Kevin Brundish, CEO at AMTE Power, discusses how investment is needed in the energy home storage market to support a low-carbon economy, and meet demand within the renewable energy sector.
The importance of the storage market will be increasing exponentially in the next ten years, with energy storage installations around the world expected to reach a cumulative 58GW (1,028GWh) by the end of 2030, 20 times larger than seen last year. In the UK, energy storage projects that have planning approved will reach a cumulative 10.5GW capacity.
This boom in the energy storage market is critical to support the growing demand for renewable solar and wind-led energy. Countries worldwide are coming together to achieve net-zero emissions by 2050, as outlined in the 2015 Paris Agreement, and consumers are more inclined towards purchasing sustainable energy. 40 per cent of consumers under 35 are willing to pay a premium price for green energy. Solar prices have already dropped by approximately 90 per cent, and wind by 55-60 per cent, compared to ten years ago, with installation costs of energy storage systems expected to decline by up to 66 per cent by 2030. These factors point towards the need for large-scale investment within the energy storage market.
In the UK, public funding within the sector has dramatically increased since 2007. Such investments have driven innovation within the market, particularly towards rethinking traditional energy storage approaches and developing cells and solutions that address demand outside of the automotive industry faster. Large battery storage systems are needed to support towns, cities, and other remote communities, and help the grid transform. In these particular areas, renewable sources cannot generate energy continuously, as they are climate dependent and therefore cannot produce the energy in the wrong conditions and at a steady pace, so efficient management and storage of renewable energy is an essential building block of our future energy mix.
With the increasing awareness around sustainability and decarbonisation, companies and consumers alike are shifting their focus towards green energy, primarily dependent on weather conditions. While this shift is admirable, it has brought new problems that cannot be solved with old solutions. For example, since renewable energy sources are not producing a constant energy flow, traditional grids, designed to operate with a steady and consistent flow of power, are not designed for these peaks and troughs of supply. By contrast, energy storage products support load balancing, ensuring that variable energy generation profiles are optimised and managed correctly. With Ultra Storage and Ultra Safe, we are trying to meet the growing demand for such solutions in a number of these markets, including home energy storage, to help enable the transition to Net Zero.
Unfortunately, when it comes to energy storage solutions and cell production, the focus has been largely on the automotive industry. Now, with an acceleration of demand in renewable energy generation and grid storage, there is a gap developing between demand and offering within the energy storage market. This, in turn, places more pressure on the cell manufacturing industry and adds further pressure to accelerate a developing supply chain, where demand for raw materials such as lithium becomes more acute. The price of lithium has gone up by 276 per cent since the beginning of 2021 due to its growing demand. It is expected that, globally, lithium demand will reach an estimated 1.8 million tonnes by 2030. We believe that building new supply chains and chemistries specifically for the home storage market will be key in meeting demand.
There is an increased focus on the use of safer chemistries in the home storage market, including a move to Lithium Ferro Phosphate, a safer and cheaper lithium chemistry which our joint venture in Australia is focused on. Sodium-ion batteries could become a transformational product within the battery market because they could be safer and more cost-effective than lithium-ion chemistry. The safety of home energy storage applications in warmer environments means that cells created with this market in mind need to have secure thermal structures, and appropriate management systems built into the energy storage products. Safety is important to us, and we are bringing the Ultra-Safe cells to market with this in mind. The batteries can operate in a broad temperature range of between -20°C to +60°C.
The home storage market will play a big part in supporting the global green agenda. Sodium-ion cells have the potential to be a major part of the solution for green energy. The performance benefits of sodium-ion chemistries offer opportunities for improvement in decarbonisation technology. Furthermore, such home storage cells are low-carbon heat sources and help generate cleaner renewable energy. Bloomberg estimated installations of such batteries will rise from 6GWh in 2019 to 155GWh annually by 2030, so the demand and potential for innovation is there. Earlier this year, by entering a partnership with UK BIC, we are demonstrating our cells can be manufactured at the same production speed as seen in gigafactories. Therefore, our battery production rate will support the expected demand in the home storage market. In addition to this, we have plans to build a UK manufacturing facility with an initial capacity of 2GWh per annum.
Looking into the future, more needs to be done within the energy storage sector to achieve global and national low carbon and net zero goals. With only five per cent of the energy used to heat our homes today coming from low-carbon sources, and massive growth expected here in the next 15 to 20 years, there is a clear need for innovation within the home storage market. The Green Industrial Revolution is here, and by focusing on the home storage market, we can meet renewable energy demands responsibly and meet the obligations of global environmental policies.