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ES market to mark next clean energy

Saudi Arabia, July 28, 2019

JEDDAH — Energy Storage (EV) to herald next clean energy phase, 50% cost reduction by 2025 vs 2018, Bank of America Merrill Lynch’s Thematic Investing report disclosed.

Four reasons why Energy Storage will win:

• Falling electric vehicle battery costs to help deliver affordable energy storage: Electric vehicle battery costs are expected to fall significantly, helped by scale from electric vehicles. Battery packs used in electric vehicles (EVs) can be used in ES, too (in different configurations), so ES system costs should also fall significantly, increasing affordability. Lithium batteries are expected to be the mainstay in ES/EV (core to our ES theme) but long term, there could be other breakthroughs like graphene capacitors, flow batteries or hydrogen storage.

• Cheap and abundant wind + solar will require energy storage: Wind and solar are now cheaper than fossil fuels in many locations and costs keep falling. Economics and policy support a faster transition to renewables, and ES fits perfectly with this, thanks to its ability to absorb excess renewables, meet peak demand and stabilize the grids.

• Government energy & climate policies to support energy storage: Some US states are embracing energy storage with long-term targets, allowing energy storage to bid vs. fossil for peak and approving plans to replace fossil with renewables + energy storage. Such policies are likely to spread to global markets, especially in regions with a high share of renewables.

• Economics and consumer/corporate mind-sets to favour energy storage: Household/business consumers can lower their energy bills with energy storage (especially as system costs fall) and consumers are progressively favoring clean energy and self-generation (good fit with energy storage). Energy companies are embracing energy storage over fossil fuels.