Current Global Expansion of Stationary Battery Storage
Compared to the required storage energy capacity in the future, today’s already commissioned fleet of battery energy storage is minuscule. Around 25 gigawatts of grid-scale BESS capacity is installed world-wide today. Most analysts (see IEA, BNEF, LCP Delta) expect a very sharp increase in global BESS capacity already within the next few years. Until 2030, Bloomberg New Energy Finance expects to see a 15-fold growth of battery storage deployment (utility-scale and residential combined), reaching 411 gigawatts. The IEA even expects a global fleet of 680 GW of battery energy storage until 2030 in its Net Zero Scenario. This would mean that battery energy storage would pass pumped-hydro (today at 160 GW) as the primary flexibility option world-wide very shortly.
Most of the new BESS installations are currently commissioned in China, the US, and Europe, with South Korea following suit.
A Closer Look: The Situation in Germany
As of 1 April 2023, 7.1 gigawatt hours (GWh) of battery capacity from around 675,000 stationary systems (i.e. excluding battery capacity in electric cars) were reported in the Federal Network Agency's “market master data register” in Germany. The addition of new battery storage capacity has been increasing sharply since 2019: as of 1 April 2019, just over 1 GWh of stationary battery storage was reported. In four years, the available storage capacity from stationary batteries in Germany has thus increased sevenfold. By way of comparison, the capacity of all German pumped storage power plants is now around 39 GWh.
The vast majority of German stationary storage capacity - almost 80% - does not come from large-scale storage, but from home storage with a storage capacity of up to 30 kilowatt hours (kWh). However, the share of large-scale storage has been increasing in recent months. Over 98% of stationary battery storage relies on lithium-ion technology.
Now let's get out the crystal ball: How will the deployment of BESS in Germany unfold? Before we try to identify the drivers and obstacles of the rapid and mass scaling of stationary storage, we should know the target for the ramp-up of the technology. As said before, this is almost impossible in a dynamic project like the energy transition, which is subject to strong political and macroeconomic volatility (pun intended) and which also takes place in a liberalised energy market that knows no planned economic parameters. The scientists at the Fraunhofer Institute for Solar Energy Systems nevertheless attempted to do this in the study mentioned at the beginning of this article on the basis of mathematical modelling and came to the following conclusion for battery technology:
"Another important element of flexibilisation is stationary battery storage, for which an installed capacity of between 50 GWhel and 400 GWhel in 2050 results for the different scenarios."
A linear continuation of the growth path taken since 2019 in the expansion of stationary electricity storage would thus just achieve the lower of the two targets listed in the study. After all, that’s not too bad. As we know from other areas, such as photovoltaics, the penetration of a new technology after a certain inflection point no longer progresses linearly, but exponentially. Particularly due to the sharply falling costs of lithium-ion battery storage, it can be assumed here, too, that growth will be exponential and, incidentally, obviously already is. Reaching the target of 400 GWhel thus does not seem utopian.
Other reasons that may hinder the rapid scaling of a new technology are
• lack of available land/locations
• lack of grid connection
• lack of regulation
• lack of investment/refinancing
• lack of resources
Only the last point - the availability of the necessary resources for the construction of battery storage on a large scale - is still causing headaches for the experts. The other points listed can either already be ignored today (the NIMBY phenomenon is not known for stationary storage, at least not so far) or are subject to constant change anyway, which has not slowed down the introduction of the technology so far.
It is not surprising that the consultancy Wood Mackenzie, for example, predicts a twenty-fold increase in capacity from large-scale storage in Europe by 2031 alone. For the German market, too, researchers continue to assume strongly growing capacities, both in the residential and utility-scale storage sector. The current drivers of this development are high electricity prices, which can be dampened by the use of battery storage in households, but also in commerce and industry, especially by increasing self-consumption of self-generated solar power. In addition, spreads, i.e. the differences between particularly cheap quarter hours and particularly expensive quarter hours, can be used in intraday trading on the spot exchange to operate large-scale storage systems economically.
Benefits of Stationary Battery Storage for the Electricity System
Stationary electricity storage systems are ideal for short-term storage of electricity - not for seasonal storage over weeks or months. For optimal economic efficiency, stationary batteries should not hold the stored electricity for too long. They usually have one to two full cycles per day. This means that they are fully charged and discharged once or twice a day. Accordingly, it is the extremely short-term electricity markets where battery storage is already refinanced today.
These include the primary control reserve market (FCR in Europe) as well as the secondary reserve market and the spot markets of the electricity exchange. It should be noted that it is not only utility-scale stationary storage systems that participate in these markets, but also residential storage systems. Battery systems are therefore already successfully contributing to keeping the power grid stable through frequency regulation and cushioning power fluctuations from solar and wind power. The volume of new battery projects already announced worldwide suggests that the responsibility assumed by battery storage systems in the overall energy system will continue to increase enormously.
Other areas of application for stationary battery storage systems include hybrid systems with large-scale PV systems (via the so-called innovation tenders in Germany, for example), but also grid boosters to avoid local grid bottlenecks or even battery systems which serve as black start units.