The report was prepared by Australian consultancy AECOM and published by the Australian Renewable Energy Agency (ARENA) claims that Li-ion battery prices will fall by 60 per cent and flow battery tech will drop by 40 percent.
The 130-page study expects all battery technologies to drop in price. However, the largest reductions are forecast for Li-ion and flow-battery technologies.
Lithium-ion (Li-on) batteries will drop from $550 per kilowatt hour (kWh) in 2014 to $200 per kWh by 2020; and flow battery prices will drop from $680 per kWh to $350 per kWh during the same time.
The study said that the rapid uptake of solar provides a useful analogy to what could occur in the energy storage market. As technology prices have potential to reduce as technology development simultaneously improves, the study said.
“The behind-the-meter market segment of energy storage is widely expected to undergo a similar boom to the solar PV industry, with a tipping point expected within the next ten years as further cost reductions are achieved.”
The study also said that battery technologies offer “unique advantages” in that they can easily be scaled to suit many uses and have high cycle efficiency. A big reduction in battery prices provides real opportunity for multiple applications, including commercial and residential distributed energy.