One of the most common objections to the transition to renewable energy is the problem of storage. Because wind and solar are unpredictable in the UK, we need fossil fuels or nuclear as backup, and there are sometimes long periods where systems have to be turned off, because there is more electricity than we can use. So, a lot of effort is going into finding storage systems, from creating hydrogen to dropping weights down mineshafts.
Until recently, battery technology, in the sense we understand them in cars and torches, seemed too expensive, and required impossible quantities of rare and expensive materials like lithium and cobalt, produced in very controversial conditions. But battery technology is now advancing at pace, prices are coming down, and with them, the possibility of reshaping the global economy.
Changes incoming
Recently, Marek Kubik, a British/Polish energy-storage specialist, was interviewed about this rapidly changing battery-storage landscape. He suggests that today’s market leaders, technologies and cost assumptions may soon be overtaken by new competitors. The sector has been transformed by intense competition, falling prices, changing battery chemistries and increasingly sophisticated system designs.
However, the speed of change makes the future shape of the industry difficult to predict: companies that appear dominant today may lose their position within a few years, just as earlier market leaders have already disappeared.
The global sunbelt
One of the clearest examples of rapid growth is the Middle East. Saudi Arabia, which had no grid-scale battery storage at the end of 2024, now has as much as the UK: approximately 18 gigawatt-hours, with a further 24 gigawatt-hours in the pipeline. Similarly, the United Arab Emirates is building a major 19 gigawatt-hours solar/battery project, to provide renewable electricity around the clock.
This expansion is explained by its combination of abundant land, intense sunlight and relatively consistent solar conditions throughout the year. Solar panels in the desert generate more electricity per square metre than they would in northern Europe, and the limited seasonal variation reduces the amount of storage required to balance supply across the year. As a result, batteries of roughly six to ten hours’ duration may be sufficient to make solar power round the clock competitive with fossil fuels and nuclear power, while being much faster to build.
Battery prices
Battery prices have fallen dramatically. Since 2022, the cost of a grid-level battery energy storage system has declined by roughly two-thirds.
However, the downward trend may not be entirely smooth. A kilogram of lithium carbonate, a key battery material, now costs a third of its 2022 price. But innovation continues to reduce the cost per kilowatt-hour.
Changing chemistry
Batteries to store energy for the grid are very different from those needed in vehicles. Car batteries use nickel-manganese-cobalt (NMC) because size and weight are critical. But for storing power at grid level those factors are less important, and most grid storage uses lithium iron phosphate (LFP), which uses cheaper and more readily available materials, offers longer life, which matters for large batteries which may be cycling daily for 20 to 30 years.
But Kubik argues that the next major disruption will come from sodium-ion batteries. Sodium-ion is safer, more tolerant of extreme temperatures, and has a longer life cycle. This makes it particularly attractive for stationary storage, where the physical size of a battery is less important than in vehicles. It is also much cheaper because sodium is abundant worldwide, and it avoids using lithium, nickel and cobalt, which are often produced in very poor labour conditions. Domestic scale sodium-ion batteries are already arriving on the market.
The industry’s competitive structure is changing alongside its chemistry. At one stage it was dominated by Korea, with LG Chem and Samsung using NMC technology. But China has moved to LFP, and there are now more suppliers, offering different technologies and combinations of manufacturing and system development.
Container design
Grid-level storage is usually based on units in standard 20 foot containers. Each once held about five megawatt-hours, but they are now approaching eight. Manufacturers are experimenting with modular systems, on-site assembly and taller stacks. These changes can reduce the costs of land, foundations, cabling and installation.
One critical issue is the cost of servicing. A low-cost battery is not a good investment if spare parts, local engineers and technical support are unavailable. With battery systems expected to operate for more than two decades, it is important that there are reliable warranties and accessible service teams backed up with local storage of replacement parts.
Future technologies
Kubik is sceptical about some alternatives currently under discussion, like flow batteries, iron-air systems, compressed air and carbon-dioxide storage. But other technologies may find specialist roles, especially for data centres requiring reliable power without a grid connection.
Kubik’s strongest prediction is that sodium-ion will eventually play a larger part, first in cold or hot climates and other specialised applications, before competing more broadly on total lifetime cost rather than initial capital cost.
The wider message is that grid-level battery storage is already economically viable, is growing rapidly and is still far from technological maturity. For some time to come, we can expect to see and industry evolving through innovation, competition and changing system needs.
The good news is that these developments are already overcoming the biggest challenge facing the transition to 100% renewable energy. Net zero is no longer a pipe dream
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