Battery storage technology is a hotbed for R&D Globally

Battery storage technology is a hotbed for research and development. With the dependence of our modern life for secure energy source, it has become critical to approach and develop technologies that are environment friendly.

Li-ion based batteries are the dominant battery chemistry due to their fast growing demand among its end users. This has led to growing demand for battery energy storage systems in the power quality market.

Definition / Scope
Market Overview
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Other Key Market Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References

Definition / Scope

Definition: Battery Energy Storage is a large scale battery system that is connected to the electrical grid for both power and energy storage. The energy when in excess can be fed back to the grid.

Market segmentation by technology type for energy storage system:

Thermal Energy Storage (TES): The technology stores and transfers thermal energy (heat, ice, cold air, water or even molten salt). Hot Water Storage, Ice storage, Chilled Water Storage and Molten salt storage are some of the types of TES. From among these, molten salt TES is being used for its high conversion efficiency in concentrated solar power plants and has been utilizing its steam generated to run steam turbines.
Flywheel Energy Storage: The storage of energy from wind or solar in the form of rotational kinetic energy into a vacuum cistern is the flywheel energy storage. This technology is used to smoothen out power output, regulate frequency and also gain faster responses in wind turbines.
Supercapacitors & Batteries: Battery energy storage uses the electro-chemical potential energy that are stored in electrodes and electrolytes. This enhances rapid charging and flow of energy. Supercapacitors are high capacity capacitors that have the capability to accept and deliver charges much faster than batteries. These are used for their high power density and high efficiency.
Compressed Air Energy Storage (CAES): In this technology, air is compressed and stored in storage cells underground which are released later into the turbine when in peak hours in order to meet the demand. CAES technology has a fast response time with low environmental impact.

Geographic regions:

North America (NA) includes Unites States and Canada
Europe (EU) includes Western, Central, Eastern and Russia
Asia-Pacific (APAC) includes South, Southeast and Central Asia, and Oceania (including Australis and New Zealand)
Rest of the World (ROW) includes Latin America, Middle East and Africa

End Users:

Industrial includes; – Telecommunications and IT – Healthcare – Data Centers – Power utilities – Transportation – Others: industrial plants, power generation plants, motor starters, sewage treatment plants, etc.
Commercial includes commercial establishments, academic and financial institutions
Residential Includes houses, residential buildings, condominiums, etc.

Market Overview

Global annual capacity addition of energy storage by the year 2024 is 9.7 GW with the global energy storage cost of 200 USD/ KWh by 2035.
China is installing the largest utility scale BESS plant combining 140MW of RE power and 36MW of energy storage which has been predicted to complete by 2021.
Incentive program of $779 Mn has been rolled out by METI, Japan in 2016.
US has a total share of 45% in this global installed energy storage capacity.
The cost of lithium-ion are expected to decrease by half by 2024.

Top Market Opportunities

The tends to be driven by the factors such as the advancement of micro grids market and smart grid market, manufacturing of robust and reliable power electronics and increasing use of batteries in the transportation sector and in residential applications. Demand for reliable power sources drives the battery energy storage systems in APAC region

Countries such as China, Japan, Korea, and India are a hub for the battery energy storage systems. Rise in electricity demand has soared due to the ever increasing population in these nations. This has resulted in the deployment of battery energy storage systems by the concerned authorities for the provision of auxiliary services in the grid. These countries comprise of some of the major players in the battery energy storage market.

LG Chem (South Korea)
NEC (Japan)
Panasonic (Japan)
Samsung SDI (South Korea)
Hitachi (Japan)

Geographical Expansion for unlocking new market territories

The system of battery energy storage systems are available in developed countries. The technology has not been able to penetrate to the developing regions depriving the locals of secure power supply. Countries such as Middle East, North Africa, South Asia and other developing nations have negligible amount of battery storage systems.

Increasing penetration of renewable energy sources and ageing grid infrastructures are the main drivers. These countries have strong prospects for battery storage systems in the remote power systems where the grid connections are poor. However, with minimal support from the government and lack of subsidies and policies, barriers still remain for the market to flourish.

Declining price of Lithium ion rises the demand for Battery Energy Storage Systems

With numerous research and development in the field of battery chemistries, the cost of lithium ion battery storage systems is predicted to decline considerably. Clean energy researchers have estimated the investment for battery energy storage systems to be more than $600 billion till 2040. This opportunity will transform the battery technologies for both the automotive sector as well as the electricity sector.

Market Drivers

Governments issuing national mandate to control emission driving the battery energy storage market: Governments issuing national mandate for the reduction of carbon emission resulted as an initiative to implement renewable power with decreasing cost of the technology further resulting in the withdrawal of the coal- powered plants in countries like China. BESS has been observed as an ideal solution in providing Grid stability.

Increasing concern about the environment and renewable energy sources drives the market: Alternating variable power sources are a challenge to the local grids as they have not been designed to handle the variable generation output. BESS that have been installed in the solar and wind farms provide a smooth output. The energy stored is fed to the grid which also controls the ramping of the renewables. Moreover, this storage system provides an opportunity to utilize the resources for a better alignment according to the demand

Dire need of secure power sources increases the need of energy storage systems: Battery Energy Storage System will be an integral part of the grid infrastructure. With several disasters occurring time and again, the aging grids require to improve their resilience. Deploying micro and mini grids as an alternative means of power supply has been seen as an essential component for the grid infrastructure.

Rapid uptake of Solar and Wind Power systems increased the need of battery energy storage systems: The rapid ascend of numerous technologies in terms of power and energy generation has uplifted the solar PV and combined heat and power applications. This in turn has increased the number of prosumers in the electricity market further enhancing the market to adopt new businesses in line

Increasing awareness among the end users on the benefits of battery storage systems drives the market: The development in the energy storage market has incorporated us to not only consume the energy but also to produce it as well. The consumers have become aware about the integration with the electricity grid and increased in investing in these smart technologies and integrate with the overall grid infrastructures. This has enabled them to become investors or partners rather than just being a prosumer of electricity.

Market Restraints

Lack of strong policies restraining the market: Emerging developing countries lack a strong policy subjected to the energy storage market. Even the countries with large scale projects have yet to come up with a definite roadmap for this market. The government lacks a holistic framework for any of the auxiliary services in the energy market.

Lack of understanding of the system declines the market: Lack of understanding about the storage market, its components and the technical aspects of the technologies has been a challenge to the stakeholders. Also, the high upfront costs of the capital expenditure has changed the mindsets of its investors making it look costlier than other technologies.

Lack of proper initiatives descends the market for battery energy storage systems: The energy storage application in the utility scale for the developing nations is minimal as they depend on the peaker plants. The grids available in OECD require upgrading with improved efficiency.

With the development of new technologies the effectiveness of the old grids need to be improved but the utilities of these grids cannot meet up with the demands of the customers and the upgraded storage systems

The payback period of the capital expenditure of BESS has been seen to decline for the past few years but its implementation is yet to be adopted. This acts as a limiting factor for the adoption of ESS as a new and emerging technology

Industry Challenges

Lack of Government Involvement: Lack of strong policy and a definite roadmap subject to energy storage market is a major challenge in the emerging developing country. Government is seen lacking a holistic framework for any of the auxiliary services in the energy market

Lack of Knowledge in Stakeholders: Stakeholders’ lack of knowledge and understanding regarding the technical aspect of the storage market presents a major challenge in the industry.

Technology not updated: Current technologies available are largely theoretical, lack maturity and laboratory efficiencies. The data collected are insufficient based on the technologies with varying power conversion and management along with the system operations on varying topologies, climates and geographies.

Low oil prices: With the decrease in the oil and gas prices, the market is to suffer delay in the acceptance in the battery technology further favouring the fossil fuel for the peak power generation and heating purpose.

Technology Trends

Emerging Energy Storage Technologies

Compressed Air Energy Storage: The requirement for suitable geographic locations for implementing CAES limits the growth of this market in the long term Flywheel Energy Storage: Flywheel UPS are being used in Data centers. Used especially for transportation for its high energy efficiency.
Thermal Energy Storage: This method retains heat energy from concentrated solar power (CSP) plants to generate electricity during nights or bad weather conditions

Other Key Market Trends

For an enhanced energy storage system, R & D has been conducted and different material options has been developed.
The call/ module manufacturer has integrated mounting, fastening and electrical bus which maximizes the efficiency of collecting energy and transferring it to storage. This manufacturer has composite anodes such as graphene-silicon composite anodes for li-ion cells and NCA cathodes for li-ion cells Boron-based electrolyte additives for high voltage li-ion cells.”
Research and Development has been conducted on the Nano-scale Electrodes where the Nano-scale micro-structured electrodes are fabricated with bulk production methods, of Si or Ge. Moreover, research has been conducted for different materials such as Lithium Ion technology, membranes, fuel cell, platinum-based materials, silver zinc based materials and silver Aluminium batteries.
The thin film battery technology has been posing to be the next wave in consumer electronics where the requirement of batteries to power miniature devices has been a necessity. Moreover, the application of super-capacitors in the solar PV projects and metro rail projects especially in Asia-pacific are becoming popular.

Technology Roadmap

Evolution of Battery technologies

Competitive Landscape

Distribution Chain Analysis:

Electrical and IT distribution
Direct Sales
OEMs (Manufacturer Representatives)
Retail sales
Value Added Resellers (VARs)
Additional Channels

Competitive Factors

Competitive Factors:

Competitive pricing
Ability to customize
Global presence and manufacturing locations
Ability to provide additional features with minimal effect on price

Key Market Players

Top Players:

ABB Ltd.,
General Electric Co.,
Tesla Motors Ltd, and
Siemens AG

Other Major Market Players:

AEG Power Solutions B.V
Duke Energy
Japan Wind Development Company
LG Chem Ltd
NEC Corporation,
Nippon Chemi-Con Corporation
Panasonic
PREPE
Samsung SDI Co Ltd,
State Grid Corporation of China
Toshiba Corporation
Trena SPA

Strategic Conclusion

Battery storage system is the upcoming technology which has been seen as a prominent technology due to its ability to act according to the demand and supply of its end users.
Awareness among people giving rise and emphasis on the industry to generate renewable energy storage systems which has directly let to the retirement of coal power plant in China due to environment consciousness.
Thermal Energy Storage will be representing high growth in energy storage technology which will further attribute to Battery Energy Storage System.
Significant growth period has been observed for battery storage market especially for Lithium ion market as it has shown significant improvement followed by sodium based batteries and flow battery. This technology will be the leading technology in terms of installed power with its main markets in US, China, Japan and Germany. It will further be presented as the dominant technology in commercial, residential and consumer electronic applications.
US and Japan are the most mature markets for energy storage in terms of both their developed capacities and support policies. But the most opportunity for growth can be found in North America, Asia and then Europe.