This is a fascinating update on the energy storage market and a clear indication of the transformative pace of the industry! The 40% price drop for turnkey energy storage systems (ESS) between 2023 and 2024 is a remarkable milestone, and the analysis highlights several key drivers behind this shift: Cost Drivers: The combination of raw material price declines, scaling production, and innovation at both the cell and system levels showcases how the industry is maturing. It's impressive to see how these factors interplay, especially in the context of such intense global competition. China’s Role: The $58/kWh pricing from China is particularly striking, reinforcing its leadership in cost-efficient production. This will likely continue shaping global pricing benchmarks and fostering competitive bids worldwide, as seen in the Power China tender. Positive Feedback Loops: The acceleration of long-duration BESS deployments (4h-10h systems) is a crucial takeaway. This trend not only reduces costs further through scale and learning but also supports the transition to more robust grid solutions. Next-Gen Cells: The promise of 5XX-1XXX Ah cells driving further ESS design improvements is an exciting development for 2025 and beyond. It underscores the importance of innovation as a continuous lever for cost reduction and efficiency gains. Challenges Ahead: The mention of protectionist tariffs and their potential to disrupt cost dynamics in markets like the U.S. serves as a reminder that policy decisions still have a significant impact on the global energy storage landscape. This level of cost reduction not only makes ESS more accessible but also accelerates the deployment of renewable energy systems. It's clear we're entering an era where energy storage plays a pivotal role in shaping the future of sustainable energy systems. Looking forward to seeing how these trends unfold and impact global energy transitions!
Energy Storage Aficionado | Director at ENOWA, NEOM | Ex-founder Fluence | Forbes 30 Under 30 Alum | Futurist
The price of turnkey #energystorage fell 40%(!!!) from 2023 to 2024 according to the latest BloombergNEF cost survey. (Graph via Isshu Kikuma with some additional analysis / commentary from me below) 🥊 The factors that have influenced this major drop are varied - raw material price declines, production scaling, innovation at both cell and AC/DC block levels and intense competition have all played a role 🥇 Putting the drop in context, this is the largest single-year decline since the cost survey began in 2017 📉 Further, albeit more modest declines* are likely for 2025 as production scale-up and innovation will continue with designs around next-generation 5XX-1XXX Ah cells offering further ESS-level design improvements. ⚖️ Oversupply and intense competition effects are likely to remain for the foreseeable future due to slower EV growth. 🔑 The pricing that BNEF reported in this graph is for turnkey ESS, but not a turnkey EPC - excluding grid connection scope, installation, EPC etc but includes DC/AC block #batteries, PCS, MV skid and EMS 🇨🇳 As multiple sources have reported China leads the world with ESS prices as low as $58/kWh, with no tariffs and minimal shipping logistics costs and compressed margin expectations. These align well with the low bids in the recently reported 16GWh Power China tender) and an average price of around $100/kWh 🔄 An interesting factor to watch is the positive feedback loops such a drop creates - long-duration BESS systems are disproportionately benefited so we can expect a greater amount of 4h-10h systenm deployment pulled forward, which will accelerate GWh deployment figures that yield further learning rate improvements. *Protectionist tariff increases aside (in the US context)