New Delhi [India], April 2 : Battery Energy Storage Systems (BESS) is the biggest challenge to meet the net-zero emission norms by 2050, according to a report by BofA Global Research.
The transition to a net-zero emission world requires a complete transformation of energy systems to move away from fossil fuels toward renewable energy sources like solar, wind, and hydro.
But, solar power generation depends on sunlight, which means no energy is produced at night, and production decreases on cloudy days. The same applies to wind energy, as power generation varies depending on wind speed, leading to fluctuations in power output.
So, unlike fossil fuel power plants, both the wind and solar energy plants can destabilize the grid and cannot be turned on or off at will to match electricity demand.
The report says to achieve this, we need energy storage systems like batteries, which are crucial for grid stability, balancing supply and demand, and enabling the efficient use of renewable energy while reducing reliance on fossil fuels backups.
The IEA target of tripling renewable energy by 2030 requires energy solutions like BESS to address the issue of intermittency of solar and wind power. IEA targets renewable energy of 10,000 GW by 2030 from 4,244 GW in 2023.
But, the biggest challenge before BESS is of raw materials and recycling; there are challenges in securing these materials, like lithium, cobalt, and nickel. The EU and the US are heavily dependent on a limited number of country suppliers and, as such, diversifying supply chains becomes crucial.
The EU and US are implementing regulations to address environmental concerns and promote a circular economy, with a focus on recovering critical materials.
The EU targets 50 per cent of the lithium recovery, 90 per cent of cobalt, copper, lead and nickel from waste batteries by the end of 2027.
Asia is expected to lead the battery stationary storage capacity, and an investment of up to USD 150 billion is expected by 2030. A total of 336 companies are working in the sector, but currently the top 10 account for 61 per cent of the overall capacity.
About 200 governments agreed at the COP28 in Dubai to triple renewable energy capacity by 2030 and to double energy efficiency progress at the same time.
The global BESS market is projected to reach at least 520Wh by 2030, growing at above 21 per cent CAGR from 2024. Asia is likely to dominate the BESS market, accounting for 46 per cent of global installations.