Presentation to the KAPSARC webinar on "Utility-scale Storage: Sleeping Giant or Mirage?" on 24 November 2020

1. Electricity storage and renewables:
global cost trends and prospects
Michael Taylor
24 November 2020
IRENA Innovation and Technology Centre

2. MANDATE
To promote the widespread adoption and
sustainable use of all forms of renewable energy
worldwide
OBJECTIVE
To serve as a network hub, an advisory resource
and an authoritative, unified, global voice for
renewable energy
SCOPE
All renewable energy sources produced in a
sustainable manner
2
About IRENA
160 Members
23 States in Accession

3. Note: The Transforming Energy Scenario includes 250 Mt/year in 2050 of carbon capture, utilisation and
storage for natural gas-based hydrogen production (blue hydrogen). RE = renewable energy; EE = energy
efficiency.
Renewables, energy efficiency, electric vehicles and hydrogen can provide
bulk of necessary emissions reductions by 2050
• IRENA’s Transforming Energy
Scenario outlines a climate-
friendly pathway with energy-
related CO2 emissions
reductions of 70% by 2050
compared to current levels, with
9.5 Gt of remaining energy-
related CO2 emissions by mid-
century
• If the plans and pledges of
countries are met as reflected in
the Planned Energy Scenario, then
energy-related CO2 emissions are
expected to increase each year
until 2030, before dipping slightly
by 2050 to just below today’s level

4. • Wind power would be a major electricity generation source, supplying more than one-third of total
electricity demand. Solar PV power would follow, supplying 25% of total electricity demand.
• Power system capacity would need to grow to 20 000 GW by 2050, with over 70% of it coming from solar
PV and wind.
Solar PV and wind will lead the way in the power sector

5. The need for power system flexibility
• Flexibility in power systems is a key
enabler for the integration of high
shares of variable renewable electricity
– the backbone of the electricity system
of the future.
• Power systems must achieve maximum
flexibility, based on current and ongoing
innovations in enabling technologies,
business models, market design and
system operation.
• On a technology level, both long-term
and short-term storage will be
important for adding flexibility.

6. Flexibility needs to be harnessed in all sectors of the
energy system
Flexibility according to IRENA (2018):
“Flexibility is the capability of a power system to cope with the
variability and uncertainty that VRE generation introduces into the
system at different time scales, from very short to the long term,
avoiding curtailment of VRE and reliably supplying all the
demanded energy to customers”
» Main flexibility sources
» Generation
» Hydro, gas
» Grid
» Variable rating lines, T&D enhancement
» Smart Grids
» Storage
» Pumped Hydro
» Batteries
» V2G
» Demand
» Conventional: DSM, aggregation
» Sector coupling: Heat pumps, boilers, H2
» Market/Institutional
» Unlock flexibility/remove barriers
» Regulation needs to support flexibility
Source: Power System Flexibility for the Energy Transition, IRENA, 2018

7. 7
Multiple drivers of electricity storage
1.2 billion
without
electricity
2050
6044 GW
WindHigh shares of VRE
Electromobility
Off-grid, mini-grids & islands
8828 GW
Solar PV
965 million
Electric
vehicles
57 million
el. buses &
light duty
vehicles.
2160 million
electric 2/3
wheelers

8. The report analyses and discusses stationary electricity storage options and costs.
The focus is placed on batteries.
8
Context
Existing market and technology options
Latest performance and cost data => breakdown of costs
into components
Cost reduction potential, competitiveness of stationary
electricity storage systems for different services
Market growth in detail for electricity storage devices,
focusing on batteries to 2030

9. 9
Report coverage
13 electricity storage technologies, from five groups
Current costs and performance, projections to 2030
Stationary applications of electricity storage (12 in detail)
Electricity storage outlook to 2030 by sector and application
Online: A simple cost of electricity storage services tool

10. 10
Small-scale: rapidly falling prices
Note: Horizontal bar shows median offer price, grey range 10th and 90th percentile.
Example, home storage in Germany
66% reduction!
Source: IRENA based on EuPD Research 2018

11. 11
Cost trends for different BES technologies
Central estimates for energy installations costs (USD/kWh)
The total installed cost
of Li-ion system could
fall by an additional
54-61% by 2030 in
stationary applications
(to between
USD 145 /kWh and
USD 480/kWh)
Central estimate in 2016: between USD 150 and USD 1 050/kWh
to reduce to between USD 75 and USD 480/kWh by 2030.

12. 12
Cost reduction drivers of
battery electricity storage systems
 International transition towards
electromobility
 Increased production capacities
 Innovation
 Silicon in anode
 More durable LMO cathodes
 5 V electrolytes
 …many more
 Drivers not exclusive to Li-ion, but Li-ion batteries likely
to dominate the EV market
 Synergies in the development of Li-ion batteries for EVs
and stationary applications, make the scale of Li-ion
deployment likely to be of magnitude higher

13. 13
Main drivers: Lithium-ion

14. 14
Battery electricity storage system installed energy cost reduction potential, 2016-2030
Li-ion storage technology price decline to 2030
Economies of scale
and technology
improvements that
reduce material
needs will drive
overall cost
reductions…
…but, cost also to
decline across the
manufacturing
value chain.
Note: For typical LFP battery energy storage system

15. 15
Cost declines and performance increases
Note: prices shown are for
utility-scale stationary
applications (EV or small-scale
residential applications could
have different values)

16. 16
Electricity storage needs in the energy transition

17. Electricity storage to 2030
At the heart of the next phase of energy transition
Needed, today tomorrow and in long-term
Cost reductions and performance
improvements drive competiveness
EVs likely to dominate, so V2G potentially
very important
Different applications,
will support different storage technologies

18. www.irena.org
Electricity storage:
Facilitating the next phase of the energy
transition
The winners are customers, the environment
and our future

19. Power generation and PPA/tender databases
19
Project cost database
~17k projects
1383 GW
PPA/Auction database
~10k projects
355 GW

20. 20
Technology overview
Scope of analysis
Technology focus on
battery chemistries
more relevant to
stationary
applications
Chemical

21. Electricity Storage: Data and Cost of Service Tool
21

22. Introduction to the IRENA FlexTool
» The IRENA FlexTool is a detailed but user-friendly tool that:
» Analyses system operations using a time step that represent real
world challenges (typically 1 hour and 1 year horizon)
» Carries out long-term analyses and propose possible flexibility
solutions in a system with high VRE penetration:
generation, transmission, storage…
» Flexibility issues identified by FlexTool:
» Non-supplied energy (loss of load)
» Reserve inadequacy
» Insufficient ramp
» The IRENA FlexTool has become the only publicly and freely
available tool that performs capacity expansion and dispatch with a
focus on power system flexibility
» VRE curtailment
» Spilled water (hydro reservoirs)
» Transmission congestion

23. Total electricity storage capacity appears set to triple in energy terms by 2030,
if countries proceed to double the share of renewables in the world’s energy system.
23
Storage under “Remap Doubling”
Rapid growth of
other
technologies
beyond PHS,
increasingly
important role of
EV’s and related
technologies
15.27
11.89
4.67

24. Total battery capacity in stationary applications could increase from a current estimate of 11 GWh
to between 100 GWh and 167 GWh in 2030 in the Reference case
24
Growth of battery market
In Doubling case, battery capacity can
grow to 181-421 GWh by 2030 (at
least 17-fold growth from current
market)

25. 25
The full circle: a sustainable value chain
Source: IRENA based on Ramoni and Zhang, 2013.
Battery manufacturing and end-of-life flowsLithium-ion battery electricity storage system recycling pathways
Note: Li = lithium; Mn = manganese; Al = aluminium; Co = cobalt; Ni = nickel; Cu = copper; Fe = iron.
Source; IRENA based on Peters and Friedrich, 2017; JRC, 2016; ELIBAMA, 2014.
Source: European Commission: A strategic action plan on batteries.
Recycling to gain in importance with
deployment growth!

26. 26
IRENA FlexTool modelling process
Input data required
• Capacity mix in the expansion plans
• Key characteristics of generation
technologies, transmission capacity and
storages
• Hourly time series for load, solar
generation, wind generation, hydro
inflows
Results provided
• Dispatch of power plants, power
system costs, emissions, …
• Possible flexibility issues
Type of flexibility issues checked
• Loss of load (insufficient capacity)
• Loss of reserves
• Insufficient ramp rate
• Curtailments of VRE generation
• Spilling of hydro power
• Transmission congestion