What’s Next for Battery Pricing and Supply Chains After the Madness of 2018?

by Julian Spector


March 08, 2019

Enough with the warm and fuzzies around deployment records; let's get granular on the state of global energy storage market.

The U.S. storage industry built its way to 777 gigawatt-hours of storage last year. Not enough to beat South Korea, but easily sufficient for a personal best.

Those two nations are inextricably linked via global energy storage trade. South Korea's generous incentives sparked a feeding frenzy to the tune of more than 1 gigawatt-hour installed in a year. Top-tier cell manufacturers like Samsung SDI and LG Chem, used to seeking out customers overseas, suddenly had a bevy of eager customers to serve on the home front.

The effect of this policy development was to divert cell supply out of the international market, even as the U.S. geared up for its biggest year yet.

"Because of what was happening in South Korea, a lot of the tier-one manufacturers were just supplying the domestic market," said Mitalee Gupta, an energy storage supply chain analyst at Wood Mackenzie Power & Renewables. "U.S. developers who didn’t have long-term contracts in place had a very hard time getting a hold of batteries."

And given how young the industry is, few firms besides the big players had long-term supply contracts locked down.

If it could be properly harnessed, there’s enough sunlight that falls on the earth in just one hour to meet the world energy demands for a whole year! Our whole energy problem would be solved if we could somehow find a way to harness solar energy more efficiently.

This week on Storage Plus, we're examining the immediate and long-term impacts of this perturbation of the market equilibrium. The setbacks to individual projects will prove temporary, but the heady days of 2018 have already elevated certain players in the market and reoriented attitudes around supply chains.

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