Published: May 2017
Report Code: PE10972
Category : Conventional Energy
Energy storage can be described as a technology that provides an option to supply power as and when required without reverting to fossil energy sources. Additionally, technological advancements have resulted in the integration of higher shares of variable power in economic sectors that has in turn contributed to the development and decarbonization of the whole energy system. The energy storage market has witnessed considerable growth over the past few years on account of the volatile crude oil prices and increasing concerns towards the harmful effects of greenhouse gas emissions, which have arisen the need for shifting the focus from carbon-based non-renewable resources to carbon-neutral renewable sources of energy such as solar, hydroelectric, wind power and biofuels. Initiatives and developments are being carried out on a global front for exploring safe and cost-effective solutions for energy storage.
The global market for energy storage is expected to witness a CAGR of 46.3% during the forecast period due to the increasing number of energy storage projects and growing adoption of clean renewable sources of energy for power generation. Additionally, the growing adoption of energy storage in various end-user industries for grid and off-grid applications have led to the growth of global energy storage market. Based on type, mechanical is expected to be the largest segment in the global energy storage market during the forecast period. Ancillary services emanated the largest demand in the global energy storage market. Additionally, the segment is expected to witness the highest demand in the global market for energy storage during the forecast period. On the basis of installation, front-of-the-meter dominated the global energy storage market, while behind-the-meter is expected to witness fastest growth during the forecast period.
The key trend observed in the global energy storage market is the federal policy support for energy storage. Governments of various nations are focusing on implementing policies for supporting the growth in the energy storage market for exploiting its commercial potential. For instance, Australia executed the Smart Grid Smart City Project to demonstrate the benefits of different smart grid technologies while in California, the California Public Utilities Commission is setting up different targets for the procurement of energy storage systems under the California Law (AB 2514).
Another trend observed in the global energy storage market is augmenting the installation of behind-the-meter (BTM) energy storage systems. BTM energy storage systems are used by large businesses and industries that install battery storage systems on-site (behind-the-meter). Utilizing BTM energy storage installations could be an effective tool for industry users for reducing the overall costs of sourcing an electricity connection. The trend of BTM energy installations has gained significant interest among many industry players and is expected to witness rapid growth during the forecast period.
The factors driving the growth of energy storage market are progress in renewable energy power generation, rapidly increasing grid scale energy storage market, drop in prices of lithium-ion batteries and growing application of energy storage in various end-user industries. As of 2015, over 118 nations worldwide took the initiative of generating power through renewable energy sources and its storage in a cost-efficient manner. In terms of leveled cost basis, renewable energy sources such as solar and wind is expected to contribute significantly in the coming years in comparison to conventional energy sources such as coal, nuclear or gas. This trend is expected to continue in the long term as the cost for renewable energy sources would continue to fall.
Electrical energy storage (EES) helps in lowering the cost of a power system infrastructure such as transformers, distribution and transmission lines through load levelling during peak time. EES, being an essential component of a smart micro-grid, is a key driver for the growth of energy storage market and can also be used to enhance frequency control capability.
The major factor hindering the growth of the global energy storage market includes unclear regulatory framework. There is an unclear regulatory framework either at the EU level or at the UK level would hinder the development of energy storage. Though energy storage can create value in the short run, unclear regulatory framework limiting the full accessibility of energy storage and impacts the market moderately in short term.
Some of the key players in the global energy storage market include Tesla Motors, Inc., AGL Energy Limited, ABB Ltd., General Electric Company, Johnson Controls International Plc, The AES Corporation, Robert Bosch GmbH, LG Chem, Ltd. and Maxwell Technologies, Inc.
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