Report: Lithium ion batteries dominate emerging grid storage market

While the grid-tied battery storage market remains in its early stages, Li-ion technology is emerging as the initial technology leader. This is the finding of the latest report from Lux Research into grid-tied storage. It found 90% of projects “that have been announced and are likely to be built” are set to be supplied by Li-ion technology.

“What that means for each project varies by market, but the vast majority of these systems are being driven by Southern California Edison’s Local Capacity Requirement awardees,” Lux Research’s Dean Frankel told pv magazine. “In the case of SCE’s procurement, the systems have been selected, but still need to go through the final approval process with the California Public Utility Commission.”

Looking at individual markets the U.S. has the most grid-tied storage installed at present, with 418 MW across 250 projects. Together with Japan, the two nations have 1.174 GWh of grid-tied storage projects already installed.

“Driven by renewable-connected systems and demand management, grid-scale energy storage is taking off, with 450 MW and 730 MWh of systems installed in 2014 ,” said Dean Frankel, Lux Research Associate and the lead author of the Grid Storage Data Tracker.

Li-ion is clearly the fastest growing technology, quickly supplanting molten salt batteries, which is the incumbent technology with 64%, in MWh terms, of grid-tied storage currently deployed in the market.

“In this case, Molten Salt refers almost exclusively to sodium sulfur batteries which are an electrochemical form of energy storage not thermal,” explained Frankel. “NGK Insulators is the leading developer there.”

The Lux Research report finds that demand management and systems deployed along with renewable energy systems are drivers for grid-tied storage. Demand management accounts for 1,335 MWh of capacity currently installed, across 236 projects. Time of use pricing and demand peak shaving are the primary business models underpinning these applications. Systems coupled with renewable energy solutions accounts for 890 MWh of grid-tied storage in place today, across 261 projects.

Within Li-ion, lithium-iron-phosphate (LFP) – such as that developed by China’s BYD – accounts for 38.1% of the MWh market share, followed by nickel-manganese-cobalt (NMC), which Lux notes “is rapidly becoming the cathode of choice among developers.”

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