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Today's Topics:
1. Battery Storage (Stephen Loosley)
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Message: 1
Date: Wed, 18 Dec 2024 15:42:55 +1030
From: Stephen Loosley <[email protected]>
To: "link" <[email protected]>
Subject: [LINK] Battery Storage
Message-ID: <[email protected]>
Content-Type: text/plain; charset="UTF-8"
`
Battery Storage
?Mind blowing:? Battery cell prices plunge in China?s biggest energy storage
auction
By Giles Parkinson & Joshua S Hill Dec 17, 2024:
https://reneweconomy.com.au/mind-blowing-battery-cell-prices-plunge-in-chinas-biggest-energy-storage-auction/
The hottest topic in energy circles right now ? apart from dealing with the
sheer absurdity of the federal Coalition?s nuclear power plan ? is battery
storage, the plunging price of battery cells and its implications for a future
renewable-dominated grid supported by flexible capacity.
The CSIRO and the Australian Energy Market Operator earlier this month noted in
their draft GenCost report that battery storage has been the biggest mover in
the last 12 months in terms of price ? down 20 per cent from where it was just
12 months ago. An annual assessment from Bloomberg NEF supported that
assessment.
Since then, an auction in China ? the country?s biggest for energy storage ?
suggests that the price decline in battery cells, thanks to intense
competition, technology and efficiency improvements and boosted manufacturing
capacity, may be even more dramatic than that.
According to reports out of China, the Power Construction Corporation of China
(PowerChina) has attracted 76 bidders for its unprecedented tender of 16 GWh.
The bids were opened on December 4, and according to PV Mag, has attracted
prices ranging from $US60.5/kWh to $US82/kWh, with an averaging of $US66.3/kWh.
It said 60 of the bids were below $68.4/kWh.
The tender is for the supply of energy storage systems ? specifically lithium
iron phosphate (LFP) battery cells ? that will be built in 2025-2026. The
winners will be announced after another series of round that will clarify
supply chains, equipment quality and delivery ability.
The price reportedly includes a comprehensive range of services beyond the
delivery of storage equipment, including system design, installation guidance,
commissioning, 20-year maintenance, and integrated safety features.
?(These are) mind-blowing numbers,? said Marek Rubik, the founder of US-based
battery technology company Fluence, and now a director of Saudi green energy
project Neom. ?(This is) system pricing, not cells,? he wrote on LinkedIn.
This, of course, has great significance for the transition to renewables in the
main grid, and potentially the shift to EVs in the transport sector. Battery
project prices in Australia have already fallen to new lows ? albeit still at a
cost of around $A300/kWh, which would include local costs such as planning,
labour and balance of plant.
Just last week, new data from BNEF confirmed the CSIRO and AEMO estimates that
battery storage prices had fallen 20 per cent in the last year.
Its data showed that the price of lithium-ion battery packs had seen their
largest annual drop since 2017, dropping to $US115 per kilowatt-hour ? down
from $US806 in 2013 and $US144 in 2023.
BNEF cited a number of factors in the ongoing decline, including cell
manufacturing overcapacity, economies of scale, low metal and component prices,
adoption of lower-cost lithium-iron-phosphate (LFP) batteries, as well as a
slowdown in electric vehicle sales growth.
Overcapacity, in particular, is high, with 3.1TWh of fully commissioned
battery-cell manufacturing capacity around the globe, put in place ahead of
what battery manufacturers expected to be increased demand for EV batteries.
BNEF says the EV market remains the largest source of battery demand ? although
it has slowed this year ? while the stationary storage markets have ?taken
off?, according to BNEF, with strong competition across both cell and system
providers, especially in China.
?The price drop for battery cells this year was greater compared with that seen
in battery metal prices, indicating that margins for battery manufacturers are
being squeezed,? said Evelina Stoikou, the head of BNEF?s battery technology
team and lead author of the report.
?Smaller manufacturers face particular pressure to lower cell prices to fight
for market share.?
BNEF noted that the $US115/kWh price point is a global average. It cited then
that battery pack prices were lowest in China, coming in at around $US94/kWh.
The latest tender results suggest another 20 per cent reduction is already in
train.
However, BNEF noted it is unclear what the future will bring. While low raw
material prices have also helped push down costs, these prices could rise in
the next few years, with the threat of increasing geopolitical tensions,
tariffs on battery metals, and low prices stalling new mining and refining
projects.
?One thing we?re watching is how new tariffs on finished battery products may
lead to distortionary pricing dynamics and slow end-product demand,? said Yayoi
Sekine, head of energy storage at BNEF.
?Regardless, higher adoption of LFP chemistries, continued market competition,
improvements in technology, material processing and manufacturing will exert
downward pressure on battery prices.?
The China tender is part of PowerChina?s broader equipment procurement plan
that were announced on November 13. These includes 51 GW of solar modules, 51
GW of inverters, 25 GW of wind turbines, and 15,240 prefabricated 35kV
substations.
Giles Parkinson & Joshua S Hill
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End of Link Digest, Vol 385, Issue 22
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