Frost & Sullivan has produced analysis which indicates the prospect of the development of an $8.3bn grid-connected utility-scale battery storage market over the next decade.
Frost identifies strong growth prospects in renewable energy integration, firming and time-shifting that will help drive the market as a result of impressive technological breakthroughs and growth in manufacturing capabilities.
The rising profile of the market has caught the attention of governments, which are now rolling out favourable policy initiatives such as subsidies, preferential tariffs and targets in core markets. Commercialization of utility-scale grid-connected solutions will accelerate after 2017, bringing huge opportunities for companies that have the technological capabilities to compete.
New analysis from Frost & Sullivan, Global Utility Scale, Grid-Connected Battery Energy Storage System Markets finds that the market earned revenues of $0.46 billion in 2014 and estimates this to reach $8.30 billion in 2024. Lithium-ion batteries are expected to be the leading technology for grid-connected, utility scale systems over the next two to three years.
“Battery storage has the ability to impart flexibility to the grid across a variety of end-use applications,” said 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.”
The market optimism, however, is tempered to some extent by typical early-stage market challenges such as:
· 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
“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,” observed Bruton.
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