MIT researchers were certainly onto something when they looked into the dramatic decline in costs of lithium-ion batteries, and the transformative role they can play in the global fight against climate change.
The study found that the price of lithium-ion batteries has fallen a remarkable 97% since the early nineties. In 1991, the price of lithium-ion battery cells per kWh was $7,523, but the price had reduced to $181 in 2018.
One of the main reasons that fossil fuels have been used to power our homes and industries is that they were traditionally cheaper than renewable energy sources. We’re at the stage in the present day where renewable technologies are now cost-competitive or even cheaper than new fossil fuels.
Research indicates that today, it is almost three times cheaper to build a new solar plant than it is to build a new coal one. This is incredibly promising for the sustainable future of our planet.
Why has the cost of lithium-ion batteries declined?
The primary reason for the decline in the price of lithium-ion batteries over the past couple of decades is down to innovation in the production process. As technologies become available at scale and production increases, more companies are incentivised to achieve innovations (a system known as Wright’s Law).
Simply, over the course of the past thirty years, batteries have been getting smaller and lighter for their given electrical capacity. Historically, one of the most significant drawbacks of battery technology was the fact that it was heavy and cumbersome, which limited their use in certain fields (such as in electric cars, for instance).
In the present day, lithium-ion batteries are a fraction of the cost and are smaller and lighter than those in previous decades. The technological improvements in batteries have presented them as a viable storage mechanism when it comes to renewable energy, something that bodes extremely well for the future of our planet.
Exemplifying the decline in the cost of lithium-ion batteries.
It’s all very well quoting a 97% decline in costs of batteries, but what does this look like from a consumer’s perspective? Well, let’s take the example of two of the most popular electric cars on the market, the Nissan Leaf and the Tesla Model S 75D.
The Nissan Leaf has a 40kWh battery, which would cost around $7,300 in the present day. In 1991, the same battery would have cost $300,000!
And the Tesla Model S 75D is powered by a 75kWh battery, which would cost approximately $13,600 today. The same battery in 1991 would have cost $564,000. That’s more than half a million dollars just for the battery.
It’s little surprise, then, that people in the early nineties viewed storing renewable energy in batteries as a pipe dream. But today, battery energy storage is very much at the forefront of our global transition towards renewables and will continue to play a critical role going forwards.
Why batteries are essential to the future of renewables.
Cost aside, fossil fuels have long been preferred to renewables because they produce what we need on demand. Renewables tend to provide energy intermittently, depending on the weather conditions in the case of solar and wind energy, for instance.
A solution to the intermittent productivity of renewables is to store the energy that they produce during peak hours, so it can be used when the elements aren’t favourable. In recent decades, companies have been hesitant to invest in battery storage due to the significant upfront costs.
But as we’ve already shown, the price of batteries has declined remarkably in the past thirty years, which has made battery energy storage systems much more affordable.
AceOn’s commitment to battery energy storage.
At AceOn, we’re at the forefront of pioneering battery energy storage solutions in the UK. We’re excited by the potential of battery energy storage, and we have already developed a number of partnerships across the country to launch pioneering battery energy storage projects.
For those of us operating within the industry, the decline in the cost of lithium-ion batteries presents a remarkable opportunity for the scalability and future success of renewable energy sources. We now have the perfect technology at our disposal to store renewable energy that is produced at the micro and macro level.
In short, the future of battery energy storage is incredibly exciting, and the price of lithium-ion batteries is only likely to decrease further in the coming years.
