Story of the month
The development of energy storage is a prerequisite for the continued large-scale deployment of renewable energy. While solar and wind are seen as key technologies in the low-carbon energy transition and the electrification of the economy, managing their volatility remains key to success. While in 2023 only 3% of renewable capacity included storage, this share will rise to 12% by 2030. As a result, according to the International Energy Agency (IEA), the market for energy storage systems (batteries, integration systems and energy management systems) will grow by an average of 30% per year until 2030.
A CRITICAL ROLE IN ELECTRIFICATION
Now that the average cost of renewable energy (solar and onshore wind) is competitive with fossil fuels, ensuring continuity of supply is becoming a major challenge for widespread adoption. In many sectors (industry, transport, buildings), continuity of energy supply is essential, regardless of the time of day or weather conditions. Some technologies for long-term storage (more than 12 hours) have existed for a long time (mechanical storage using hydraulic pumps, chemical storage using hydrogen), but they are still reserved for specific applications (mainly industrial). The electrification of applications is now creating a strong demand for shorter storage periods, averaging 2 to 4 hours (mobility, domestic electrical appliances). The preferred technology is electrochemical storage based on the use of batteries. In 2023, new solar and wind power capacity installed worldwide increased by 23%, and their average growth rate is expected to reach 14% by 2030. Based on this trend, these two technologies should account for between 35% and 40% of the global energy mix by 2030. Storage will therefore follow the same dynamic to ensure the stability of electricity networks and continuity of supply.
Geographically, China dominates the energy storage market, helped by a requirement in several provinces that between 10% and 20% of renewable energy capacity must include a storage system. This is followed by the major countries with strong solar energy growth: India, the United States and, to a lesser extent, Europe (particularly the Iberian Peninsula).
As with EV batteries, LFP (lithium iron phosphate) and lithium-ion chemistries dominate the storage market. Unsurprisingly, the big Chinese players dominate the market with a 78% share in 2023 (including CATL with a 40% share).
Although batteries dedicated to storage account for no more than 25% of their current production, this fast- growing segment is a godsend for these players, who have been hit by the cyclical slowdown in electric vehicle sales around the world.
OUR EXPOSURE TO THE ENERGY STORAGE MARKET
The ODDO BHF Green Planet fund is currently invested in two major players in the battery energy storage market:
- Samsung SDI, a South Korean group, is the world’s sixth largest player in the energy storage market, with a 5% market share. The group stands out for its development of solid-state battery technology, which offers the advantages of higher energy density (which means longer life), more flexible operating temperature (suitable for storing energy in potentially very different areas and conditions), lower risk of explosion and no use of expensive and polluting metals such as cobalt.
- BYD, China’s global leader in electric vehicles and the world’s third largest battery manufacturer, with a 12% share of the energy storage market in 2023. The group is also active in integration systems, with a 10% market share behind its compatriot Sungrow.
