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					</table><p>China Energy Engineering Corporation&#8217;s (<a href="http://en.ceec.net.cn/" target="_blank" rel="noopener">CEEC</a>) auction for 25 GWh of lithium-iron-phosphate (LFP) battery systems resulted in a record-low quoted tariff of CNY 0.37/Wh (~$0.051), a 30% year-over-year decrease from 2024.</p>
<p>The tender was structured into three packages based on system duration and received bids from more than 70 companies. For the one-hour systems, totaling 3 GW/3 GWh, prices ranged from CNY 0.673 to CNY 0.89/Wh (~$0.093–$0.124/Wh), with an average bid of CNY 0.7863/Wh (~$0.109/Wh).</p>
<p>The two-hour systems covered 6 GW/12 GWh. Bids in this category fell between CNY 0.416 and CNY 0.5764/Wh (~$0.058–$0.08/Wh), with an average price of CNY 0.4646/Wh (~$0.064/Wh). Notably, ten companies submitted nearly identical top bids, clustered between CNY 0.428 and CNY 0.44/Wh (~$0.059–$0.061/Wh).</p>
<p>The most competitive pricing appeared in the four-hour systems segment, totaling 2.5 GW/10 GWh. Here, bids ranged from CNY 0.37 to CNY 0.495/Wh (~$0.051–$0.068/Wh), with an average of CNY 0.4249/Wh (~$0.059/Wh). The lowest bid of CNY0.37/Wh (~$0.051) set a new low for the industry.</p>
<p>China&#8217;s leading battery manufacturers, including CATL, BYD, Sungrow, and Envision Energy, participated in the auction.</p>
<p>More than 60% of the tendered capacity is expected to support standalone battery energy storage systems, designed to provide services like peak shaving and frequency regulation.</p>
<p>Other deployments will be hybridized with renewable energy sources, particularly wind and solar, to enhance dispatchability and grid stability. A smaller share is earmarked for commercial and industrial users seeking to exploit time-of-use pricing and manage demand peaks.</p>
<p>According to the China Energy Storage Alliance, China added 13.3 GW/32.1 GWh of new energy storage capacity, a YoY increase of 52.5% in power and 41.8% in energy until May 2025.</p>
<p>Global energy storage capacity additions are expected to <a href="https://www.mercomindia.com/global-energy-storage-market-remains-resilient-amid-us-and-china-policy-changes/" target="_blank" rel="noopener">grow</a> by 35% in 2025 to 94 GW or 247 GWh, according to BloombergNEF&#8217;s latest outlook.</p>
<p>Corporate funding for energy storage companies, including venture capital, debt, and public market financing, <a href="https://www.mercomindia.com/energy-storage-funding-declines-sharply-in-q1-2025" target="_blank" rel="noopener">totaled</a> $2.2 billion across 31 deals in Q1 2025, according to Mercom Capital Group&#8217;s recently released Q1 2025 Funding and M&amp;A Report for Energy Storage.</p>


China Discovers Record Low Tariff of $0.051/Wh in Battery Storage Auction


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					</table><p>Battery-backed solar energy systems need just 17 kWh of storage to flatten a 5 kW solar generation profile into a steady 1 kWh of output across 24 hours, according to a new report by <a href="https://ember-energy.org/" target="_blank" rel="noopener">Ember</a>.</p>
<p>For example, in a sunny city like Las Vegas, which has a solar capacity factor of around 20%, a 5 kW system generates an average of 1 kWh per hour or 24 kWh per day.</p>
<p>However, the city requires storage to redistribute excess generation since most of this energy is produced during daylight hours.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-1.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-81236 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-1.png" alt="Battery Storage " width="602" height="437" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-1.png 602w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-1-300x218.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-1-600x436.png 600w" sizes="(max-width: 602px) 100vw, 602px" /></a></p>
<p>Of the total 24 kWh generated daily, approximately 9.6 kWh can be consumed directly during sunlit hours. The remaining 15 kWh must be stored for non-sunlight periods. Typically, a 90% usable capacity is required to ensure safe operation between 5% and 95% charge levels, and a 17 kWh battery is needed to reliably store the 15 kWh. This configuration enables approximately 14.4 kWh to be discharged later.</p>
<p>While achieving 24-hour solar power is straightforward in sunny locations, delivering this consistently across all 365 days remains a challenge due to seasonal and weather-related variability.</p>
<p>However, the Ember report said that modeling using hourly solar irradiance data from 12 cities worldwide shows that optimized solar and storage ratios make achieving approximately 97% of full-year 24-hour coverage possible. In high-insolation regions, this can be achieved at a competitive levelized cost of $104/MWh.</p>
<p><strong>Impact of Solar Tracking </strong></p>
<p>Battery requirements vary across days and regions, but the variation is not large in sunny locations. In Las Vegas, the daily battery requirement fluctuates between 15.8 kWh and 18.2 kWh throughout the year. Analysis shows that a 17 kWh battery remains close to optimal for most sunny areas.</p>
<p>The requirement for battery storage remains largely unchanged, even if solar panels use tracking systems rather than fixed mounts. Although tracking can increase output during early morning and late afternoon, any power above the 1 kW continuous demand would be used to charge the battery rather than being utilized.</p>
<p><strong>Significant Savings </strong></p>
<p>Solar energy paired with batteries can reduce the need for expensive grid expansion. In sunny regions, a single solar panel has an annual capacity factor of 20%. A fixed grid connection that would otherwise support only a limited solar installation can now support up to five times the solar capacity with the addition of batteries.</p>
<p>In 2024, over 3,000 GW of renewable projects worldwide were stuck in interconnection queues, compared to 585 GW of total new installations during the year. The report opines that batteries offer a practical and immediate solution for such situations.</p>
<p><strong>Cost Declines </strong></p>
<p>In 2024, battery prices dropped 40%, reaching a record low of $165/kWh for a fully integrated system (excluding engineering, construction, procurement, and grid connection costs). The downward trend continues into 2025, with auctions in Saudi Arabia achieving prices as low as $72/kWh.</p>
<p>This price drop is largely due to the widespread adoption of lithium-iron-phosphate (LFP) batteries, which comprised 80% of new grid-scale installations in 2023. LFP technology does not use nickel or cobalt, improves safety, and now comes with 20-year warranties from some manufacturers. These improvements significantly enhance the economics and reliability of battery investments.</p>
<p>Last December, BloombergNEF <a href="https://www.mercomindia.com/lithium-ion-battery-historic-low-price" target="_blank" rel="noopener">reported</a> that lithium-ion battery pack prices dropped 20% from 2023 to a record low of $115/kWh, the most significant annual decline since 2017.</p>
<p>Battery enclosures have also witnessed technical improvements, enabling denser cell packing, improved insulation, and reduced maintenance, particularly in hot and arid regions. Simpler integration further reduces system installation costs.</p>
<p>The development of sodium-ion batteries could potentially eliminate the need for lithium entirely and further reduce costs. The first grid-scale sodium-ion system is already operational.</p>
<p>Despite these advances, battery deployment remains in its early stages of development. In 2024, only 169 GWh of grid-scale battery capacity was installed globally, despite 1,450 GWh of battery manufacturing capacity already being in place. This includes electric vehicle batteries and is more than enough to support the 585 GW of solar capacity added in 2024 at a ratio of over 2 kWh of battery per 1 kW of solar panel.</p>
<p>Global energy storage capacity additions are <a href="https://www.mercomindia.com/global-energy-storage-market-remains-resilient-amid-us-and-china-policy-changes" target="_blank" rel="noopener">expected</a> to grow by 35% in 2025 to 94 GW or 247 GWh, according to BloombergNEF’s latest outlook.</p>
<p><strong>Shortfall Variation</strong></p>
<p>A standard configuration of 6 GW of solar energy paired with 17 GWh of battery storage was tested across 12 cities worldwide to assess how close each location could get to delivering firm, round-the-clock solar electricity year-round. The analysis revealed that the sunniest cities can achieve over 90% of full 24/365 reliability, but seasonal and climatic variations still impact output, especially during extended periods of cloudy weather.</p>
<p>Even in high-irradiance cities like Las Vegas, which achieves 97% reliability, shortfalls occur in winter, when daylight drops to just over nine hours on the shortest day, nearly three hours below the average.</p>
<p>Across the hemisphere, in Hyderabad, India, another city with high irradiance, monsoon clouds rather than winter, caused dips in solar generation.</p>
<p><a href="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-2.png"><img loading="lazy" decoding="async" class="aligncenter wp-image-81237 size-full" src="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-2.png" alt="Battery Storage" width="602" height="491" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-2.png 602w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-2-300x245.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2025/06/Battery-Storage-image-2-600x489.png 600w" sizes="(max-width: 602px) 100vw, 602px" /></a></p>
<p>In Spain, Madrid experienced its worst gaps during November and December due to low sun angles and frequent overcast skies. Birmingham in the UK saw limited sunlight even in summer, managing just two months of consistent solar generation.</p>
<p>In China, Wuhan suffered from dense cloud cover throughout the year.</p>
<p>Muscat in Oman performed best overall, reaching 99% of the way to 24/365 solar generation. Other top performers included Mexico City, Mexico (96%); Johannesburg, South Africa (95%); Manila, Philippines; and Abuja, Nigeria (both 92%).</p>
<p>Four other cities surpassed the 80% mark: Hyderabad (89%), Madrid (88%), Buenos Aires, Argentina, and Washington, D.C. (both 81%). Only Wuhan (74%) and Birmingham (62%) fell short due to persistent cloudiness and lack of sunlight during the winter months.</p>
<p><strong>Commercial and Industrial Consumers</strong></p>
<p>Commercial and industrial users are also turning to behind-the-meter microgrids to reduce reliance on the grid and shield themselves from price volatility and outages.</p>
<p>Notable examples include the 100 MW Moro Hub data center in the United Arab Emirates, powered entirely by a co-located solar project. In West Virginia, U.S., a 106 MW solar microgrid with 261 MWh of storage can power titanium melting operations. Saudi Arabia’s tourism development now operates 16 resorts using a 400 MW solar project with 1.3 GWh of battery storage.</p>
<p><strong>Regulatory and Financial Barriers </strong></p>
<p>The Ember report identified entrenched regulatory and financial mindsets as the primary obstacles to delivering 24-hour solar power. While the systems are now mature, cost-effective, and capable of providing round-the-clock clean energy, power planners, regulators, and financiers remain either unaware of the potential or skeptical of its reliability.</p>
<p>Properly designed solar battery systems can meet or exceed these reliability standards, especially when supplemented by modest oversizing, grid electricity, or rarely-used backup generators. Unlike fossil fuels, solar systems benefit from increasingly accurate weather forecasting and lower maintenance requirements.</p>
<p><strong>Reduction in Grid Costs</strong></p>
<p>The report stated that integrating 24-hour solar with battery storage offers a strategic advantage at the national level by reducing the need for costly grid expansion. While not a standalone solution, solar-plus-storage plays a vital role in balancing the grid alongside other resources such as wind, hydro, geothermal, interconnectors, and flexible demand systems.</p>


24-Hour Uninterrupted Solar Power with Battery Storage is Real: Ember


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					</table><p>Mumbai-based <a href="https://www.himadri.com/" target="_blank" rel="noopener">Himadri Speciality Chemical</a> is setting up a facility in Odisha to produce Lithium-ion Battery (LiB) components with a total annual production capacity of 200,000 MT and an estimated project cost of ₹48 billion (~$575.87 million) over a period of five to six years.</p>
<p>This investment will be made largely from internal accruals and debt.</p>
<p>The company aims to produce Lithium Iron Phosphate (LFP) Cathode Active Material, catering to 100 GWh of LiB capacity by 2030.</p>
<p>In phase I, the manufacturing capacity will be 40,000 MT, at an investment of  ₹11.25 billion (~$134.94 million). Operations are scheduled to begin in the next 27 to 36 months.</p>
<p>As the plant reaches its full utilization of 40,000 MT, the company expects to gain four times more revenue than the capital expenditure.</p>
<p>“Global demand for LiB is expected to grow by about 27% annually to reach about 4,700 GWh by 2030, and Cathode Material, which is a critical component for the LiB value chain, is expected to increase to 9.4 million tons by 2030 to meet the required global production of LiB cells said Anurag Choudhary, CMD and CEO of Himadri Speciality Chemical.</p>
<p>Meanwhile, in a BSE listing, the company announced it has completed the acquisition of 100% equity shares of Himadri Clean Energy, a wholly subsidiary of Himadri Speciality Chemical.</p>
<p>The subsidiary company will set up the manufacturing facility for Cathode Active Material through its step-down wholly-owned subsidiary, Himadri Future Material Technology. In June 2023, Himadri Speciality Chemical <a href="https://www.mercomindia.com/himadri-invests-7-million-australian-startup-sicona" target="_blank" rel="noopener">announced</a> an investment of AU$10.32 million (~$7 million) in Australian startup Sicona Battery Technologies to produce high-quality anode materials.</p>
<p>According to a study by Wartsila and KPMG, India would <a href="https://www.mercomindia.com/india-450-gw-of-renewables-2030" target="_blank" rel="noopener">need</a> 38 GW of four-hour battery storage and 9 GW of thermal balancing power for the cost-efficient and reliable integration of 450 GW of renewables by 2030.</p>


Himadri Chemical to Set Up Li-ion Battery Components Plant in Odisha


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					</table><p>Battery manufacturer <a href="https://www.lgensol.com/en/index" target="_blank" rel="noopener">LG Energy Solution</a> plans to invest roughly KRW 7.2 trillion (~$5.5 billion) to build a battery manufacturing complex in Arizona, United States. The current investment is more than four times the amount LG had initially announced last year to manufacture cylindrical EV batteries in the same location.</p>
<p>The company&#8217;s decision to increase investment in cylindrical EV battery production in North America comes from rising demand from EV makers for locally manufactured high-quality, high-performance batteries to satisfy the Inflation Reduction Act&#8217;s EV tax credits.</p>
<p>The complex will comprise two manufacturing facilities, one for cylindrical batteries specifically designed for electric vehicles and the other for lithium iron phosphate (LFP) pouch-type batteries suitable for energy storage systems (ESS).</p>
<p>The company plans to invest KRW4.2 trillion (~$3.2 billion) in building a cylindrical battery manufacturing facility with a capacity of 27 GWh and KRW3 trillion (~$2.3 billion) in LFP pouch-type battery facility with a capacity of 16 GWh. Both facilities, totaling 43 GWh, plan to break ground this year.</p>
<p>&#8220;Our decision to invest in Arizona demonstrates our strategic initiative to continue expanding our global production network, which is already the largest in the world, to further advance our innovative and top-quality products in scale and with speed,&#8221; said Youngsoo Kwon, CEO of LG Energy Solution.</p>
<p>The cylindrical battery manufacturing facility is set to commence mass production of 2170 cells by 2025, primarily targeting electric vehicle manufacturers in North America. LG claims this facility is the U.S.&#8217;s first cylindrical battery manufacturing plant, solely funded by a Korean battery manufacturer.</p>
<p>LG aims to commence production of LFP pouch-type batteries for ESS in 2026. This state-of-the-art facility will leverage LG Energy Solution Vertech&#8217;s fully integrated energy storage solutions, enabling the company to broaden its presence across the entire ESS value chain.</p>
<p>LG Energy Solution and Honda <a href="https://www.mercomindia.com/daily-news-wrap-up-lg-honda-produce-ev-batteries" target="_blank" rel="noopener">announced</a> they would establish a joint venture to produce lithium-ion batteries in the U.S. to power Honda and Acura EV models for the North American market.<strong> </strong> LGES and Honda will invest $4.4 billion in the plant. The plant aims to have an annual production capacity of approximately 40 GWh.</p>
<p>Total corporate funding (including venture capital funding, public market, and debt financing) for the energy storage, smart grid, and energy efficiency sectors in 2022 was up 63% with $31.7 billion <a href="https://mercomcapital.com/product/annual-q4-2022-funding-ma-report-for-storage-grid-efficiency/" target="_blank" rel="noopener">compared</a> to $19.5 billion in 2021, according to Annual and Q4 2022 Funding and M&amp;A Report for Storage, Grid &amp; Efficiency.</p>


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