2019: The next episode
Well, 2019 is already nearly two weeks old. We’ve been looking back on 2018’s biggest challenges and successes thus far, but now it’s time to truly leave the past behind.
In today’s third and final instalment of our series to welcome in 2019, we look at what our respondents are expecting to see this year, what they would like to see happen and some of the ways they will be trying to fulfil those expectations.
Contributions have come in from Navigant Research, Fluence, Aggreko, NEC and Argonaut Power for this Editor’s Blog series.
Lithium is not the only target for cost reduction
We heard in our piece outlining some of the major challenges to the energy storage industry during 2018 that supply of lithium-ion was somewhat constrained, unless you were making batteries yourself, had very close links with major suppliers, or were based in South Korea and a direct recipient of contracts to build projects there.
Happily, Karim Wazni, managing director of Aggreko believes that as more production capacity comes online, as we continue to see around the world, we “will see a continued decline of prices as well as better availability of lithium”.
Similarly, Roger Lin, VP of marketing for Energy Solutions at NEC, said the economies of scale of lithium-ion, driven by the success of stationary storage as well as consumer electronics and EV markets, will be the leading driver of cost reduction achieved in 2019.
A virtuous circle of sorts will be fed, Roger Lin said, as the decreasing cost of energy storage leads to the uncovering of “more and more viable applications and business cases around the world – and thus the market will continue to grow”, he added.
That said, the battery itself won’t be the only driver of cost reduction by any means.
“Concomitant decreases in the cost of ‘the other stuff’ – power conversion systems (PCS), balance-of-plant, and EPC/installation costs – are becoming more important as the most expensive part of an energy storage system (the battery system) gets cheaper.
“Lithium-ion pricing has dropped over the past few years to create tremendous reductions, but [also], look for system integration advances to keep the industry on the declining cost curve’s pace,” Lin said.
Overall need for storage with renewables
Let’s take a quick look at what Roger Lin means when he says growing numbers of applications, geographies and business cases will open up as the energy storage market grows during 2019 and hopefully far beyond.