By Mike Stone
The Energy Storage World Markets Report has been produced in partnership by Dufresne, the organisers of the Energy Storage World Forum, and analyst firm Azure, which is currently tracking storage projects that amount to around 3GW.
“Over the next 10 years,” states the report, “the combination of growing policy support and the emergence of commercial markets will propel the market into a new stage of growth.”
There are encouraging signs of market development and growth in different territories around the world, showing a highly diverse range of drivers, approaches and conditions, it says.
Each country surveyed is showing signs of encouraging storage development, albeit for differing reasons. As an example, both the UK and South Korea were singled out as providing good ancillary service markets.
Australia’s high level of solar penetration should provide increasingly ample opportunities for storage. In addition, Australia is the only country that is seeing significant growth, without being driven by subsidies.
In terms of government support for energy storage, Germany leads the field worldwide. These positive signs have translated into economically feasible deployments as of 2014 in Australia, Japan and the US.
The report predicts that between this year and 2018, storage in both France and Germany will become viable from an economic point of view.
The variable value of storage
Adriana Laguna-Estopier of UK Power Networks, for example, will address the question in her talk on May 10, To What Extent Is Utility-Scale Battery Energy Storage Already Bankable Through Track Record of Performance And ROI?
As with many other factors, the value that storage can add currently differs from country to country.
As an example, Australia and Italy were the two countries where storage has demonstrated the highest value for bulk electricity time shifting, although this service is unlikely to become economically viable until around 2020.
In addition to load shifting, both countries also are coming close to demonstrating near-grid parity for solar-plus-storage self-consumption with small-scale PV. And they’re not alone, with a similar story in Germany and the UK.
One area where storage has yet to demonstrate near-term viability is integration with wind generation. Although benefits of doing so are set to rise, they will remain too low to attract investment without subsidies.
Wind integration and wholesale pricing
A significant factor in the future integration of storage with both wind and solar is the uncertainty of wholesale market pricing. This, says the report, is a major reason why developers are currently unwilling to invest in storage.
The US is clearly still the centre of the world when it comes to innovation in both energy policy and storage technology, the latter thanks largely to Californian venture capital and US Department of Energy grants and loan guarantees.
As an energy-poor but technologically rich island nation with a growing renewables sector, Japan has much to gain from increasing its storage deployment.
Its government is providing considerable support to storage and the Ministry of Economy, Trade and Industry has recently commissioned two massive battery deployments to better integrate a rising tide of solar energy into the grid.
China’s energy storage market is some years away from going mainstream but has enjoyed strong recent growth. The country is exploring storage as one way to overcome the shortcomings of its largely coal-fired generation fleet.
As the world’s leading battery manufacturer, South Korea has the technology to back up plans to boost grid-scale and distributed energy storage for load-leveling and frequency regulation, despite having a low level of renewable energy.
Australia’s burgeoning home solar market will be a decisive factor in its adoption of storage, although the industry is taking time to get into gear.
Right now, the country has only 18 major energy storage projects, of which six are pumped hydro, eight are batteries and four are flywheel projects.
In Europe, Germany and Italy are highlighted as countries to watch, thanks to the implementation of megawatt-scale demonstration projects.
Germany’s need for storage continues to grow, thanks to its long-term policy of transition to renewables. Integration of renewables is also a key driver in Italy.
Storage in Europe
Elsewhere, Europe is a more mixed picture. Spain is lagging in storage, despite being a leading European nation in terms of renewables penetration.
France has technological advantages, including being home to leading battery manufacturer Saft, but has yet to fully capitalise on its merits.
The UK is also a country to watch, with one of the world’s most advanced deregulated electricity markets and ambitious renewable energy targets for 2020.
“In the UK, distributed energy storage is expected to become a growth sector as the country attempts to maintain grid stability,” notes the report.
- Get your copy of the Energy Storage World Markets: 2014-2020 report now. And don’t forget to sign up for the Energy Storage World Forum in Berlin from May 8 to 12.