Rising Electricity Prices, Falling Storage Costs Powering GSBS Global Markets

January 18, 2016

Wellesley, Mass., January 18, 2016 – With improving efficiencies and costs coming down, electrical energy storage (EES) has the potential to provide a number of benefits, including deferring capital investments, use in energy arbitrage, enhanced power quality and less environmental impact.  BCC Research reveals in its new report that grid-scale battery storage (GSBS) technologies are now coming into their own after a decade of dedicated development combined with the rise of the renewable energy generation.

The global market for GSBS storage technologies is projected to reach $4 billion in 2025, from $716 million in 2015; reflecting a 10-year compound annual growth rate of 18.7%. Lithium-ion battery storage technology, the fastest-growing segment at a 10-year CAGR of 21.9%, will grow from $257 million in 2015 to nearly $1.9 billion in 2025. The second-fastest growing segment, flow batteries storage technology, will grow from $115 million in 2015 to $773 million in 2025, reflecting a 10-year CAGR of 21%.

Renewable energy integration is a key driver in the adoption of grid-scale battery technology. Because on the grid, the supply of power must be evenly matched with demand at all times, smoothing will be required to accommodate increasing amounts of solar and wind generation, which are intermittent sources. Today’s best solar technologies produce only 20% of their potential capacity while wind generation achieves just 33% of its potential.  With the cost of renewable technologies falling sharply, the incorporation of renewable energy, distributed generation, energy storage, thermally activated technologies and demand response into the electric distribution and transmission system has become the key to future grid operations and efficiency.

One of the basic challenges of energy storage is simply its scale. In the past, to be meaningful, technologies had to be capable of storing electric power output of a 100 megawatt (MW) plant for an hour or more, at minimum. However, with grid-scale battery technologies that are mainly deployed to support the intermittent generation from renewable sources, this requirement is lower with few battery technologies currently capable of exceeding 50 MW.

Until recently, demand for GSBS technologies across global regions was driven primarily by a combination of the need for (lower cost) peaking power production and by profits or potential profits that could be achieved through power arbitrage. More recently, increased capacity and projected increases in the capacity of intermittent renewables, such as wind and solar, have significantly strengthened demand for GSBS technologies around the globe, as well as allowing users to avoid peak demand charges by shifting energy use to off-peak hours.

“Due to rising electricity prices combined with falling prices and costs for grid-scale storage batteries, industry and market dynamics are shifting the market to where it becomes profitable to arbitrage shifting electricity prices—filling up batteries with cheap power (from night time sources, abundant wind or solar, or other), and using that stored energy rather than peak-priced electricity from natural gas peakers,” says BCC Research analyst Christopher Maara. “This arbitrage can happen at either the grid edge (the home or business) or as part of the grid itself.”

Grid-Scale Electricity Storage Technologies: Global Markets (EGY142A)  examines factors influencing growth of the market including a growing share of power generation coming from intermittent renewable energy sources, rising commodity prices, and escalating energy peak demand and price in many economies. Analyses of global market drivers and trends, with data from 2014 and 2015, estimates for 2020, and projections of CAGRs through 2025 are provided.

Editors and reporters who wish to speak with the analyst should contact Steven Cumming at steven.cumming@bccresearch.com.

Grid-Scale Electricity Storage Technologies: Global Markets( EGY142A )
Publish Date: Dec 2015    

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