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While the market for electric vehicle batteries is slowing down, stationary electricity storage units for power grids and residential use are soaring. According to data published by Bloomberg New Energy Finance, a significant trend has emerged with stationary batteries—a substantial segment dedicated to grid storage. For automotive batteries, the ratio was 1 to 15 in favor of the latter.
The trend is also reflected in Tesla’s results, among other companies in this sector. In the second quarter, they increased their sales of stationary batteries by more than double, selling more units and with higher capacities than automotive batteries. “There is significant growth in the market for stationary batteries due to the increased demand for grid services,” explains Laurent Bataille, president of Nidec Conversion for the EMEA region (Europe, Middle East, and Africa).
Driven by NEC, a Japanese group specializing in the manufacturing of stationary batteries, this sector could double its production capacity in Saint-Étienne. NEC announced its intent to increase its global investment to 17 billion euros to support the storage of 1 GW of production capacity in France by 2025.
Aligning with several market leaders in the storage sector, including the United States, Finland, Sweden, and Germany, there is a noticeable disparity across these markets. The growth of capacity linked to renewables has not matched the increased need for grid storage, which aims to store the surplus production from wind and solar energy when grid demand is low.
The business model is yet to be fully established. While many investments have been announced in regions experiencing high volatility in electricity prices, such as Texas and California, the regulatory landscape in France is still developing.
“The first investors have made large investments, but it’s still a nascent and highly risky market. The fluctuations in electricity prices make it hard to project,” says Pierre-Emmanuel Moreau, manager at Voltaica, which develops grid storage projects. Banks are hesitant to finance these projects without guaranteed returns from energy producers. These producers want to install these systems to stabilize prices and expect revenue from services provided to grid operators, who are willing to use them when needed.
The model remains limited but shows promise. TotalEnergies, for instance, plans to develop 2 GW of grid storage capacity by 2030. A significant investment given that the global goal is to increase this capacity to 40 GW by 2050.
This doesn’t stop Engie from joining this trend. They announced a significant increase in their grid storage projects in Europe, while France is still developing its regulatory framework.
In conclusion, while the future is promising for grid storage, much remains to be done in terms of regulatory, financial, and technological readiness before it becomes a widespread solution.