Storage Association predicts that by 2045, they will need 45GW+ of long-term energy storage during the clean energy transition, which is equivalent to the current peak electricity demand in California.
- Form Energy will provide a 150-hour “water-to-air” energy storage system for a public utility company in Minnesota in 2023, and will receive US$76 million in Series C financing.
- Lockheed Martin began testing its first long-term energy storage system, GridStar Flow, with a scale of 500kW/2500kWh, with a continuous discharge time of 5 hours under full discharge and 10 hours under half discharge.
5 Low cost
lithium- ion battery packs, in the past ten years (2010-2020), the global average price of lithium-ion battery packs has dropped from US$1100/kWh to US$137/kWh, decrease 89%. Moreover in 2020, for the first time, there is a survey sample with a price below $100 /kWh, and it is predicted that the price will drop to $101 /kWh in the next three years.
Energy storage system costs, a 4-hour power station-level energy storage system in 2020 will range from 235-446 US dollars/kWh. The main factors driving the cost reduction include the cost reduction of energy storage batteries, system design optimization, increased standardization of system charging and discharging time, and increased market maturity.
Levelized cost of energy (LCOE), in 2020, the LCOE of a 4-hour battery energy storage system has reached US$150/MWh , which is half the price of two years ago. At the same time, under the condition of discharge within 2 hours, battery storage is more economical to be used for peak shaving than traditional gas-fired power stations. In addition, the U.S. Department of Energy also mentioned that in the recently released energy storage challenge roadmap, the LCOE for long-term stationary energy storage applications will reach US$50/MWh by 2030.
6 “Solar + Storage”
In the past few years, a series of solar storage projects have been announced across the United States. These projects always make the headlines because of their extremely low PPA. Starting from the $139/MWh PPA signed by KIUC in Hawaii in 2015, to 2017 The US$45/MWh PPA signed by the Tucson Power Company in Arizona, the PPA fell again and again, until the US$40/MWh PPA signed by the California Eland Optical Storage Project, creating a low record. Nevertheless, such a low PPA is still achievable, but good renewable energy conditions are required, the ratio of the total energy output of renewable energy power plants to the energy storage capacity is sufficiently high, government incentive policies, and the continuous decline in the cost of energy storage systems, etc. Specific prerequisites.
In addition, the cost of solar storage projects is also falling rapidly. According to the statistics of NREL, the cost of optical storage projects in the southwestern of United States has been lower than $30/MWh. Taking the 20MW/80MWh energy storage system as an example, the installation cost of large-scale battery energy storage dropped by nearly 40% in 2018, and it is expected that the installation cost may drop by 52% by 2030. In some areas, solar storage systems compete with traditional thermal power, natural gas power plants, and diesel power generation.
7 Safety Alarm
In July 2020, the Arizona Public Utilities Service Company released a report on the fire accident of the McMicken battery energy storage project. The cause was directly at the battery, and the attention was once again focused on the battery supplier LG Chem. After all, LG Chem was one of the main battery suppliers at the plant that caused 30 fires in South Korea. Coincidentally, in September 2020, a fire accident occurred in the 20MW Carnegie Road battery energy storage project in Liverpool, England. The batteries for this project were also from LG Chem, which undoubtedly pushed LG Chem to the forefront. In December 2020, LG Chem received five more reports of fires caused by overheating of energy storage batteries in the United States. The company recalled several specific batches based on the risk of overheating of energy storage batteries, which may cause fire or smoke.
Safety issues are still a major challenge facing the energy storage industry. Although existing standards and specifications have recognized that the spread of thermal runaway is a serious safety risk, there are no good solutions. Commercially available technologies are still needed. And design to deal with the potential risk of thermal runaway spread. In addition, these safety incidents have also sounded the alarm for the construction of energy storage projects in the current domestic low-cost competition environment. The safety of energy storage systems needs to be considered from system design, construction to operation and maintenance. If safety protection is not done well,a slightly hidden danger will eventually lead to serous accidents.
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