China Already Makes as Many Batteries as the Entire World Wants
bloomberg.com
bloomberg.com
I feel you could fill a similar substack with "good news about the energy transition that is being framed as bad news".
> There are several big implications here. The first is that prices will fall and margins will get squeezed. That’s already happening, with a 14% dip in average battery pack prices in 2023, and China’s CATL announcing that it expects to be able to sell battery cells at the equivalent of less than $60 per kWh this year.
https://www.forbes.com/sites/woodmackenzie/2024/04/17/crises...
> Back in 2021 and 2022, battery supply was the biggest bottleneck for the energy storage supply chain. Stationery energy storage system (ESS) integrators and developers spent a considerable amount of time negotiating contracts with battery manufacturers who were instead prioritising automaker clients. Since the second half of 2022, battery cell plants dedicated to the ESS sectors have risen in China, with more than 20 plants announced by the end of 2023. However, less than half of the ESS battery cell capacity was utilised throughout the year. Within 2023, the ESS battery cell market went from a deficit into a surplus. Together with declining battery raw material prices, the price of ESS lithium iron phosphate (LFP) battery cells plummeted by more than 30% within 2023.
> The energy storage system market is even worse.
To summarise in non-scandalised language:
1. They couldn't get grid batteries because the EV market took them all in previous years.
2. People set up new factories specialising in Grid batteries.
3. The grid battery users managed to actually buy some batteries from these factories.
4. The price went down due to the increased supply.
It's not clear if it's partly racism and fossil fuel propaganda but the consistent theme seems to be that American business journalists are horrified that competition can lead to lower prices and margins.
This is the foundational theoretical justification of all free market capitalism and when it actually happens it terrifies them!
Strategically, any nation state depending on constant incoming battery supply probably wants a production facility, because when you decide to invade somewhere it's a bit embarrassing if you can't get batteries for your drones, due to that economy being .. the enemy.
I liked this: China’s BYD and CATL both continue to invest billions in R&D, are steadily launching new and better products, and in general are behaving more like scrappy startups than bloated corporate fiefdoms.
To me, that says we're in for more gooder better times ahead. Longer range, less risk of fire (these days, most fires start in cheap scooter batterypacks it seems)
Batteries are transforming electricity grid economics. We run these as markets because of neoliberal lunacy, when its a public utility function. Batteries make good money right now in arbitrage but their longterm role shifting Solar and wind to other times of day is huge. It can put electricity back into the public utility model, we can stop treating this as a profit market and focus on cost recovery of the transmission network, without coal. I can live with some gas peaker plants until they too are surplus to requirement.
Batteries are to me the closest we've got to the jetpack we were promised. They aren't "Mr Fusion" on a delorean flying machine car, but they are enormously cool.