2017 is beginning to look like the breakout year for utility-scale batteries and other ways to save electricity in bulk, as a growing number of U.S. states mandate storage targets for their utilities and battery “gigafactories” spring up from Europe to Asia.
New York became the latest state to set a capacity target for energy storage in its jurisdiction, reports InsideClimate News. In a bill awaiting Governor Andrew Cuomo’s signature, the state legislature has asked its Public Service Commission to set storage targets for utilities by early next year.
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“Anyone in the business knows storage is critical to making intermittent [renewable] energy a reality,” said Westchester Assemblywoman Amy Paulin, who co-sponsored the bill.
New York joins California, Oregon, Massachusetts, and Nevada in mandating the creation of utility-scale storage. The states’ targets vary, and New York’s legislation, like others, leaves the type of storage open. “The only criteria is that it be the best available and most cost-effective technology,” InsideClimate notes. “The objectives are clearly to create more reliability in the system to support zero-carbon energy sources.”
California has directed its utilities to install 1.35 gigawatts of energy storage. Massachusetts mandated 200 megawatts by 2020, while Nevada is currently writing standards.
There are numerous technologies available to satisfy those mandates, from compressed air, to pumped hydro, to rolling trains up and down hills. But industry clearly anticipates that lithium-ion batteries are likely to constitute the backbone of many utility energy storage strategies. With that in mind, at least 10 and possibly more than a dozen battery gigafactories are on the drawing boards in various countries around the world.
“Half a dozen have been planned in the last month alone,” asserts Greentech Media, which arrived at the number. China alone expects to have 120 gigawatt-hours per year of battery manufacturing capacity installed by 2021. Germany’s Daimler has plans “for a US$550-million plant designed to take [the company’s] annual lithium-ion battery production from its current level of 80,000 units up to around 320,000.” Thailand’s Energy Absolute “has plans for a $2.9 billion factory in Asia, with annual production capacity of a gigawatt-hour per year, scaling to 50 GWh a year by 2020.” Other investors are planning battery gigafactories in New York, Australia, Sweden, Hungary, and Poland.
Meanwhile the originator of the gigafactory concept, Tesla’s Elon Musk, has hinted that his company may announce construction of as many as four new plants this year, in addition to the original model near Reno, Nevada.
But all of that activity is unlikely to produce an oversupplied battery market down the road, Greentech argues.
“Unlike [photovoltaic solar panels], battery raw materials are rare metals that have to be mined and processed, minimizing [the] risk of supply glut,” said GTM Research’s Ravi Manghani. “While some individual vendors may see massive cost step-downs as facilities are activated or new-generation products with superior density are launched,” he added, “on a macro level, [price] declines are going to be much more gradual.”
