As the energy storage market continues to grow rapidly, 2024 is expected to be another busy year for battery storage globally. Developer and investor interest in battery storage is at an all-time high, with widespread recognition of the vital role that battery storage has to play in maximising green energy returns. We will be keeping a close eye on the following:
Price
It is anticipated that the prices of both lithium-ion battery packs and energy storage systems will continue to fall in 2024. Significant competition within the market coupled with battery manufacturing exceeding demand has driven price reductions as manufacturers look to recoup losses.
Improvements
Market competition is also resulting in continued improvements in battery technology. Prismatic LFP and large cylindrical cells are increasing in popularity and deployment, reducing the market share held by pouch cells. Other long-duration energy storage technologies continue to develop, with China leading the way.
Investor optimism and concern
Whilst investors remain enthusiastic about battery storage, regulatory barriers and near-term grid connection concerns in some jurisdictions remain off-putting. The expedition of grid connection processes will be fundamental to market expansion and access and significant targeted improvements in this regard should be a global priority.
The campaign for wider recognition of battery storage as an independent asset class – rather than a renewables subset – will continue to gain traction, with investors calling for better compensation in view of the vital service that battery storage provides whilst having a ‘neutral impact’ on the grid system.
New energy storage funding
Growth on the continent will also be in sharp focus after the European Commission launched its Innovation Fund in 2023 to fund the deployment of green energy initiatives, including battery storage and alternative storage solutions. A significant number of funding applications from across the battery storage sector are expected in 2024.
United Kingdom focus
2022 was a peak year for UK battery storage with around 800 MWh of utility-scale energy storage capacity added. Despite a downturn in 2023, we expect things to stabilise in 2024 as demand grows in line with the UK’s increasing reliance on renewable sources of electricity. The UK’s battery storage capacity is anticipated to reach 24 gigawatts by the end of the decade.
Increasing solar and wind infrastructure in the UK will require a commensurate expansion of reliable storage solutions due to the intermittency of these renewable sources. This will be aided by the Government’s decision to lift size restrictions on project planning which will likely see the size of UK battery storage projects increasing. Might we see single projects exceeding 1 gigawatt in the future?
Despite fervent optimism amongst many in the industry, and whilst billions of pounds are due to be invested in battery storage, the grid system is increasingly constrained and an acute focus on avoiding bottlenecks will be imperative, both in the UK and globally, if output is to meet its potential.
