A battery obsession has taken root and grown over the past few months in Brussels, as the EU wakes up to the fact that it may be lagging behind in the global energy storage race. From FP9 to life-cycle emissions and environmental footprint, to conflict minerals and sustainable sourcing – batteries are all the rage in many policy proposals and initiatives currently being discussed in Brussels. We will try to shed some light on the EU’s sudden obsession with this technology – and what is going on.
What’s going on?
Batteries have been around for decades. The main difference with today’s technology is scalability: from electric vehicles to home storage systems and industry-scale electricity assets, batteries are revolutionising sectors which had stayed relatively static for years. They have the potential to overhaul the way electricity markets operate, to genuinely propel the EU’s energy transition forward and to slash emissions in transport – with invaluable health and climate benefits. There is a clear business case for mass production.
This is why global powers are investing so heavily in the technology, with China’s pipeline of battery plants set to triple the production of the rest of the world combined. It’s no surprise that the EU is seriously upping its game. In October last year the Commission announced the launch of an EU Battery Alliance, whose sole purpose is to boost the EU’s home-grown battery industry. Commissioner Sefcovic further stated that the EU’s battery market could be worth around €250 billion per year by 2025, with production needs from between ten and twenty Giga factories.
Another major trend is the need to look at batteries over their lifetime, and not focus solely on their technological applications. This opens a whole series of debates about sustainable production (are electric vehicles better than internal combustion engines if we consider life-cycle emissions?) as well as about ethical considerations (cobalt mining for lithium-ion batteries is problematic to say the least), and questions are starting to emerge on recycling and second-life use.
Who is involved?
Given the range of discussions around batteries, the stakeholder list is simply massive. In the Commission for instance, batteries are split between at least three DGs: DG ENER leads on energy storage topics and electricity markets, under the Clean Energy Package umbrella; DG ENV is responsible for issues relating to recycling, under the revision of the Batteries Directive; DG GROW has the lead from a competitiveness standpoint. To this list we can add Sefcovic’s Battery Alliance, DG CNECT’s focus on battery applications, DG RTD’s Horizon2020 – and the list goes on and on. From a business perspective, the whole value chain is concerned, from material sourcing (e.g. Umicore) to manufacturing (e.g. SAFT or Northvolt) and technology users (e.g. electric vehicle manufacturers), as well as the many EU associations representing these sections.
A question which is regularly raised in discussions on battery technology is whether it is actually ready for the applications it is envisaged for: do batteries really offer a cost-effective alternative to other options? A challenge which batteries face is that they offer few services that are not already provided by other technologies, and often at a lower price. Together with concerns about their capacity, charge efficiency and discharge loss have led to creating an image of an emerging technology which is not quite ready to hit the market, despite the significant leaps in recent years. But batteries are already much cheaper and more powerful than many (most) predicted – the call-price in 2017 for lithium-ion batteries for transport was between €200 and €300 per kWh, which is nearly half the price projected by experts in 2016 – see e.g. EASAC report). This becomes all the more lucrative with significantly lower renewable energy prices, particularly for solar photovoltaic.
More importantly – why now?
Beyond pure financial considerations, batteries have the potential to cure many of the EU’s broader headaches, which is why they are creating so much buzz. In a context of high political momentum around climate action, batteries can help to clean up the EU’s vehicle fleet and provide a go-to solution for the intermittency of renewable energy sources. In a context of the global technology race, investing in battery manufacturing can put Europe on a map where it is currently being overshadowed by China, South Korea and the US.
Next steps to watch out for: the Commission will publish the Battery Alliance’s action plan on 16 May, as well as Horizon 2020’s successor on 6 June (which is set to earmark significant funds for storage technologies). Market Design discussions also kick off again in June with aggregators, local energy communities and ownership of storage facilities all on the institutions’ agendas. In brief, expect batteries to be all over EU policy news for at least the next year. They will certainly keep going.