NORTH AMERICAN INDUSTRIAL BATTERY FORECAST Nick Starita, president of the Energy Solutions Division at Hollingsworth & Vose delivered his forecast for industrial battery market for 2021-2023 at the BCI virtual conference this April. Hillary Christie reports.
Cautious but hopeful for the next three years Starita presented aggregated data from BCI reporting members on the effects of the pandemic and what sectors are poised for a strong recovery. His talk looked first at the motive power and stationary market segment before moving on to look at grid storage. BCI members’ forecasts show that, despite the setbacks in 2020, segments of the lead battery market are still showing growth and have potential. Opportunities include Telecom’s preparations for 5G expansion, a majority share of the stationary market’s predicted 3.8% annual growth rate through 2023 to $855 million. There is also the slow but steady overall compound annual growth rate of the motive power industry at 2.4% for 2013-2023 with an estimated $1.2 billion in 2023. Some areas of the market suffered from the uncertainty and disruption caused by the pandemic, though key stationary applications proved essential and had relatively minor slowdowns. Others, such as motive power and telecom, saw delays and setbacks that are now beginning to recover as the economy bounces back and companies work through the pent up demand. The motive power market, driven primarily by the industrial truck segment with smaller mining and rail segments, declined by about 10% to $1 billion compared to 2019 figures. The compound annual growth rate since 2013 is 1.3%, though Starita explained that, pandemic aside, the market has grown steadily at about 3%. BCI members forecasted CAGR over the next three years with the motive power market growing 5.1% to $1.17 billion and the stationery market to grow at 3.8% to $850 million. The pandemic hit the hospitality industry hard, affecting food delivery to restaurants, hotels and schools, and also lift truck rental activity related to outdoor events. Contrasting this was www.batteriesinternational.com
Nick Starita
the boost in grocery delivery, ecommerce warehouse and big box material handling, all of which fared well as people stayed home and opted to have goods delivered. During economic turndowns, ICE truck applications, port activity, construction, etc. are worse hit than electric truck applications such as retail food and groceries. The long term trend for motive power battery units declined by about 6.4%; truck units were down by about 6.7% to 135,000 electric trucks. Looking at the trends in Starita’s reports, typically-electric truck applications are growing faster than typicallyICE applications, and annual electric truck shipments have grown by almost 50% as ICE shipments remained stagnant. This ‘electric dominance’ is largely driven by ecommerce and productivity. Where goods and materials are being moved indoors, the fast charging and maintenance free electric trucks and material handlers tend to be favoured over ICE models. Another factor in widespread electrification is the introduction of new regulations. In California, the 2035 Emissions Free Executive Order will heavily influence the conversion from ICE to electric. Starita believes other states could follow suit. ICE to electric industrial truck con-
version is where lithium tends to dominate and Starita quotes experts’ that say lithium makes more sense in purpose-built fleets and conversions. Starita reported an overall slow decline of -3.2% from 2013-2020 in the tationery market, though the sector was slightly up in 2020 to $765 million. Growth in this market is primarily sustained by the communications and telecom segment, though stationary is also made up of switch gear, UPS and miscellaneous standby segments. Telecom and data weathered the pandemic by nature of their essential services. Telecom alone saw an 8.7% growth to $330 million in 2020, with the majority of growth in monobloc batteries. There is activity in the field of 5G, particularly in replacement batteries from the dot.com boom installations 20 years ago. Changes, upgrades and new installations supporting the expansion of the 5G network have increased the need for power to the sites, which in turn creates a need for more backup and increased power density requirements for batteries. One segment of the market still opting for lithium, despite a higher dollar per kWh price tag, is UPS, which declined by 5.1% to $244 million in 2020. New data centre builds are choosing lithium for its longer life, better data integration and smaller space. However, mostly, lead is still being replaced by lead — there is little return on investment by converting an existing lead battery UPS system to a lithium. Associations throughout the US have set targets in the transition to renewable energy. ESA’s previous goal of 35GW by 2025 has increased to 100GW by 2030, and four clean energy associations have committed to a target of 50% of US electricity to be generated by renewable sources by 2030. Starita said that 98% of these installations are using lithium, and therein lies the biggest challenge to the lead industry. However, the enormous amount of interest and investment proves there is still opportunity for lead to make an impact in the green energy transition. Starita thanked American Power Systems, CBI, Critical Power Solutions, Crown Battery, East Penn, EnerSys, Eternity Technologies, GS Yuasa, ITA, MPINarada, SAFT and Stryten for their help in compiling the information. Batteries International • BCI 2021 Yearbook • 19
