Energize Weekly, April 17, 2019
The global energy storage market posted a record 120 percent year-on-year growth, with 6 gigawatt-hours (GWh) installed. The future looks strong with capacity growing thirteenfold by 2024, according to a Wood Mackenzie Power & Renewables study.
“From 2013 to 2018, we saw fledgling market growth” with a total of 12 GWh installed, Ravi Manghani, Wood Mackenzie Power & Renewables research director, said in a statement.
“Nevertheless, these developments have shifted the minds of global regulators, policy makers, grid operators, asset operators and developers, in terms of how energy systems can be balanced,” Manghani said.
Wood Mackenzie, an international energy consultant, projects capacity rising to 158 GWh in 2024 from the current 12 GWh—half of which was installed in 2018.
An estimated $71 billion will be invested in storage—a sixfold increase—by 2024, according to the study.
The growth is coming even as market structures have struggled to keep up to with the pace of the technology, Manghani said. This has limited the number of revenue opportunities for storage.
In a number of U.S. wholesale markets, there has been a push to include batteries in the capacity markets where facilities are paid to guarantee capacity during high-demand periods or outages.
Half of the capacity installed in 2018 was “front-of-the meter,” added by utilities, including a trend to add batteries to photovoltaic solar facilities, so-called solar-plus-storage.
“We expect renewables-plus projects to become a popular trend through 2024,” the Wood Mackenzie study said. “This is especially true for solar-plus-storage projects, as the requirement for clean and dispatchable renewables is widely accepted.”
In 2018, the non-residential sector overtook the residential for installations, helped by subsidies and growth in South Korea.
Still, the prospects for the residential market continue to look strong, spurred by the continued decline in the costs of systems.
“Due to rapid system cost reductions, we expect sustainable growth to continue in markets where subsidies are being curtailed,” the report said. “With or without a subsidy, consumers are willing to pay a premium to increase their use of rooftop solar power and, in the process, mitigate the risk of electricity bill increases.”
Between 2019 and 2024, Wood Mackenzie is forecasting a compound annual growth rate of 38 percent for the market with deployments reaching 158 GWh.
The U.S. and China are expected to dominate the market with 54 percent of storage capacity by 2024.
“This will be driven by market reforms, state mandates and, most importantly, the most significant energy sector transformation since the Dash for Gas,” the sharp shift by utilities to natural gas generation, Wood Mackenzie said.
