Global battery demand could surge exponentially and approach nine terawatt-hours (TWh) annually by 2030, 15 times the levels seen in 2021.
According to Norway-based independent energy research and business intelligence company Rystad Energy, although global battery demand in 2021 stood at 580 gigawatt-hours (GWh), more than double 2020’s total, global supply was still able to keep up.
However, it said that is set to change in the coming years as the appetite for battery technologies in passenger vehicles and stationary storage grows significantly, straining the supply chain.
The firm said this demand projection is in line with a 1.6-degree global warming scenario and the changes required to energy systems.
Rystad said this is also unconstrained by any potential supply issues.
In terms of components, lithium-ion batteries will dominate the market this decade, although sodium-ion battery demand will materialize by 2030, it said.
The firm said passenger electric vehicles will be the most significant contributor to future battery growth, accounting for about 55% of total demand by the end of the decade.
It said demand for these batteries is expected to hit 4.9 TWh by 2030, more than 13 times higher than 2021’s comparatively tiny total of 373 GWh.
Rystad said stationary storage will be the next most significant contributor, with a projected demand of more than 2.5 TWh in 2030, 29% of the total market.
It said the need for storage is set to soar from 139 GWh in 2021 because of the more prominent role that volatile renewable energy sources will play as the world shifts away from fossil fuels.
This will increase the need for electricity to be stored when the renewable power output is high for periods when output falls, such as times when wind speeds are low as happened in Europe last year.
Rystad head of global energy Marius Foss said battery demand growth is inevitable as the energy transition quickens, but global supply will fall short without substantial investment or improvements in battery technology in the immediate future.
“Based on announced targets, battery supply will hit 5.5 TWh by 2030, meeting only about 60% of expected demand.
“Gigafactories are being built quickly worldwide, and this supply outlook will likely change.
“Still, the importance of these continued investments cannot be understated,” said Foss.
Rystad said Asia, specifically China, will dominate the regional battery demand breakdown by 2030.
It said under the 1.6-degree scenario, Asian demand will account for 41% of the global battery market, reaching 3.6 TWh.
To meet domestic and international demand, China is targeting 50% of global cell production by 2030, accelerated by the ambitious expansion plans of domestic producers such as CATL, Gotion High-Tech, and SVOLT, it said.