Despite the challenges and complexity of the landscape, many growth projections agree that energy storage is gaining traction around the world and fundamentally changing market dynamics.
FREMONT, CA: The global market for energy storage is poised to grow rapidly. There are many analyses and projections regarding the annual growth rate. These diverse opinions originate with how one defines energy storage. Some analyses calculate front-of-the-metre utility-scale technologies, and others include behind-the-metre solutions implemented by commercial and industrial (C&I) customers. Some also include electric vehicle batteries and smaller-scale battery-plus-solar combinations deployed by residential consumers.
The numerous uses for energy storage, such as helping integrate renewables, supporting smart grids, fostering more dynamic electricity markets, offering ancillary services, and enhancing system resilience and energy self-sufficiency, further complicate the situation. Despite the complexity of the environment, many growth projections agree that energy storage is gaining momentum worldwide and will fundamentally change market dynamics.
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Market Drivers
Cost and Performance Improvements
The most beneficial aspect of battery storage is declining costs and improved performance, especially relating to lithium-ion batteries, since expanding electric vehicle markets encourages manufacturing economies of scale. Lithium-ion batteries’ costs are significantly decreasing, making battery storage more economical and increasing usage.
Grid Modernisation
Many developed nations embark on grid modernisation programmes to boost resilience in severe climate change conditions, reduce system outages linked to ageing infrastructure, and enhance overall system efficiency. These initiatives often involve deploying smart technologies within established electrical grids to enable two-way communication and advanced digital control systems and integrate distributed energy resources.
Battery storage goes hand-in-hand with grid modernisation efforts, including transitioning to smart grids. Digitising the grids allows for prosumer participation, intelligent system configuration, predictive maintenance, and self-hearing and paved the way for the tiered rate structure's implementation. This creates opportunities for batteries to generate value by adding capacity, shifting load, and improving power quality. As smart technologies are gaining popularity, batteries help to discover their full potential.
Global Movement Toward Renewables
Broad support for renewables and emissions reduction pushes the adoption of battery storage solutions. The significant role batteries can play in offsetting the intermittency of renewable energy and reducing curtailment is well known. However, the strength and pervasiveness of the desire for clean energy among all electricity customers are growing. This is visible within the corporate and public sectors.
Corporate procurement rivals policy in leading the growth of renewable energy, and large multinational corporations have taken a leadership role in procuring renewable energy worldwide. Many countries have pledged to reach 100 per cent renewable energy in the coming decade or sooner through initiatives and associations. This indicates a continued renewable energy development and continued deployment of batteries to help integrate greater amounts of distributed energy resources.