New Hampshire, USA — A pair of analyst reports this week attach some numbers to the potential market for grid-scale energy storage using battery technologies, and why getting there will depend upon individual companies tying up with the right partners.
Market research firm ASD projects grid-scale battery storage will rise to a $1.17 billion market this year, largely thanks to increased need for more flexible and efficient grid systems to handle intermittent power from renewable sources. Meanwhile, Lux Research predicts grid-scale energy storage will surge from a $200 million market in 2012 to roughly $10.4 billion in 2017.
Energy storage can improve the efficiency and optimize the infrastructure of electricity transmission systems, which were originally designed for more centralized power generation and are now straining to handle increased incorporation of more dispersed and intermittent renewable energy sources. Large-scale batteries are key to this shift, addressing both power management (peak shaving, arbitrage) and quality (voltage fluctuation), but they’re still generally expensive and require incentives and subsidies to make economic sense, notes ASD. Also, in some countries it’s not clear as to who actually owns energy storage capacity between the transmission and distribution companies, the firm adds. Nonetheless, “while utilities remain slow on storage uptake, the growing penetration of renewable energy forces the requirement of energy storage to smooth out intermittency in generation,” they say. “Grid-scale batteries therefore play a critical role in the future of electricity supply.”
Surfing that wave of energy storage growth will require savvy matchmaking of technology suppliers with fresh IP and multinational conglomerates, which can improve those capabilities and tap new markets, points out Lux Research senior analyst Steve Minnihan. Examining roughly 900 organizations and nearly one thousand strategic relationships, he found the landscape for grid-scale energy storage (batteries) has “evolved from a scatter plot of islanded developers into a spiderweb of interrelated partnerships.” Nearly 82 percent of those organizations are linked “in a mega-cluster” (the rest are going it “alone or in strings of isolated relationships”), and almost all of them are “financial, education, or government organizations” that can aid technology developers to strengthen both their energy storage technologies and sales channels.
Organizational type distribution between lithium-ion and non-lithium-ion technology networks. (Source: Lux Research)
Establishing a position in those supporting networks is critical. The cluster for lithium-ion battery technology is “in rapid consolidation,” while the networks evolving around other battery technologies are “a web of confusion,” Minnihan notes. Six leading developers have faced at least one major technical or financial issue in the past 18 months, and several others have sought acquisitions or packed up and moved to China, he adds. (Think of recent headlines about companies that sell batteries for electric cars and airplanes.) Developers are hedging risks by turning to strong corporate partnerships; this won’t guarantee market success, but it can help avoid a business catastrophe.