What did we get right in our 2021 predictions?

BY RICHARD HEAP

It’s the moment of truth!

Back in January, in the first Energy Storage Report (ESR) briefing of the year, we shared ten predictions for the global storage industry for 2021.

Were the predictions accurate?

Here, in the last ESR briefing of 2021, we’ll check out how we did and award a ranking out of ten. Here goes…

  1. US storage sector braced for Biden boost: No surprises here. President Biden has given energy storage the policy boosts we predicted, including a commitment to cut energy storage costs by 90% within a decade, while also pushing for a tax credit for standalone energy storage schemes. It isn’t the boldest prediction we made, but nice to start strong. One point.

  2. Australia to remain a big-hitter with China rising fast: Australia has long been at the forefront of battery deployment, and we saw it continue this momentum with giant projects including a 3.6GWh development by Photon Energy Group and RayGen. Meanwhile, in July, China committed to 30GW of new energy storage by 2025. One point.

  3. Increasing focus on storage in the Middle East: This is where we started to go a little leftfield, as we predicted that trouble for oil and gas would lead to more storage activity in the Middle East – but it’s happening. We have seen major projects coming through in Saudi Arabia, Dubai and Abu Dhabi, as well as in the broader MENA region. This includes a 1,300MWh deal for Huawei, and a green hydrogen tie-up involving Engie and Masdar. One point.

  4. More attention and scrutiny for green hydrogen: Green hydrogen was the ‘breakout star’ of 2020 and we expected that to continue in 2021. And it did. We also saw the sector attract increased scrutiny due to its technical limitations and the questionable environmental credentials of some of its most effusive backers. However, we haven’t seen many projects achieve financial close – with Ørsted’s H2RES pilot being one notable exception – so we can only take half a point.

  5. Pure renewables firms to drive M&A activity: We said renewables-focused developers, investors and utilities would dominate M&A activity in storage this year as they continued to diversify their energy mix. The reality has been different, with most corporate M&A or investment activity driven by large diversified financial players, or by storage players, such as Energy Vault, which sought to raise money with an initial public offering (IPO) instead. This prediction didn’t stack up. No points.

  6. Lithium-ion will keep making the most of its headstart: Well, of course it did. How could it not? But the prediction went further than that, by saying that long-duration alternatives would win deals to help them to achieve commercial maturity and gain market share. This has happened – CellCube, Energy Vault and Malta are just three examples – and will continue in 2022 as well. One point.

  7. Pumped hydro portfolios to attract investor interest: Was the festive wine flowing when we boldly said that “pumped hydro [would] get sexier in 2021”? Perhaps. But we think we got this one half right. From Loch Ness in Scotland to Hawaii, we are seeing new pumped hydro projects reaching financial close as more countries and companies realise the role they can play in the energy storage mix. But we haven’t seen the project M&A deals we expected. Half a point.

  8. Floating solar and storage open asset management opportunities: We’ve seen the idea of putting floating solar panels on reservoirs for pumped hydro facilities discussed in academic circles for a few years, but in 2021 we said we would see companies waking up to the asset management potential. This has emerged with projects in nations such as Bangladesh, Lithuania, Portugal and Uzbekistan. In short, we are seeing this idea becoming reality. One point.

  9. Energy storage systems for skyscrapers: We expected to see far more discussion and debate about how batteries could best be deployed in skyscrapers in 2021, as Covid-19 had sparked soul-searching about how buildings in urban centres are used. In reality we haven’t seen much of this, as there have bigger challenges, such as simply getting people back into offices. We are seeing more storage in commercial buildings more generally, but we can’t take a point here in good conscience. No points.

  10. Electric vehicles to thrive in post-Covid world: We expected demand for electric vehicles to keep growing in 2021, supported by global policies and more tie-ups between car makers and battery companies, and it’s happening. Globally, EV sales rose 160% year-on-year in the first half of 2021 according to analyst Canalys, and there’s huge excitement about this sector going into 2022. One point.

Final score: 7/10

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