What do Biden’s EV plans mean for storage?

BY ALEX CURTIS:

Joe Biden has been named US president-elect. President Trump may not like it, and has shown he’s willing to fight in court. But Trump has to pull a rabbit out of his ‘Keep America Great’ hat to stop Biden being inaugurated in January.

Strange things can happen of course – and a US constitutional crisis would be so 2020! – but let’s work on the basis that energy storage firms will soon be working in a world with President Biden. What now?

Will the US propel itself towards a carbon-neutral utopia? Are we about to see some of the biggest changes in vehicles since Henry Ford set up the first moving assembly line in 1913? Will Biden super-charge the renewables market? That depends on how optimistic you are. He still has to get his $2trn climate investment plan past a Senate likely controlled by the Republicans and his own split Democratic Party.

The electric vehicle (EV) industry will certainly hope he can, as does the US Energy Storage Association. The ESA expects “strong support from the new administration focused on decarbonisation of the electric and transportation sectors”. But as with all manifestoes, Biden’s is long on ambition but rather shorter on how it will be done.

If we are to ascertain what Biden’s policies on EVs and renewables might mean for investors in the energy storage sector, we have to make a few predictions.

Booming EV market 

If Biden can introduce policies that spark huge demand for electric vehicles then that will mean huge demand for the batteries these cars rely on.

His manifesto commits to backing the Clean Cars for America Act that was launched in October 2019 by Senator Chuck Schumer. This aims to transition 25% of US gas-powered vehicles – or 63million – to EVs by 2030. This would get more EVs onto the roads but, significantly for energy storage, it would also get more onto driveways and turn electric vehicle batteries into a mainstream source of energy storage.

The federal government can help to make the market too.

For example, Biden has pledged to switch the US’s 500,000 school buses for EVs within five years, and also add 500,000 public charging stations by the end of 2030. In addition, he is looking to offer cash vouchers to encourage people to trade for EVs or hydrogen-fuelled cars.

This will open up investment opportunities for storage companies.

And this isn’t just journalistic speculation: we’re seeing it in the stock market. Battery companies have seen their share prices rise since the election result was called for Biden. South Korea’s SK Innovation saw its shares surge 10% the day after Biden was announced as winner, with Samsung SDI rising 5.8% and LG Chem by 1.1%.

But there will be challenges if Biden is to help commercialise storage and enable investment in the sector to flourish.

The first is the potential make-up of the Senate, as we have said above. The growth of storage goes hand-in-hand with the growth of renewables, which is likely to become more politicised with a Democrat in the White House.

The second challenge is that eternal problem for US renewables: transmission. The growth of storage will pose a new challenge for a transmission system that already incurs the ire of developers.

To fix this, Biden has committed to form the Advanced Research Projects Agency to support the expansion of grid-scale storage and make lithium-ion batteries at one-tenth of the current cost. We’ll watch that one closely.

He has also hinted at support for green hydrogen, and is reportedly looking to make former Iowa governor Chet Culver – a green fan – his head of energy.

But, as ever, it’s actions that count, and we’ll have to wait and see what the Biden administration does. Just as we did with Trump four years ago.

Trump’s four years have seen huge growth in renewables and storage that we wouldn’t have expected from his coal-friendly rhetoric. He wasn’t as bad as the renewable energy industry feared. Biden has the opposite challenge: living up to expectations from his base that are set insanely high.

It’s now all eyes on the US courts and the composition of the Senate. For the next month, electoral mathematics are still crucial.

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