Global Energy Market Overview – a summary of a report from Australia’s Energy Storage Council

Manufacturers are racing to get ahead in the energy storage space. Image: ASD Sonnenspeicher.
In early October the Australian Energy Storage Council (ESC) released the Global Energy Storage Market Overview & Regional Summary Report to all ESC Members.

The report shows that it is a fascinating time for energy storage, with several big trends driving the growth of the energy storage market here and around the world.

These include:

The time has come for electric vehicles (EVs) – subsidies for EVs in China (which has a target to produce 10 million EVs by 2020 alone), and a rapidly growing global market is fueling a massive scaling up of battery manufacturing.
Costs are falling rapidly – economies of scale are leading to rapid decreases in the cost of battery technology (a spin-off benefit for other applications).
Micro-grids becoming economical – as grid infrastructure costs climb, and areas that do not have grid access are electrified, micro-grids supported by distributed energy generation and energy storage are becoming the rational economic choice.

The International Renewable Energy Agency (IRENA) has estimated the world would need 150GW of battery storage by 2030.

And there are immediate market opportunities in places like Australia, linked to solar PV, and in edge of grid, micro-grid and off grid applications. In off grid applications alone, the Australian market is forecast to grow to 1GW of installed storage capacity. We are also seeing the first energy storage support programs, with Adelaide City Council launching a subsidy program to reduce the up-front cost of battery installation.

In manufacturing globally Japanese giants Toshiba and Panasonic are vying with South Korean conglomerates Samsung and LG for leadership in the fast-growing battery energy storage market for power generated from renewable sources such as solar and wind. Other contenders in energy storage such as Nissan’s AESC, Mitsubishi’s joint venture partner GS Yuasa and Chinese maker BYD (with Warren Buffett’s Berkshire Hathaway group as a key shareholder), are concentrating on the market for battery-powered electric vehicles.

No matter how you look at it, technology, economics and government policy are coming together to unleash a new force in global electricity in the form of the global energy storage market. Some commentators are describing this as the fourth leg of the electricity system. It is bound to have profound effects on the nature and operation of grids worldwide.

The report also examines the various technologies, their current costs and price projections in detail, as well as key markets. For instance, did you know that in 2015 220 MW of energy storage is projected to be installed in the US, and California alone has a 1.3GW target for 2020?

Last year China had a cumulative total of 84.4 MW of energy storage installed, and government policy is creating an environment for significant market growth. The country is also on track to produce 10 million electric vehicles domestically in the next four and a half years.

With strong subsidies, Japan’s goal is to produce half of the world’s batteries by 2020. Japan is also innovating with the world’s only sea-water pumped hydro installation.

And how about this for a key market opportunity? In India approximately 70 per cent of the 400,000 installed telecommunications towers lose power each day.

The Global Energy Storage Market Overview & Regional Summary Report was prepared in collaboration with major international organisations and experts including the Australian Energy Storage Council, California Energy Storage Alliance, China Energy Storage Alliance, DNV GL, India Energy Storage Alliance and the Australian National Electrical Communications Association.