Battery energy storage reaching inflection point says Capgemini
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Battery technology has been transforming the energy industry, however, an inflection point is coming, which will require the industry to overcome a series of complex challenges; including securing sustainable raw materials, optimising manufacturing and advancing recycling capabilities.
This is according to the Capgemini Research Institute in their report and survey, The battery revolution: Shaping tomorrow’s mobility and energy.
According to the new report, the battery industry is reaching an inflection point, driven on the one hand by the need for higher energy density, faster charging times, improved safety, greater sustainability, and, on the other, the need for manufacturers to reduce costs.
While batteries are playing a critical role in decarbonising carbon-intensive mobility and driving the renewable energy transition, the industry is facing a series of challenges that have wide ranging implications for scaling production, gigafactory industrialisation and ramp-up, economic viability, and supply chain constraints.
According to Capgemini’s report, while almost all (98%) battery manufacturers surveyed produce lithium-ion batteries (using liquid electrolyte), the industry is actively exploring alternative chemistries to support electric mobility and accelerate energy storage.
Amongst them, solid-state batteries (using solid electrolyte), represent a major shift in battery technology, primarily for EVs. They answer the need for improved performance owing to their potentially higher energy densities, faster charging times, and improved safety compared with traditional lithium-ion batteries.
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Commenting in a release was Pierre Bagnon, Global head of Intelligent Industry Accelerator at Capgemini: “Innovation is driving a sustainable and competitive battery industry, with advancements in technologies and alternative chemistries improving performance and longevity. At this transformative time, while European and North American manufacturers are navigating production ramp-ups and exploring next generation of batteries, a solid and scalable digital foundation will be crucial for the industry’s future.
“Data and digital technologies can enhance the entire battery value chain, optimizing lifecycle management from quality control to waste management and recycling. Equally, collaboration within an innovation ecosystem that brings together all players and regulators is vital to continue the industry’s journey towards a battery-driven sustainable future.”
New business models, but not without challenges
According to the survey, batteries are enabling new business models in the mobility industry to make EVs accessible to a broader range of consumers. A majority (around 64%) of mobility players are exploring battery swapping; nearly two-thirds of automotive organisations are considering battery-leasing and over half a Battery-as-a-Service (BaaS) model that allows EV owners to lease or rent their batteries, rather than buy them.
However, the success of these business models depends heavily on the implementation of standards, battery performance notably regarding longevity, adequate infrastructure, and economies of scale.
In the energy and utilities sector, two in five organisations say they are integrating batteries with renewable energy systems to optimise energy storage and usage, with most of them (69%) currently offering or planning to offer BaaS solutions. However, key challenges remain; while a battery is considered an expensive asset, the electricity it stores is relatively cheap. Furthermore, most organisations emphasise the lack of robust grid infrastructure and advanced control systems (65%); the need for multiple battery types to facilitate both short-term and long-term storage solutions (61%) and for open performance standards to ensure reliability and transparency (59%).
Beyond the automotive and energy sectors, multiple industries are rapidly integrating batteries into their operations: three in five of the organisations surveyed stated that battery innovation will impact fleet operators and heavy transportation in the next 5-10 years.
Disruptions are also expected in aviation and shipping. Innovations in these industries include battery-powered eVTOLs (Electric Vertical Take-off and Landing), heavy-duty vehicles, and electric ships on short sea routes.
Production ramp-up challenges
According to the survey, over half of battery manufacturers cite time required to build and ramp up gigafactories and difficulties in securing a stable supply chain for battery components and materials (respectively 59% and 53%). Uncertainty, around economic viability and profitability, appears as a key concern to scaling production.
The scarcity of experienced talent also represents a significant challenge for the battery industry, with 60% of organisations facing skills shortages in both battery technology and manufacturing. Expertise gaps extend beyond specialised skills and encompass data scientists and manufacturing engineers who can analyze and correlate production data with battery performance, enabling process optimisation and defect reduction.
While batteries are key to decarbonising carbon-intensive mobility and driving the renewable energy transition, only one in three battery manufacturers surveyed have taken meaningful steps toward establishing a sustainable circular economy.
A majority (67%) of respondents acknowledge that data and digital technologies are crucial to the industry’s future.
However, digitalisation among battery manufacturers is currently low, at just 17% and data usage remains minimal in sustainability-related fields.
In Europe, a Digital ‘battery passport’, setting high environmental standards for battery production and recycling, will enable suppliers and OEMs to make informed decisions by considering the complete lifecycle of battery manufacturing.
