The U.S. local energy storage industry, but also ＂climbing over the hurdles＂
For the United States, to establish a strong energy storage industry chain, but also need to cross the lack of professional and technical personnel, access to raw materials bottlenecks, relatively high costs and other multiple "hurdles".
Solar Energy Industries of America (SEIA) released the latest industry data show that although the United States energy storage manufacturing competitiveness in the past two years has improved, 2023, the first three quarters of the installed capacity of energy storage is also growing, but the United States of America's local energy storage equipment capacity supply level is far from being able to meet the established climate goals. For the United States, to establish a strong energy storage industry chain, but also need to cross the lack of professional and technical personnel, access to raw materials bottlenecks, relatively high costs and other multiple "hurdles".
Industry competitiveness to be improved
SEIA said in its report, lithium-ion batteries is the United States is currently the main renewable energy applications of energy storage technology, the next ten years, the United States and even the global demand for lithium-ion batteries is expected to surge. The forecast suggests that global battery demand will grow from 670 GWh in 2022 to more than 4,000 GWh by 2030 in applications such as solar energy and electric vehicles. Of these, the installed capacity of energy storage systems required in the renewable energy sector will grow from 60 GWh to 840 GWh, while the installed demand for U.S.-based energy storage systems will grow from 18 GWh in 2022 to more than 119 GWh.
In the past few years, the U.S. government has repeatedly proposed to subsidize and support the local energy storage industry chain. The U.S. Department of Energy has emphasized that it will boost the U.S. local energy storage market by heavily subsidizing battery storage manufacturers and supply chain enterprises, increasing infrastructure investment, strengthening vocational education and training, etc. In 2022, the U.S. Inflation Reduction Act was released, and government support was increased through tax credit preferences, low-interest rate loans and other measures.
However, the U.S. domestic energy storage industry chain supply growth is less than expected. Data show that at present, the U.S. local battery energy storage system capacity is only 60 GWh. Although the current policy stimulus, the U.S. energy storage market has gained an unprecedented scale of financing, but the project can ultimately land also need to take into account the manufacturing experience, professional talents, technical level and follow-up funds are sufficient and many other issues, the U.S. local energy storage industry chain global competitiveness is still insufficient.
Insufficient supply of raw materials is an obvious bottleneck
Insufficient supply of raw materials is the main problem currently plaguing the U.S. energy storage industry. SEIA pointed out that the production of lithium-ion battery key raw materials, including lithium, phosphorus, graphite, etc., but most of these key raw materials are not mined in the United States production, the need for imports. Phosphorus, for example, although the United States and the signing of free trade agreements with the country's phosphorus production capacity is sufficient to meet U.S. demand, but about 70% of the world's phosphorus resources are concentrated in Morocco, which means that U.S. companies will be facing competition from around the world.
Not only that, SEIA further pointed out that the supply of lithium, graphite and other key raw materials is even tighter, of which, graphite materials or the U.S. battery energy storage industry is facing a "potential bottleneck". The analysis found that, at present, the United States does not have any natural graphite production base, although Australia and Canada can export graphite, but still can not meet U.S. demand. To fill the demand gap, the U.S. will have to seek to import more natural graphite or synthetic graphite materials.
In addition to the supply of raw materials, SEIA also pointed out that high costs and labor shortages also plague the U.S. energy storage industry. According to the agency's analysis, in addition to raw material price fluctuations directly affect the cost of energy storage systems, the current U.S. policy on "local raw materials" and "raw material recycling" requirements may also lead to further increases in the cost of energy storage industry. SEIA believes that only when the cost of raw materials is reasonable and the recycling rate exceeds 90% will the U.S. energy storage system products be internationally competitive.
Multiple Challenges Ahead
SEIA President and CEO Hooper said the U.S. ability to improve grid reliability depends on the speed of homegrown production and deployment of battery energy storage technology, but the current U.S. energy storage industry still faces many competition and challenges. "Looking to the future, the U.S. should make strategic investments across the industry chain, and the development of the U.S. indigenous energy storage industry will be key to ensuring U.S. energy security."
SEIA said that changes in the energy market have placed higher demands on U.S.-based manufacturers, and the construction of a domestic energy storage base is imperative. To reach the established climate goals, U.S. domestically produced energy storage products not only need to meet demand, but should be delivered at competitive prices, consistent quality, timing and capacity. To this end, SEIA recommends that the U.S. government increase the supply of raw materials and take incentives from state governments to reduce the cost of pre-project investment, not to mention the need to accelerate the project construction schedule, utilize existing manufacturing experience and strengthen cooperation with partner countries to promote the upgrading of the workforce.
Previously, the industry research organization Rui Zide energy analysts also publicly said that although the past year the United States installed capacity of energy storage rapid growth, but the construction speed can not keep up with the growth rate of demand for project investors, in addition to raw materials, costs and other bottlenecks, in fact, also faced with the problem of approval process is too slow. In this regard, it is recommended that the U.S. government to further accelerate the approval speed of energy storage projects, at the same time, to further improve the investment environment, and to promote the energy storage market financing.
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