Page 56 - North American Clean Energy May/June 2020 Issue
P. 56

    energy storage
  Wanted
Made in the USA
by Lindsay Gorrill
 THE GLOBAL ENERGY STORAGE MARKET IS ON A TRAJECTORY
to nearly quadruple its deployments from 4 GWh in 2019, to more than 15 GWh in 2024. Battery manufacturing is growing exponentially in every part of the world. Over the past few years, however, the supply chain has experienced turmoil: Battery supply shortages, virus-related factory shutdowns, and a general uptick in demand that is already difficult to meet with today’s manufacturing capabilities. We depend heavily on Chinese and South Korean battery manufacturing supply chains to deliver the majority of our energy storage. Without diversifying manufacturing locations and providers, achieving our proposed clean energy standards may be impossible.
Current manufacturing infrastructure
Manufacturing is a vital component of the supply chain. Equally important is the access to materials for battery development. China exclusively produces a number of these raw materials, giving them an especially strong foothold within the market.
The impact of limited diversity in the chain is clearly illustrated by the EV market. Almost all of the major auto manufacturers plan to roll out new EV models over the next couple of years. These will require next-generation batteries (currently produced by Chinese and other manufacturers) to meet consumer demand.
Some automakers have had to suspend EV production due to battery supply chain issues. Until battery manufacturers can scale up production to meet these demands (which may take upwards of a year), car companies are looking at dwindling revenue, as well as reduced adoption by consumers. They’re starting to realize that their continued dependency on Chinese and South Korean labor and manufacturing capabilities will restrict their ability to scale, and that they must seek innovation and partnerships at the battery manufacturing level of the supply chain.
A short timeline to meet environmental and sustainability targets
EVs are among some of the “nice to have” consumer luxuries, giving manufacturers a bit more time to ramp up production. Energy storage for industrial applications such as solar plus storage, wind plus storage, and microgrids, have a stronger sense of urgency behind them due to the changing environmental regulations, and need for stationary energy storage capable of meeting regulatory and individual utility-set targets.
Take, for example, the adopted regulations in New York State aimed at phasing out less efficient peaker plants. With such aggressive environmental goals, New York is explicitly creating new regulations to reduce greenhouse gas emissions 40 percent by 2030, and shift to 100 percent clean electricity by 2040 (implementing hefty fines where efforts do not meet the pre-determined targets).
Over the next ten years, utilities will need to have adopted energy storage into their operations to meet these targets. To scale up battery manufacturing in time, the industry must begin bringing manufacturing efforts to the U.S. immediately.
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