Can the West Challenge China's Energy Storage Dominance?
In the race towards a sustainable future, energy storage solutions play a pivotal role in maximizing the potential of renewable energy sources. In industrial-scale cases, solar farms, wind turbines, and hydro energy solutions have emerged as crucial elements in the clean energy industrial ecosystem. On a smaller scale, home energy storage solutions are becoming increasingly popular. While the competition in the energy storage market is ever-intensifying, China is emerging as a dominant force while the US and the West try to keep up. Indeed, 0.93 TWh of the US’s total electricity production in 2022 was from renewable energy sources. In comparison, a whopping 2,058 TWh of China’s total generation mix in 2020 was from renewable energy sources.
The Push for Energy Storage
With the world striving to reduce carbon emissions and transition to greener alternatives, the energy storage industry is becoming more and more prominent. For solar farms, wind turbines, and hydro energy solutions, these systems consist of containers filled with thousands to millions of battery cells. Indeed, one solar power facility in Long Beach is estimated to have 18,000 battery modules, each the size of the power plant of the Nissan Leaf. These serve as the backbone of renewable energy integration, as they ensure a stable supply of electricity even when the sun isn't shining, the wind isn't blowing, or the water flow is intermittent. Indeed, by capturing excess energy during peak generation periods and releasing it during high demand, these batteries are able to optimize the efficiency and reliability of renewable energy sources. Similarly, home energy storage systems also function in this way, though on a smaller scale.
A Rapid Growth
Over the past few years, renewable energy sources, such as solar farms, wind turbines, and hydro energy solutions, have witnessed remarkable growth on a global scale. Driven by environmental concerns, government policies, technological advancements, and increased investment in renewable energy projects, solar power generation alone increased by a record 26% in 2022. Similarly, wind electricity generation grew by 14% in 2022, becoming the second highest growth among all renewable power technologies behind solar power. Furthermore, the global hydropower capacity is expected to increase by 17% during this decade. For each of these areas, the respective amount of batteries is needed to store the energy produced.
Production and Costs Limitations
While the growth of renewable energy sources is promising, certain barriers can impede further expansion. Indeed, in terms of production, land availability, large-scale solar farms and wind turbines require vast land areas. Moreover, the integration of renewable energy sources with the existing power grid can be complex, especially in regions with an outdated or limited grid infrastructure. Additionally, project approval and permits can be time-consuming and lead to delays. However, one of the more important limitations to the growth of renewable energy is batteries. Currently, an estimated 250 million MWh of storage is needed for the United States, yet the country today has less than 20 thousand MWh of grid scale battery storage. Meeting these storage requirements will involve thousands of batteries to be sourced and produced, at a cost.
Considering cost limitations must also be factored in when looking at renewable energy expansion. Indeed, while the costs of renewable energy technologies have significantly reduced in recent years, the initial investment needed for setting up solar farms, wind turbines, and hydropower plants can still be substantial, especially when it comes to batteries. Indeed, grid scale batteries tend to cost around $700,000/MWh. For the required 250 million MWh, $175 trillion would be needed just to replace the US’s current fossil fuel generated electricity needs with wind and solar. Furthermore, where the integration of a storage solution is required, overall costs can rise. At the same time, fluctuations in the supply of raw materials and components can lead to price volatility.
China and the West
China Leads the Race
Currently, China's dominance in energy storage is highlighted by its impressive scale of implementation and the high volume of batteries deployed. The country's commitment to renewable energy adoption is evident in its substantial investment in the energy storage sector. Indeed, China is aiming to increase its share of primary energy from renewable energy sources from 16.6% in 2021 to 25% by 2030. Consequently, China has become a global leader in deploying solar farms, wind turbines, and hydro energy solutions, which necessitate an extensive network of energy storage systems to harness the full potential of these renewable sources. Moreover, China has managed to drive down the costs of batteries, with its vertical integration across the supply chain, making its energy storage solutions more economically viable on a massive scale. As a result, China’s economies of scale and lower production costs has given the nation a competitive edge in the global market. This has been backed with government support, leading to both public and private entities to invest in energy storage projects.
The West’s Response
Due to China’s already established production scale, which is predicted to continue to grow, the West cannot simply copy China’s strategies to narrow the gap in the market. While the West, and particularly the US’s, energy storage industry is witnessing significant growth, driven by the nation's immense renewable energy potential. The deployment of large-scale battery storage systems in renewable energy production is expected to double during 2023, enabling efficient energy capture during peak generation and discharge during periods of high demand. However, in the face of China's dominance in energy storage, the US has been faced with various challenges, particularly in costs and manufacturing capabilities. As a result, it has been understood that innovation is the key to closing the gap and to gaining a competitive edge in the global market.
Transforming the Energy Storage Industry with Addionics 3D Current Collectors
By fostering a culture of innovation and supporting cutting-edge research, the West aims to develop advanced and efficient energy storage solutions that can surpass the existing technologies and create new market opportunities. With the current cost of energy storage and China’s advanced manufacturing capabilities, innovations such as 3D current collectors will enable the US to be able to reduce the costs per battery produced while increasing the storage capacity. Indeed, Addionics 3D Current Collectors require less of the materials needed, is a drop-in solution that’s compatible with all chemistries, whether existing and emerging, and can be added to any manufacturing line without any further production costs. Additionally, as the technology also features an AI structure optimization algorithm, the software is integrated into the battery’s hardware to create a smart and complete solution. Consequently, producing at scale would enable important cost savings at the same time as increasing capacity.