Hello and welcome to the latest edition of Energy Source, brought to you from London.
This week, all eyes will be on BP as CEO Murray Auchincloss presents the company’s strategy at an investor event on Wednesday. The oil giant is under pressure from activist investor Elliott, which urges BP to cut renewable energy spending to improve its struggling stock prices.
Sources suggest that BP plans to revise its commitment to reduce oil and gas production in favor of announcing at least one significant asset sale. However, this may not please all shareholders. Recently, 48 institutional investors voiced their demand for a vote on BP’s proposed changes to its climate objectives.
The London event coincides with the International Energy Week hosted by the Energy Institute, where discussions about the impact of Donald Trump’s presidency on the energy sector are expected to take center stage.
In this week’s feature, we delve into the world of batteries—essential for our transition to renewable energy. Let’s explore how important they are becoming in various energy systems.
A ‘Quiet Revolution’ in Energy Storage
In Hampshire, England, a new battery has begun operating that can supply power to 44,000 homes for an entire day. Developed by BW ESS, this project illustrates the rapid decline in battery costs since 2010, with lithium-ion batteries now costing over 90% less.
Erik Strømsø, CEO of BW ESS, mentioned that their latest project is 2.5 times larger than the largest battery project they completed just four years ago, all while needing 40% less land.
The growing importance of battery technology was highlighted by Brent Wanner from the International Energy Agency during a recent conference in London. With increasing demand for reliable energy storage solutions, batteries are gaining attention from policymakers and investors alike.
Wanner noted that approximately 70 gigawatts of battery capacity was deployed globally in 2024, a significant jump from 43 gigawatts in 2023. By 2030, it is expected that the addition of battery storage will surpass the installation of new fossil fuel power plants.
“Battery storage is quietly transforming the energy landscape,” Wanner said, emphasizing that the reduction in costs for both batteries and solar technologies makes them highly competitive options for energy generation and storage.
According to Wanner, solar panels combined with batteries are expected to outperform coal plants in India, and natural gas plants in the US. In fact, they are projected to surpass coal levels in China by 2027.
However, Wanner also raised concerns that current electricity market structures are not adequately rewarding battery investments. Many markets were designed for traditional energy sources, which may hinder the necessary growth of battery technology.
Challenges include fees incurred by batteries for both energy charging and discharging, alongside limited compensation for functions that help maintain grid stability. In the UK, researchers have reported that battery developers sometimes feel sidelined by operators managing the balance of power supply and demand.
Strømsø expressed similar concerns about charging and discharging fees being an obstacle. He stated that batteries significantly support the grid by charging during surplus and discharging during shortages, suggesting that fees could be reduced or eliminated entirely.
Despite rising costs in construction materials and equipment, Strømsø remains optimistic about the battery sector’s future, as the prices of batteries themselves continue to decline. He anticipates that batteries could help power systems become 90-95% green in a future that is more sustainable than many had thought possible just a few years back.
This is an exciting time for the battery sector as it plays a crucial role in our transition to greener energy systems.
(Rachel Millard, with insights by Jana Tauschinski)