By Jeff McMahon
The global energy transition is happening faster than the models predicted, according to a report released today by the Rocky Mountain Institute, thanks to massive investments in the advanced-battery technology ecosystem.
Previous and planned investments total $150 billion through 2023, RMI calculates—the equivalent of every person in the world chipping in $20. In the first half of 2019 alone, venture-capital firms contributed $1.4 billion to energy storage technology companies.
“These investments will push both Li-ion and new battery technologies across competitive thresholds for new applications more quickly than anticipated,” according to RMI. “This, in turn, will reduce the costs of decarbonization in key sectors and speed the global energy transition beyond the expectations of mainstream global energy models.”
RMI’s “Breakthrough Batteries” report anticipates “self-reinforcing feedback loops” between public policy, manufacturing, research and development, and economies of scale. Those loops will drive battery performance higher while pushing costs as low as $87/kWh by 2025. (Bloomberg put the current cost at $187/kwh earlier this year.)
“These changes are already contributing to cancellations of planned natural-gas power generation,” states the report. “The need for these new natural-gas plants can be offset through clean-energy portfolios (CEPs) of energy storage, efficiency, renewable energy, and demand response.”
New natural-gas plants risk becoming stranded assets (unable to compete with renewables+storage before they’ve paid off their capital cost), while existing natural-gas plants cease to be competitive as soon as 2021, RMI predicts.