SCB EIC analyzes policies to promote the battery industry, revealing 4 challenges for Thailand. Recommend that the government accelerates support for research and development.
December 29, 20236 Economic and Business Research Center Siam Commercial Bank (SCB EIC) published an analysis on “Batteries, a game changer for clean energy … how will Thailand benefit?”, highlighting the fact that the industry global battery is likely to continue to grow well.
The government sector plays an important role in pushing many countries to have policies to promote the battery industry. There are 3 similar policies: 1. Policy to drive new demand (New demand) 2. Policy to promote investment in the industry and its use through laws and regulations. (driven by regulations) and 3. Promote research and technology development from the policy budget. (Technically driven)
SCB EIC estimates that Thailand’s battery demand will not be less than 36 GWh by 2030 from the promotion of electric vehicles and electricity generation from renewable energy.
From the 30@30 policy and from the National Electric Power Development Plan (PDP 2018 Rev.1) which has a plan to use batteries (BESS), SCB EIC estimates that the basic requirements of batteries for electric vehicles are in accordance with r policy 30@. 30 Thailand together may have no less than 34GWh in 2030 and for the electricity generation sector from Solar + BESS no less than 2.76 GWh in 2030, representing a market value in 2030 of no less than 3,051 million US dollars.
technology competition And the slowdown in costs will cause battery prices to continue to fall. Costs of key minerals such as lithium and other battery components are likely to fall back to normal due to freer market conditions and oversupply. Together with the development of batteries with higher Energy density (Wh / Kg) and lower operating costs (Opex), resulting in battery prices tending to fall. It is expected that the price of batteries will continue to fall.
In 2024, it will decrease by about 21% to 121 USD / kWh. and is expected to continue to decrease by around 12% per year on average during 2024-2027 to 83 USD/kWh. Future reductions in battery prices will significantly boost demand for renewable electricity. And makes investing in electricity generation projects from Solar + BESS more interesting, with SCB EIC estimating the IRR at 11-15%.
SCB EIC has assessed the merit of investment in electricity generation projects (Utility scale) for electricity generation from Solar + BESS according to PDP 2018 Rev.1 of Thailand If the project starts in 2024 with investment in 2022-2023, IRR of 11-15% on D/E: 2.55 Furthermore, the IRR tends to improve in line with the decline in Solar PV and battery prices.
For homes and small businesses The suitability of Solar rooftop + battery installation is still limited to groups with high electricity costs.
SCB EIC has studied the cost-effectiveness of installing Solar + batteries for homes and small businesses They found that the current cost of batteries is still quite high. As a result, groups suitable for installing Solar + BESS are still limited to those with high electricity consumption of more than 20,000 baht per month, such as large houses, restaurants open until night (8: 00 pm – 10:00 pm) and flats • Flats or condominiums with lights switched on for the common areas
Considering the cost recovery point of installing Solar rooftop + BESS, it should be less than 10 years. If you want to store and distribute electricity for 2 hours after the power from solar pv ends, the cost of electricity must be no less than 21,100 baht per month and a high installed capacity of 10 kWp, and if you want to store and distribute electricity for up to 4 hours, you must have an electricity bill of no less than 61,000 baht per month and a high installed capacity of 20 kWp.
Although the battery market still has many business opportunities. But there are still challenges to keep up with in the race in technology. Raw materials and production costs Including environmental issues
SCB EIC assesses that there are four challenges to the battery industry and its use in Thailand that must be pursued:
1. New technology that is ready to change the game and make competition more intense, such as using all solid state batteries and changing the battery packing process.
2. Production costs that depend on high price minerals Although the price tends to fall But there are still external factors that could cause prices to vary, such as international conflicts. and trade protection measures
3. Battery prices may not drop enough to provide incentives for installing Solar+BESS in power plants. Including homes and small businesses, and 4. Recycling batteries that are worn out or have reached the end of their useful life (Retired Batteries), which will be an important environmental issue that will put pressure on battery production in the future. which are all important Thai entrepreneurs including the government sector must continue to support research and development.
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