Battery storage for electricity is predicted to explode in the next 10 years and Germany’s largest battery maker, BMZ, wants to be ready to cash in on the expected boom times. BMZ plans to quadruple production by 2020 and has begun an ambitious €450 million expansion of its manufacturing facility in the city of Karlstein to make that happen.
The expansion will take place in several stages. Once completed in 2020, the new factory will be capable of churning out 80 million lithium-ion batteries a year of various sizes with a total energy storage capacity of 5 gigawatt-hours. Interestingly, that is roughly the same capacity that Tesla expects from the Gigafactory it is building in Nevada, which should begin production in 2016.
Energy storage expert Tobias Rothacher told RenewEconomy recently that BMZ is doing the right thing at the right time. Installations of photovoltaic systems were up 50% in Germany in 2014. “Over 20 per cent of new PV systems under 30 kWh now include batteries,” Rothacher said.
Battery storage systems for grid size installations are up dramatically, having increased more than 20 times in just the last 3 years. According to some observers, it could generate as much as $68 billion in revenue over the next 10 years for companies ready to meet the challenge.
In 2014, BMZ invested more than $150,000,000 into research and development and expects its annual revenue to grow to more than $3 billion by 2020. The new factory will employ an additional 1,500 workers compared to today’s staffing levels.
BMZ won’t have the German market to itself, though. Japanese battery company Kyocera also has its eye on Germany after local utilities sharply reduced the amount of money they are willing to pay residential solar customers for the excess electricity they feed into the grid. The lower that “feed in tariff,” as it is called, the more economic sense it makes for home owners to install a storage battery and save electricity for their own use because every kilowatt they draw from their own storage battery is a kilowatt they don’t have to purchase from the grid.
Many observers think the more utilities try to squeeze residential solar customers by reducing energy purchase prices or adding monthly solar demand charges, the better the business case for home battery storage becomes. BMZ plans to be ready for whatever is next in the industry.