In a report, the Global Utility-scale Grid-connected Battery Energy Storage Systems Market, Frost & Sullivan says a period of "dynamic growth" is on the cards, with commercialization expected to accelerate after 2017. This will bring "huge opportunities for companies that have the technological capabilities to compete," writes the consultancy firm.
Demand for battery energy storage systems (BESS) is being driven by the need for grid modernization on the back of increased uptake of renewable energies and new regulatory policies. Growth in the electric vehicle and consumer electronics markets are also playing a role.
While there are just 430 MW of BESS operating in the current market, between 10 and 12 GW are expected to be online by 2024. This will see annual market revenues increasing from $0.46 billion in 2014, to around $8.44 billion in 2024, says Frost & Sullivan.
As indicated by various other reports, and projects, lithium ion (Li-ion) technology will continue to dominate the market, "at least for the next two to three years," it says, remaining the top technology in terms of installed power.
Geographically, Frost & Sullivan says the U.S. will lead, followed by China, Japan and Germany. In terms of key companies, it mentions, among others, NGK Insulators, AES Energy Storage, Sumitomo Electric, LG Chem, Samsung SDI, NEC Energy, BYD, Toshiba, GE and Saft.
"Battery storage has the ability to impart flexibility to the grid across a variety of end-use applications," comments Frost & Sullivan energy & power research analyst, Ross Bruton. "Its greatest advantages are the provision of distributed, variable renewable energy firming and energy time-shift, and rapid short-term electricity balancing for ancillary markets."
There are a number of hurdles the nascent market needs to overcome, however, including:
- High costs
- Low technology maturity
- Lack of a clear business case and value proposition
- Limited practical application data to support laboratory efficiencies and safety standards
- Inadequate incentives, targets, and supporting policies, and
- Few market consolidations for turnkey solutions
- Low oil and gas prices
"Overall, attractive pricing, combined with a surge in manufacturing and supportive policies for renewable energy development, will increase the bankability of renewable energy associated storage projects," concludes Bruton.