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27 February 2020

Wood Mac offers halfhearted numbers for energy storage

In what is not so much a forecast as an article, leading energy analyst group Wood MacKenzie said this week that the global energy storage market would grow from approximately 4GW of annual deployments in 2019 to more than 15GW in 2024.

Alarm bells went off with us immediately. Surely it meant 15 GWh, and surely wasn’t that way too low? After a frantic back and forth between us and the press office they refused to bend – “We checked with the analysts, it was from 4 GW to 15 GW, now leave us alone.”

So we have to guess what it means, which is likely that it is enough storage to drive a capacity of 15 GW of output at any point in time, up to a period of 6 hours – a typical US storage requirement. Despite this being a global forecast, it has couched this report, as it does in so many of its outputs, in purely US terms. So we assume that this is a forecast of some 90 GWh really during 2024, but as we said, we had to guess.

Daniel Finn-Foley, Wood Mackenzie Head of Energy Storage points out all the usual suspects, costs have fallen, clean energy targets are proliferating, and vertically-integrated electricity providers are beginning to recognize the potential of energy storage.”

The problem we have with this is that the pipeline for energy deals is significantly larger that this. If you take in Vanadium Flow pipeline, ETES, Liquid Air, and Sulfur Flow you have more than this and that’s without the dominant technology of Lithium Ion. In our forecast for grid connected batteries from last year we forecast numbers with slightly higher capacity, fewer hours per installation, but a more rapid growth curve later, to put it above the Wood MacKenzie numbers at the end of this forecast, although ours went out to 2030.

But we forecast less requirement per installation in different countries and in different circumstances and explained it clearly throughout the report and did not treat every installation as if it was in the US. We also did a rough count of Lithium Ion manufacture, scaled it over ten years, compared that to EV forecasts throughout the world, and looked at whether or not there was enough capacity left over to fulfill this level of grid connected energy storage, and there was, with not too much left over.

We suspect that our numbers, which did NOT include a pipeline for non-Lithium Ion technologies will be beaten substantially by reality, making Wood Mac’s laughable low.

Though Finn-Foley did isolate one trend, which is the idea that oil companies which own the energy that drives transport, will make their moves on battery makers and Cited the fact that Total and automaker Opel announced a collaboration on electric vehicle cell manufacturing investing $5.5 billion in up to 47 GWh of manufacturing capacity. Of course that deal had not happened when we wrote our forecast, as it happened in late January.

He also said that “companies like Microsoft, Google and Facebook have blazed a trail for scores of companies seeking to shrink or eliminate their carbon footprints,” which is of course true, adding that the Google deal with NV Energy for solar-plus-storage to power data centers was a pioneering deal, and again a January deal just a few weeks old. And he highlighted behind the meter storage around the world and especially in California around the wildfires there, funded through the new self-generation Incentive Program.