Introduction: In the eleventh episode of Unlocking the Energy Trilemma, Neil Weaver, Director of Research at Modo Energy, joins our hosts, Jose A. Martinez and Ravi Krishnan, who share insights into the world of grid-scale battery energy storage systems (BESS). Neil talks about the dramatic drop in costs for BESS, with prices in Great Britain expected to be half by 2028. He spoke about China’s role in driving down costs and dominating the lithium-ion battery market, as well as the emerging business models for BESS owners. He also shed some light on how long-duration storage is starting to gain ground and what it could mean for the future of energy. If you are curious about the latest trends in energy storage, be sure to tune in! Click the link above to hear the full episode.
Can you share with us a fact or figure related to the energy trilemma and about today’s topic “Battery Energy Storage Systems (BESS)”
What do you think are the reasons behind China's dominance in the lithium-ion battery value chain? What lessons can the United States learn from this approach? How does it impact the competitiveness of US battery makers?
What is the business model for a BESS owner today and what do you think will it be in the short future?
Neil, in Texas, you recently achieved a five-gigawatt milestone for battery energy storage capacity, with the last gigawatt coming from Engie's one-hour duration batteries. Considering the average duration in Texas is around 1.4 hours, where do the longer durations—like four, six, or eight hours—that are often discussed in reports and trends currently stand?
Do you believe that multiple smaller short-duration battery systems, such as four- or six-hour batteries, can effectively compete with long-duration energy storage solutions?
You've mentioned the word “arbitrage” several times, would you say running a BESS is similar to the role of a broker? How does the business respond to price volatility?
How impactful have the Inflation Reduction Act and other state-level incentives been in supporting battery manufacturing in the United States and reducing the cost of domestically made battery products? Additionally, how do you think a change in administration is going to impact state-level incentives, funding, grants, or the IRA?
Neil, regarding Great Britain, the National Energy System Operator released a report outlining the goal of achieving clean power by 2030, with projected battery storage capacity reaching nearly 30 gigawatts and an even higher amount of renewable energy. The assumption is that excess renewable energy will be used to charge these batteries. Do you think this is feasible and economically viable, not just in Great Britain, but in other regions as well, where large-scale renewable energy and battery storage models are being considered?
If you had a magic wand, what would you do to unlock the energy trilemma?