Solar, wind and battery storage are essential to the low-carbon energy transition and there is likely to be greater demand for input materials used in these sectors in the years ahead.

This was noted by Fitch Solutions business unit BMI Research’s Group Power and Low Carbon Energy analyst David Thoo, speaking during the company’s ‘Global Renewables Capex Trends: Effects on Solar, Wind and Battery Storage’ webinar, on September 7.

He said global inflation rates would remain elevated, while fossil fuel prices would push markets towards investing in more renewable energy capacity.

He added that renewables growth would be spurred by fossil fuel concerns as well, with this growth mainly in the solar and wind power sectors.

Thoo pointed out that global solar capacity, which overtook wind energy capacity in 2021, is set to continue to outpace wind installations over the coming decade.

He added that this trend would result in solar capacity increasing to triple last year’s capacity by 2032.

For this industry, Thoo said prices had again started to decrease, with costs expected to contract further in the coming years.

Thoo explained that, as more manufacturing capacity came online, costs would be driven down further.

He added that labour and land cost components would remain low for solar.

However, he warned that more financing was needed, given that, as mentioned, installations would more than triple in the next decade.

He also mentioned that improving efficiencies could further bring costs down, however, a resurgence of supply chain disruptions could elevate prices, as was seen in the past.

In terms of wind, which, as alluded to, would be the second-largest renewables sector, Thoo said onshore would outpace offshore wind technology over this decade.

He emphasised that metal prices would be the key factor in wind installation costs, with these set to drive turbine cost trends. 

Thoo averred that this sector would see sustained growth despite high costs, however, it would lose out in attractiveness compared with solar.

Pivoting to battery storage, Thoo informed that developers were choosing to engage in short-term projects, owing to production uncertainty.

He noted that lithium prices and availability had the biggest impact on battery costs, with the battery energy storage system sector set to compete with electric vehicles.

For materials that support this sector, Thoo pointed out that global production of lithium and nickel would meet the demand over the next decade, however, cobalt supply would remain tight.

The lack of diversification in cobalt mine production was said to be placing limitations on the battery sector.