BNEF – Battery prices have plummeted 87% since 2010
4th December 2019 | Commercial Energy
The global market for battery energy storage – from car-sized units to utility-scale arrays – has grown rapidly in 2019 amid falling costs, new research from Bloomberg NEF (BNEF) has found. Published on Tuesday (3 December), the firm’s latest analysis of the global battery sector concludes that battery prices have fallen 87% in real terms over the past decade, from $1,100 per kwh in 2010 to $156 per kwh this year.
BNEF notes in the research paper, entitled the 2019 Battery Price Survey, that more rapid cost reductions in real terms have occurred in 2018-2019 than any year prior. The research firm puts this trend down to increasing order sizes, largely by companies across the transport, utility and built environment sector. BNEF’s analysis shows that this order upscaling is particularly prevalent in the automotive sector, as electric vehicle (EV) ownership becomes increasingly common in markets such as China and as some of the world’s largest carmakers bolster pledges to electrify their portfolios.
With these trends in mind, BNEF is forecasting that battery prices will fall below $100 per kwh in real terms by 2024 – the date by which it believes cumulative global demand will surpass 2 Twh. As well as increasing benefits of scale, BNEF believes that the next three years will see battery manufacturing costs falling as packs are redesigned and supply chains are optimised. But it is forecasting more stark cost reductions in Asian markets than for the UK and mainland Europe.
“Factory costs are falling thanks to improvements in manufacturing equipment and increased energy density at the cathode and cell level,” BNEF’s head of energy storage Logan Goldie-Scott said. “The expansion of existing facilities also offers companies a lower-cost route to expand capacity.”
On a longer-term basis, the BNEF report states that the global battery market will be worth $116bn (£89bn) annually by 2030. This figure does not account for investment in the supply chain by corporates of governments.
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