As the energy transition accelerates and countries and consumers strive to decarbonize, global battery demand could increase exponentially and reach nine terawatt-hours (TWh) annually by 2030, 15 times the levels seen in 2021, Rystad Energy research has shown.
This development is the result of a potential shift in the appetite for battery technologies in passenger vehicles and stationary storage, which is expected to strain the supply chain in the coming years, the analysts say.
Global battery demand in 2021 stood at 580 gigatonne-hours (GWh), more than double the total in 2020. Global supply will still be able to keep up, but this will change by 2030.
“Battery demand growth is inevitable as the energy transition quickens, but global supply will fall short without substantial investment or improvements in battery technology in the immediate future.
“Based on announced targets, battery supply will hit 5.5 terawatt-hours (TWh) by 2030, meeting only about 60 per cent of the expected demand.
“Gigafactories are being built quickly worldwide, and this supply outlook will likely change. Still, the importance of these continued investments cannot be understated,” says Marius Foss, head of global energy systems at Rystad Energy.
According to the research, this demand forecast is consistent with a 1.6-degree global warming scenario and the necessary energy system modifications.
It is also unaffected by any potential supply constraints. Lithium-ion batteries will dominate the industry in terms of components this decade; however demand for sodium-ion batteries will materialize by 2030, according to the analysis.
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Also, Rystad exploration shows that passenger electric vehicles (EV) will account for around 55 per cent of overall demand by the end of the decade, making for the most significant contributor to future battery growth. By 2030, demand for these batteries is predicted to reach 4.9 TWh, more than 13 times what it was in 2021, when it was only 373 GWh.
However, the analysis indicated that stationary storage will be the next-most significant contributor, with a projected demand of more than 2.5 TWh in 2030, 29 per cent of the total market. The need for storage is set to soar from 139 GWh in 2021 because of the more prominent role that volatile renewable energy sources will play as the world shifts away from fossil fuels.
“This will increase the need for electricity to be stored when renewable power output is high to periods when output falls, such as times when wind speeds are low wind as happened in Europe last year.
“Repurposed EV batteries are a viable option for stationary storage, but they will only start to play a significant role from 2040 onwards with enough depleted EV batteries only available by then,” it noted.
Light to medium-heavy commercial vehicles will mainly be electrified in the future, contributing about one TWh of demand by 2030. Electrified aviation and shipping will also have battery needs, but the total demand from these sectors will not significantly impact the global picture.
According to the results of the study, Asia, notably China, will dominate regional battery demand by 2030. Asian demand will account for 41 per cent of the worldwide battery market, or 3.6 TWh, under the 1.6-degree scenario.
In addition, the Rystad research also indicated that over the following few years, Africa’s consumption is expected to gradually rise, before soaring by more than 350 per cent from 50 GWh in 2027 to 227 GWh just three years later.
