The Rise of Battery Storage in the Energy Transition
The energy transition industry has witnessed the emergence of battery storage as a key player in driving decarbonisation across the country. This sector, once little-known, now stands at the forefront of supporting intermittent renewables.
The Challenges Facing Battery Storage
Despite the positive trendlines, battery storage developers are facing significant challenges such as raw materials competition, newly introduced tariffs, and upcoming elections. These factors have led many developers to hesitate in fully committing to legislative provisions, impacting both business opportunities and climate action.
Navigating Instability in the Sector
To navigate the ongoing instability, battery storage companies must strike a balance between leveraging domestic incentives and ensuring supply chain diversification. Understanding global supply agreements and preparing for potential price fluctuations and tariff increases are crucial steps in mitigating risks.
The recent tariff increases on Chinese lithium-ion batteries will require project stakeholders to reassess their economics and timelines. This change also highlights the importance of increasing domestic battery supply.
The Future of Battery Storage
Battery storage capacity in the US is set to double by 2024, with nearly 15GW planned, making it the second-largest after utility-scale solar. The rapid growth of battery storage deployments surpasses that of wind energy, showcasing the technology’s momentum driven by favorable economics and governmental support.
With annual battery manufacturing expected to exceed 115GWh by 2030, competition for raw materials and equipment supplies is intensifying, leading to potential shortage concerns.
Supply Chain Risks and Rewards
The interconnectedness of the battery supply chain poses challenges, especially with fluctuations in the EV market impacting materials availability. To manage risks effectively, companies need to diversify operations and secure reliable supply chains. Selecting experienced partners is crucial for ensuring contractual performance and value.
Legislation jumpstarted the battery storage sector, and now companies must proactively diversify supply chains to mitigate uncertainty and ensure operational agility and collaboration.
About the Author
Rauni Jaskari, the director of supply management at Wärtsilä Energy Storage & Optimisation, brings over 20 years of experience in strategic sourcing and supply chain management. With a degree in industrial engineering and management, Rauni is instrumental in overseeing the strategic sourcing of main equipment direct materials and supplier development.
Read More of this Story at www.energy-storage.news – 2024-06-27 16:09:34
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