Can the booming battery sector help Europe with its energy crisis?
- Energy storage could help Europe tackle its energy crisis but is overlooked in policies, by 2030 total storage capacity will amount to about 35% of annual average Russian gas imports. Indeed, the recent REPowerEU plan does not directly refer to targets for energy storage and, more importantly, the region does not have strong incentive for energy-storage providers or investors to ramp up their efforts – growth will be organic, indirect and slow.
- In 2021, total energy storage capacity was close to 27 GW – which is five times the level of 2015. Overall, the global energy storage market is expected to grow 15-19-fold by 2030, with cumulative energy storage capacity totaling 400-500GW. Most of this growth will stem from the US and China. Both countries have laid-out ambitious plans on energy storage which should support large grid-scale projects.
- In the short run, the energy storage market is likely to face some challenges but in the longer run, economies of scale and decreasing prices should support higher investments. Chip shortages, supply-chain issues and high lithium prices are likely to weigh on project progress and funding in the next few years. However, from a long-term perspective, decreasing costs set the stage for stronger annual capex in energy storage as costs per kWh could be slashed by -60%.
Learn more here: https://www.allianz.com/en/economic_research/publications/specials_fmo/EU-fiscal-measures.html