Energy Storage Technologies and Projections of Grid Parity: A Case Study of Singapore
World renewable energy production is growing fast. This is mostly due to a sharp price reduction of energy sources, and particularly solar modules. Unfortunately, the growth of solar energy production is driven only by some countries (i.e. Germany, China, Japan, Italy, United States of America, Spain, France, India, Australia). Not surprisingly that some of them (i.e. Australia, Germany, Italy and Netherlands) have already achieved grid parity, where the cost of renewable energy reached the grid electricity price. However, other countries, such as Singapore, did not reach grid parity yet, cost of solar energy is still greater than fuel-based electricity price. Electricity storage technologies, such as batteries, can help reduce cost of solar energy further. Renewable energy, such as solar energy, is highly variable, thus more solar panels are required to meet energy demand. The main advantage of energy storage is that it allows to satisfy peak demand with lesser capacity of solar modules installations, and thus, to reduce payback period. Due to high price of energy storage technologies and their characteristics, such as power capacity, power density, efficiency, scale, discharge capacity, response time and lifetime; the benefit of energy storage might not offset their price yet. But it might offset in the future due to falling price. Bloomberg New Energy Finance projects that lithium-ion batteries will become three times cheaper by 2030. To compare energy storage technologies with electricity price we calculate levelized cost of solar energy. It measures the cost of kWh of solar energy in monetary units. Levelized cost of solar energy is a present value of an average total cost of electricity generation over the operational lifetime, including price of panels, installation, maintenance costs etc., per kWh of energy generated over the operational lifetime. Using projections of electricity price in Singapore, solar photovoltaics modules and energy storage technologies developed by International Renewable Energy Agency, International Energy Agency, Fraunhofer and Energy Market Authority of Singapore till 2030, this paper provides projections when grid parity will be achieved in Singapore with two types of batteries. Lead acid and lithium-ion batteries are considered as they have the greatest price fall projections. The preliminary results show that although lead acid batteries are more attractive now, due to lower price, lithium-ion batteries will allow reaching grid parity by 2030 due to significant price fall. The results of this paper have practical implications for energy policy design and the choice of solar inverters. Although installation of batteries could become attractive only in the future, solar inverters compatible with specific types of batteries could be already installed to save on future purchase of inverters compatible with lithium-ion batteries.