Networks and battery storage

USD (2018) billion

USD (2018) billion

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Investment in electricity grids dipped by 1% in 2018; China and the United States were nearly half of

spending.

Global spending on transmission grids, around 30% of network investment, has risen steadily during the last five years, supported by the connection of more generation, the system integration of variable

renewables, and large-scale interconnection projects, though in some areas, constraints associated with permitting planning and project development remain investment challenges.

Grid investment in the United States increased by 8%,

with around 60% of spending in the distribution grid. Regulators continue to emphasise grid resilience and reliability. The potential downsides of underspending were in the spotlight in California with wildfires related to a lack of maintenance and replacement of distribution

assets at the end of their lifetime.

Spending in the Europe Union rose by 8%, largely due to investment in transmission. In their long-term planning,

the European Network of Transmission System Operators identified USD 10 billion of annual

transmission spending needs through 2030, implying a notable boost from current spending levels.

India’s grid spending grew to over USD 20 billion, led by transmission, while distribution moderated. The Central Electricity Authority recently identified needs for USD 40

billion of transmission spending in the next three years, 60% higher than current levels.

Investment in digital grid technologies rose by almost 10% to USD 35 billion. Most of this was in smart meters and grid automation equipment, but spending on EV

charging stations rose by 60% to over USD 3 billion, with reports of utilities, automotive companies and oil companies moving to invest more in the space. Spending on traditional equipment remained the largest part of investment at nearly 45%.

USD (2018) billion

Investment in battery storage rose by 45% to a record of over USD 4 billion in 2018. This was driven by strong

increases in both grid-scale and behind-the-meter batteries, which were the majority of installations.

Capital spending on grid-scale battery storage increased by 30% compared with 2017, totalling more than 1.2 GW installed in 2018 . Deployment in Europe (particularly the

United Kingdom) and the United States comprised half of 2018 investment, supported by capacity mechanisms and contracts. China was the region with the largest growth, as it registered a fourfold increase compared to 2017.

Behind-the-meter investment jumped by 60% in 2018, almost reaching 1.9 GW of capacity added last year. Korea led 2018 capacity additions, supported by tariff designs that aimed to shift peak demand in the industrial and commercial sectors – charging during low-load

hours and discharging during peak hours benefitted from price discounts and premiums compared with the prevailing retail prices.

Average costs for commissioned grid-scale battery projects declined in 2018 to under USD 400 per kilowatt

hour (kWh), with an average duration of 4 hours. Behind- the-meter projects saw more significant declines to near USD 800/kWh. For both types, 35-40% of the cost was associated with the battery pack, suggesting a significant role for other factors (e.g. mounting

equipment, cabling, and labour) in overall costs.

While pumped-hydro projects remained the largest part of new electricity storage, lithium batteries continued to be by far the largest part of battery deployment. In parallel, grid and ancillary services remained the main

application of these deployments, but there has been rising investment in batteries directly integrated with variable renewables plants (see Financing and funding trends).