The lithium-ion battery revolution is here and it’s powering our way into a 100% renewables future at scale. 

In 2017, the world’s largest lithium-ion battery storage system went live in South Australia. It provides backup power to 30 000 homes in a state infamous for its blackouts. The following year, Hyundai installed a similar system in the South Korean town of Ulsan. AES Energy Storage is set to complete a similar project in California by 2023. 

Kauai Island in Hawaii currently uses diesel generators as its only source of energy. The island has contracted Tesla to build a lithium-ion storage system to replace these generators with reliable solar energy storage. 

WA’s government followed suit with Australia’s first utility-scale power bank successfully rolled out in Mandurah. Residents can buy 6 to 8kWh of virtual storage for just $1.60-$1.90 per day. This is much cheaper than if they were to buy their own solar panels and energy storage units. 

In a recent deal with NV Energy, Google also set up a solar plant to power Google’s Nevada data centre. As Google is one of the most influential brands on the planet, this sets a shining example for other companies and major economies. 

“If this catches on among other climate-forward corporations, the upside could be huge,” Wood Mackenzie’s head of energy storage, Daniel Finn-Foley, said. 

He added that the energy storage sector is in the “enviable position of juggling growth game-changers from multiple directions”.

The 2020s will see energy storage at scale 

In Wood Mackenzie’s Foresight 20/20 Report, they wrote that “2020 begins with an energy storage industry transitioning from its infancy into true scale.”

The past decade has been characterised by small but significant steps towards industry and policymakers fully understanding and valuing energy storage technology. 

By the end of the 2020s, the report went on to say that the sector will benefit from more stable supply chains and mature and experienced key players. This means there’ll be even more potential for disruptive new technologies and policies than those that are in place today. 

Lux Research predicts that the energy storage market will reach $546 billion in annual revenue in the 2030s. The direction of the market suggests this is likely to be driven by electric vehicles and renewable energy. 

For now, the barrier is cost. However, we’re seeing an interesting combination of top companies willing to pay more for critical minerals and a steady production cost reduction of 2-4% annually. 

Chloe Holzinger, an Analyst at Lux, says that as soon as commercialisation of these factors occurs, it’ll be full steam ahead for secondary industries like electric aviation, battery recycling, flow batteries, solid-state batteries and thin-film batteries.

“The increased value proposition of energy storage in electricity markets will more than makeup for a slowdown in cost reductions,” Holzinger says. 

Australia’s role in the energy storage revolution 

Australia is one of the world’s top five producers of critical minerals.

That has captured the attention of the biggest tech economies in the world, including the US who is recuperating from the trade wars with China. There is huge potential for mines in Australia to swoop in on this opportunity and reap the economic rewards. 

Last year, Australia signed a deal with the US and created the Critical Minerals Strategy to join in on research and development for critical minerals to the US economy and that of the world at large. This could add tens, if not hundreds, of billions to the economy. 

The Former Minister of Resources and Northern Australia, Matt Canavan, has said that Australia could become the “international powerhouse in the supply of critical minerals”.