What we will see in 2018: five energy storage predictions for the coming year

Lithium-ion, flow batteries, digital grids and the blockchain all make it onto our list of predictions this year. Photo by Riccardo Annandale on Unsplash.

Lithium-ion, flow batteries, digital grids and the blockchain all make it onto our list of predictions this year. Photo by Riccardo Annandale on Unsplash.

By Jason Deign

Last year was a whopper for energy storage. Global battery manufacturing capacity announcements topped 75GWh, while Tesla built the world’s largest-ever battery plant, within 100 days.

Meanwhile China set a new record for electric vehicle sales, shifting 700,000 units in 12 months… 200,000 more than in 2016. Stationary storage continued to grow apace, from Australia to Hawaii.

And storage start-ups, long perceived as venture capital cash hoovers, suddenly became sought-after prizes for European energy giants, with Younicos, Greensmith and Demand Energy all gaining new owners.

Despite this, there was still a sense that the energy storage party was only getting started. So, what can we expect in 2018? Here are five predictions. Check back with us in a year to see how we’ve done. 

Batteries with everything

Last November we reported on a UK study that touted the idea of ubiquitous energy storage in an idealised future grid.

Whether the vision in the ReShaping Regulation paper will come to pass remains to be seen, and even if it does happen there is no guarantee of when.

But we are already seeing more focus being placed on batteries in consumer electronics, with this month’s iPhone battery scandal highlighting just how important it is for everyday devices to store energy efficiently.

With lithium-ion battery production ramping up, we expect batteries to be used for energy management in a growing range of household and office devices, from TVs to fridges. Firms are already working to get all this storage connected. 

Supply chain wars for lithium-ion

It is no secret that growing demand for lithium-ion batteries is likely to spark supply concerns relating to materials such as lithium, cobalt and graphite.

While we don’t expect any of these to run out in 2018, we won’t be surprised if more large lithium-ion battery consumers emulate Volkswagen’s failed attempt to secure long-term supply contracts from raw materials providers.

Mining companies will be rubbing their hands at the prospect of rising prices for battery materials, and this upward pricing trend could make it increasingly hard, and increasingly important, to secure long-term, fixed-price supply deals.

Closely linked to this prediction is another: if materials prices start to rise, then 2018 will finally be the year that the energy storage industry gets serious about recycling lithium-ion batteries. 

Flow batteries (sort of) go mainstream

Compared to flashy, going-places lithium-ion, the flow battery business gives the impression of being always the bridesmaid and never the bride when it comes to energy storage market share.

But as the need for longer-duration storage increases, there is a growing sense that maybe flow batteries have a place in the energy firmament, after all.

Our view is that lithium-ion, because it is key for consumer devices and electric vehicles, is too precious to waste on multi-megawatt, multi-hour energy storage plants. And flow batteries can do the job for a similar cost.

Also, the technology has now been tried and tested in the field, so it is hardly high risk. If the energy industry agrees then expect to see an uptick in flow battery installations in 2018. And maybe a few company acquisitions, too. 

Digital energy networks become a thing

Electricity network planners have traditionally prized brawn over brains, but in recent years the grid has been smartening up to deal with intermittent renewables, electric vehicles and, most recently, energy storage.

If one of the big trends in 2016 was the growing value placed on energy storage software systems, in 2018 we expect to see early trials of fully digitised electricity networks that respond intelligently to changes in supply and demand.

The endgame, which probably won’t happen for some years to come, is for this decision making to happen as near to the grid edge as possible.

Hence if you switch a kettle on the network will decide whether to power it mostly from your solar panel, your electric car battery or your grid connection, depending on what is best at that point in time. 

The blockchain loses its lustre

Blockchains could help battery storage. But probably not in 2018.

Instead, we fully agree with Gartner’s September 2017 assertion that the blockchain is already over the peak of inflated expectations and heading quickly towards the trough of disillusionment.

As of last October, there were at least 15 energy-related blockchain concepts doing the rounds. And today there is still a sense that blockchains will save the planet, even if the reality is that Bitcoin mining is more likely to kill us all.

We expect (or hope) that 2018 will see a tempering of blockchain ambitions and expectations. And given the amount of hype and money that has already been invested in this area, it could get messy.

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