thank you I'm Priscilla Barrera with the investing News Network and here with me today is ayola Hughes whose research manager at Rome motion Iola thank you so much for joining me today so the first question I wanted to ask you today was what have been some of the main Trends you've seen in the energy stationary storage space in the past year at a global level and how much do you expect this Market to grow in 2023 um so I probably one of the biggest Trends we've seen is just you know new


projects coming online and the the scale of these projects um so you know in 2022 or kind of going back historically when you're thinking about what is a big project you might say in the Realms of say Okay 50 megawatt hours is a big project right now and that's really stepped up over the last few years so we've moved from a place where you know 100 megawatt hours is the standard 200 megawatt hours is standard and really Giga gigawatt hour scale projects are becoming more and more common in terms of growth we expect


2023 to be a very strong year again um so last year we saw around 75 gigawatt hours installed across the grid and behind the meter markets and that's across all the different chemistries um in 2023 we're expecting that market to double and uh we are here at the battery factories Europe event so I obviously wanted to ask you about uh Europe in particular so how does Europe's battery energy storage industry compare to other regions and maybe if you can tell us a little bit about which countries are


leading the way in this space yeah definitely so in in general Europe is is quite far behind um the US and Chinese market for stationary storage and that really comes down to to policy and kind of the key things that are driving driving storage in those different markets so in China last year we saw a massive increase in storage because of new policy which came in which essentially required storage to be installed alongside Renewables so if you install solo you must install storage as well in the US market there's


also been strong support from specific states which has driven growth so California and Texas in particular we've seen lots of storage come in there in the last few years and also as part of the IRA we saw the extension of the investment tax credit to include Standalone storage for the first time so supporting the US is significant also in the European market there's a number of barriers around kind of legislation how energy storage is defined which has restricted the market somewhat um so growth has been has been


pretty limited over the last few years quite interesting in Europe the the market which is actually the strongest is is more on the behind the meter applications so in in China in the US it's really the grid Market which is driving growth in Europe it's more behind the meter applications driving the growth so particular that the German Market um for things like solar and storage for residential so people installing on their roofs um is a strong market and definitely some of the issues around energy


Security in the last year uh in Europe and high energy prices has driven individuals and consumers to to look towards kind of how can I build a system in my home which is going to provide me with low costs and better security so that growth of solar and storage has been quite significant in in the residential markets in Europe and I feel like you've just answered this but so it's European legislation supporting the development of battery energy storage and then if not then what challenges remain for the sector to


continue to expand um so historically the support's not really been there but we are starting to see the momentum changing now so um I mean in the last few months we've seen a I guess it's realistically it's Europe's reaction to the IRA um in the form of the Net Zero industry act and critical raw materials act uh which is part of the wider green deal industrial plan so there's been lots of legislation put forward around how we're going to think about energy and how we're going to think about raw materials


and energy storage was identified as one of the kind of key Technologies in in this so questions being drawn on it here as well and what we're also seeing is a full reform of the electricity market so the idea there being essentially to reform the electricity Market to ensure kind of getting rid of some of the large fluctuations and prices we've seen and also you know thinking about how we can integrate flexibility into the grid so as part of that as well they released a 10-point plan on energy storage which has 10


recommendations on how they want to you know improve energy storage how it can access the grid and that includes a number of things such as removing one of the barriers in Europe which is a double taxation opening up the market so storage can take part in in a wider range of applications it encourages member states to set their targets and it also looks around to kind of closing some of the financing gaps so with this kind of 10 point plan there's definitely support in Europe to come one barrier table which


remains in place is around the financing side of things so in the US it was very clear around this is the level of support we're going to give in terms of monetary value in Europe it's a lot more kind of searching for the money and trying to work out which member states are going to be able to give it out worse so in the next few months we'll hopefully see something a bit clearer around the financing side investors that might be listening to our conversation today are obviously interested to know about how energy


storage might impact demand for raw materials right so such as lithium or nickel so could you briefly explain what drives the chemistry choice in batteries for stationary storage yeah absolutely so uh in stationary storage you've got to think of things slightly different to how you do in the EV space so your your key things that you look for in a vehicle or of course long range so high energy density for storage that that kind of that goes out the window slightly so you you no longer are restricted by space often these


these batteries are installed in you know deserts big wide open spaces so lower energy density is is okay um and what that really means is we've seen uh kind of a shift towards what technologies are being used in these assets so if we go back to 2020 where this Market was relatively small and really acting as a surplus Market to the EV space there was basically a 50 50 split of NCM chemistries to LA chemistries that's really shifted over in recent years where this Market has grown and people have started to think about what


batteries are actually best suited to stationary applications which is generally more on the lfp side so that now makes up kind of the majority of these batteries that are being installed in stationary storage um going forwards we expect lfp to continue to dominate and there are a number of other emerging Technologies which have potential to I guess disrupt lfp and also I mean complement it so you know demand is going to be significant for all these raw materials in EV and stationery low batteries are really just


going to kind of help alleviate some of those pressures and I'll get back to you on on new technologies but in your presentation today you talked about China having legislation when it comes to the technology choice for energy storage can you maybe share a bit more about that and do you see that happening in other countries or regions going forward um yeah so that was a bit of legislation that came through last summer from the national energy Administration and and it was on the back of a number of fires


that had a different storage projects or storage sites and essentially what they did was they proposed a ban for NCM and also for sodium sodium sulfur batteries in stationary storage really for the large scale ones and also advised against using second life batteries in storage so dig a bit deeper into this for NCM It's really because they had some fire issues there sodium sulfur It makes up a really kind of tiny share of the market but similarly it was around the safety element second life batteries these were


generally you know old bus batteries which were then being used into storage assets so these were actually often lfp batteries but the main issue there being kind of currently around the warranties ensuring the safety at once a batteries being the vehicle time so with that that piece in place around the second life that was more around you know this is this is our current view on it if things improve around how people are testing these the battery management of these second life batteries then we'll review it but right


now we don't think it's good enough and we don't think it's very safe so left p is the way to go um in terms of other regions advising around a specific technology there's not been much that we've seen yet come through it has often been more from the developer standpoint or from an integrator standpoint so for example Tesla had a big fire at one of their sites in Australia a few years ago and after that they essentially said Wiggins can use lfp in stationary storage um same can be said for a number of


developers who basically announced we only want to use lfp in our systems because it's safer um so yeah it's it seems to be coming more from that level rather than proper kind of federal or national level um just gonna Circle back then to sodium ion batteries which we heard a lot in the past months um I know you just touch on it but do you see them as a potential competitor for lithium ion in energy storage and what are some of the advantages and disadvantages of these batteries um yeah definitely so for sodium ion um


just a little bit about it I guess so um it's basically essentially what you're doing is you're using sodium sour instead of lithium salt sodium is is much more abundant than lithium sodium is also cheaper than lithium so you know on at a surface level that instantly makes it as an attractive option um there's a number of other cost savings you can use an aluminum current collector instead of copper so you can save some money there on the anode side you essentially use hard carbon instead of graphite which at


the moment is more expensive so there's not really a supply chain set up for that so that's something that can make it bring up the price a bit but on a kind of cost point the the number being quoted generally once Supply chains up and running is around eighty dollars per kilowatt hour so really competitive against you know lfp at the same time you know it it really is dependent on lithium prices so when lithium price is high that price differential is going to be much bigger and everyone's really


excited about sodium ion or lithium prices are coming down then of course you know this less excitement around sodium ion there are some other benefits for sodium ion potentially so long cycle life which is good you're able to fully discharge the battery which is good for traveling it and makes it very safe and in general it's a very safe battery so yeah lots of excitement there I mean around kind of at the theoretical level of things we asked them to see quite a lot of developments happening in China which is


quite exciting so probably the most advanced player right now is someone called heinar battery they have a one gigawatt hour facility and they're ramping that up during this year and they're going to be mainly targeting two and three wheeler applications and stationary storage and they actually have a 60 megawatt hour project which is in the pipeline and due to come online this year so lots of movement there and lots happening as with any new technology it takes time both for supply chain to ramp up and also for people to


to gain kind of confidence and trust that technology and adopt it more widely so at least initially it's really going to be a China story but I mean as I alluded to earlier the demand is so significant for these batteries that you know having the option of some sodium ion there is is not really going to be a massive threat could this type of batteries be a disrupter in the electric vehicle Market as well then um yeah definitely we're seeing some interest there there's been a few test


Vehicles which have come out of China so um Pharisees and forgotten the name but there's been a few different cell manufacturers who've put sodium ion batteries into test vehicles in these recent months um it's worth noting with this so in China the kind of the general processes you have a battery put into a test vehicle and then this vehicle uh appears um and then it'll take some time to enter the market so right now it's just on in kind of the test stage it's not on the MIT list yet and speaking from kind


of a previous example of when we've seen a new tech a battery with a vehicle with a new battery appear on the MIT list it takes a long time for that to actually hit the road in some cases so it's uh they will come for sure um we think at least in its current state it's really going to be limited to small Vehicles so you're thinking about your a b maybe C Class segment vehicles with with a low range so you'd be typically kind of your City cars were thinking in the Chinese market where


you're maybe doing 50 to 100 kilometers a day quite has quite strong potential and just my last question for you today what other catalysts should investor consider when looking at the energy stationary storage Market globally and what could impact this sector in 2023 um I think anything around kind of The Wider energy markets is going to be big big for this so you know if any investment pours into the renewable space so as we see more going into solar and and wind of course storage is going


to benefit from that as well yeah and what's happening in the renewable markets is really important as well um but yeah I think in general it's an exciting year in terms of new technologies coming through um you know on the flow battery side as well there's also quite a lot of excitement in China there are other players looking at sodium ion outside of China as well which have some good progress so uh I think yeah it's really a kind of a big year of technology disruptors and new things coming through


thank you so much for joining me today thank you thank you foreign