VINACHEM

As cyclical renewable energy sources like solar and wind dominate new energy installations due to their rock-bottom prices, battery energy storage system (BESS) installations have also increased in step, driven by falling battery prices, supportive policies, and increased electricity market volatility.

The International Energy Agency predicts the world will add more than 5,500 gigawatts (GW) of new renewable energy capacity by 2030, with solar power alone accounting for 80% of that growth.

The European market for batteries to support this increase is expected to expand by 30–40% per year according to SolarPower Europe, with Germany in particular projected to install 136 gigawatt hours (GWh) in BESS by 2045.

A study by leading German institute Fraunhofer forecast an even greater increase, predicting 178 GWh of battery storage to be installed by 2040.

Australia follows Europe in battery uptake

A study by Bloomberg New Energy Finance (BNEF) has revealed Australia is on a similar trajectory, predicting an eight-fold increase in installed BESS capacity from 2.3 GW in 2024 to 18 GW by 2035.

The impending closure of coal-fired powerplants, increased renewable generation, and government initiatives including the Capacity Investment Scheme (CIS) are the key elements driving the uptick in battery installations.

The Federal Government’s CIS scheme is targeting 82% renewable electricity by 2030, with 32GW of capacity, and has invested more than $65 billion in the initiative.

According to the report’s author, BNEF Australia senior associate Sahaj Sood, the battery boom is here to stay regardless of the outcome of the upcoming federal election in May.

“The election is set to be a referendum on Australia’s pathway to a low-carbon power sector,” Sood said in the report.

“A win for the incumbent Labor Party would see continued support for renewables, and the batteries to integrate them.

“A win for the Coalition would see the emphasis shift toward nuclear, a potential lifeline for some of the country’s aging coal fleet.

“Either way, batteries will be required to balance Australia’s volatile power markets.”

Batteries are also benefiting from increased arbitrage revenues – which hit a record A$165.4 million in 2024, three times that earned in 2023 – and investor confidence, despite political uncertainty ahead of the election.

Large-scale batteries are set to play a central role in the continued energy transition both in Australia and abroad, as technologies advance, costs decline, and the economic and social benefits of a decarbonised energy grid become increasingly more apparent.   – Source: Mining