Battery Energy Storage Systems Market - Snapshot
Battery energy storage systems are used to store the electricity generated by power plants, especially renewable power plants. This electricity is then used to ensure smooth supply to consumers when power generation from renewable power plants fluctuates due to weather conditions.
Investment in renewable energy plants and associated battery energy storage systems a major market driver
Different countries are initiating new development programs, raising funds, or entering into public–private partnerships to promote the use of renewable energy through development of battery energy storage systems. For example, in China, the government is encouraging emerging battery energy storage system technologies to support micro grid development and renewables integration. In 2016, the government of China released a 15-year energy technology innovation action plan for further research in advanced energy storage. In 2014, the U.S. government invested US$ 34 Bn in solar power plants, wind farms, and other renewable energy projects.
Lack of standards to ensure safe installation and usage of battery energy storage systems an important restraint for the market
A report by Australia’s Commonwealth Scientific & Industrial Research Organization (CSIRO) investigated safety issues and regulations regarding battery technologies of 1–200kW capacity. No consensus was formed on the precise method to extinguish a lithium-ion battery fire. In another example, in January 2013, Boeing 787 Dreamliner commercial jets suffered safety issues, due to electric issues caused by lithium-ion batteries.
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Rise in demand in the residential sector is creating growth opportunities for the battery energy storage systems market
Policies such as net metering 2.0, net zero export limitations, and devaluation of exported solar PV are augmenting the demand for battery energy storage systems in the residential sector. Net metering (net energy metering, NEM) helps consumers who produce their own electricity to use that electricity any time. This is particularly important with wind and solar energy. Establishment of tax credit for standalone storage is expected to improve the economic scenario for the battery energy storage systems market. Deployment of energy storage systems in the U.S. is expected to increase in the near future. Since 2012, Panasonic Corp. has started mass production of compact lithium-ion battery storage systems for the residential sector in Europe. In countries across Europe, there is a growing movement among residents to adopt rooftop solar systems, motivated by the need to reduce energy costs and increase in pricing incentives by governments.
High threat to manufacturers due to constantly changing specifications of products
Constant changes in specifications and the introduction of new product lines by manufacturers of battery energy storage systems increase the possibility of internal substitution. Lithium-ion batteries are expected to face intense competition from other types of batteries such as flow batteries, sodium sulfur batteries, and sodium ion batteries. However, the threat from new entrants is likely to remain low during the forecast period. The battery energy storage systems market is driven by economies of scale and proprietary systems. These act as effective barriers to the entry of new players. Battery energy storage system operations are capital-intensive and they require substantial investment in the construction of storage facilities and their use.
Several battery energy storage system projects have been launched recently
Governments across the world are launching battery energy storage systems at a rapid pace. For example, in March 2017, ABB received an order for Denmark’s first urban energy storage system. The company agreed to deliver a two-megawatt (MW) battery energy storage system (BESS) to DONG Energy. In August 2015, General Electric announced its plans to supply a 30-MW battery energy storage system to Coachella Energy Storage Partners (CESP) in order to develop one of the largest battery storage plants in the western U.S. In February 2015, Hitachi America, Ltd., a wholly owned subsidiary of Hitachi, Ltd., and Demansys Energy, Inc. constructed and commissioned a 1-MW lithium-ion energy storage facility by utilizing Hitachi's CrystEna*1, a compact, container-type energy storage system. In July 2017, Xcel Energy and Panasonic announced a collaboration with the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL), Denver International Airport (DEN), and LC Fulenwider, Inc. in order to study the possible implementation of a carbon-neutral energy district master plan for Pena Station NEXT in Denver, Colorado. The partnership has commissioned 1-MW/2-MWh lithium-ion battery energy storage systems.
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Battery energy storage systems market is undergoing the introductory phase
The growth rate at which the global battery energy storage systems market is expanding has increased over the last few years. This is due to economies of scale led by the increasing number of projects. The same trend is expected to continue during the forecast period, further aided by the constant decline in prices of energy storage batteries.
Reduction of GHGs into Environment Key Aspect in Battery Energy Storage Systems Market
Battery energy storage systems are used in range of power applications where they are utilized for their on- and off-grid flexibility. Some of the popular areas propelling product development in the battery energy storage systems market include frequency control, peak shaving, voltage control in renewable integration, and energy shifting. Rise in use cases of battery energy storage solution in making on- and off-grid transition in the renewable sector is a key trend underpinning growth in the market. In recent years, numerous industry pioneers have intensified their focus on reducing the reliance on non-renewable and accelerating the pace of worldwide adoption of renewable energy. They have increased the stakes in companies that are at the forefront of production of solar energy. Thus, this has imparted a robust push to integration of solar energy in the overall energy mix. As a result, the role of battery energy storage systems is likely to become a transformative one, given the cyclical nature of wind and solar energy. Wind and solar energy has risen in production across the globe to meet the propositions of green energy. Rise in use of wind and solar energy for commercial and residential applications has filliped the installation of large battery energy storage systems. Battery energy storage systems market are ceaselessly looking for novel technologies and breakthroughs in the use of materials for these batteries.
The Covid-19 pandemic has led to several disruptions in the value chain of businesses, including that of battery energy storage systems market. This has brought fore new slew of investments in robotics and digital channels. Businesses across industries are carefully evaluating the existing operational models in extracting value from the globalized world. Thus, there is a newfound optimism in shifting the businesses to these models to garner gains in the post-pandemic world. New normals are expected to retain their relevance in the coming years. A global effort by various industry stakeholders to adopt green energy has spurred development projects in the battery energy storage systems market.
