The deployment of lithium-ion batteries will grow by 55% a year over the next five years, according to a new report from GTM Research.
That growth rate translates into an eightfold expansion of li-ion deployments, from 2 GWh in 2017 to 18 GWh in 2022.
- Most of the li-ion deployments will occur in the Unites States, followed by China, Japan and Australia, the authors said.
Li-ion’s growth is the result of several, related trends, the GTM analysts said. There has been a massive build-out in li-ion manufacturing capability in order to meet demand for electric vehicle batteries. That increase in so-called giga factories has aided economies of scale and reduced battery production costs.
Meanwhile, manufacturers are embracing new technological advances that help increase the energy density of batteries. Thirdly, used EV batteries will supply the market with another source of cheap batteries, said the report authors, GTM energy storage analyst Mitalee Gupta and Ravi Manghani, director of energy storage at GTM.
Several energy experts expect that energy storage will continue to build on its recent momentum. The U.S. energy storage market recently hit a landmark, reaching 100 megawatt-hours of grid-connected energy storage deployments in the fourth quarter of 2017, according to a GTM Research-Energy Storage Association report.
One of the factors driving the growth of energy storage is that more utilities are including the technology in their planning process.
In the new GTM report, Gupta and Manghani see lithium-ion battery pack prices falling 82%, from $219 per kWh in 2017 to $39 per kWh in 2040. That should drive further growth in energy storage installations, they said.
The authors noted that the cost of energy storage has to date limited its use to specialized applications on the grid, but as costs fall, they expect to see a wider range of use cases become attractive.