IHS: ‘Aggressively competitive’ energy storage market will see another record year in 20

Both Lux Research and IHS saw 2015 as a transformative year for storage. IHS analyst Marianne Boust told Energy Storage News that 2016 will be another record year. Image: Tesla Energy.
Analysis firm IHS has said that as of the end of 2015’s fourth quarter, the pipeline of planned energy storage projects using batteries or flywheels had reached 1.6GW, in a year which had seen a "change in stakeholder mentality" in favour of the technologies.

IHS Technology principal analyst Marianne Boust told Energy Storage News that the latest findings from her power technologies team were based on an examination of a range of storage technologies, focusing primarily on electrochemical batteries and flywheels, which were found to be reaching, or becoming closest to commercialisation in grid-connected systems. The team did not look at power-to-gas (P2G), however, as they felt that to be a longer term proposition, according to Boust.

In a guest blog for Energy Storage News in late October, Dean Frankel of another technology analysis firm, Lux Research, said 2015 was already a ‘landmark year’ for energy storage, breaking the 1GWh mark for installations during the year. Frankel had claimed that an added 1,090MWh during the year brought the world up to a cumulative installed capacity of 1,788MW and 3,460MWh of grid storage.

IHS’s Boust said that her own most recent surveys of industry associations and players had focused on the pipeline of expected projects. Full figures for the year 2015 have not been revealed by either, therefore while the two groups’ sets of statistics were not directly comparable, Boust said. Methodologies may also differ. Boust did however say she expected installed capacity to be in the region of 1.5GW as of the end of the year.

Nonetheless, with the pipeline surveyed by IHS for its Energy Storage Company and Project Database showing a 45% increase in the final quarter, adding another 400MW in that period alone. in that regard, Marianne Boust said IHS agreed with Frankel’s estimation that 2015 had been a transformative year. In addition to the actual deployments, factors like the launch of Tesla’s Powerwall were a “signal” that the technology is ready and that there is an appetite for it. Boust was speaking with Energy Storage News ahead of an appearance at the UK Renewable Energy Association event, "Energy Storage: the new market dynamic". 

'Change in stakeholder mentality'

After 2014 saw tentative trial deployments globally and the first installations through California’s famous AB2514 mandate which orders utilities to procure 1.325GW of cost-effective storage capacity by 2020, 2015 looks now to have delivered the first real wave of storage as a viable option that many had predicted.

During last year, helped by the success of solar, a “change in mentality among stakeholders” could be seen, Boust said, inspiring an energy storage industry which is already seeing aggressive competition. Like the solar industry of three years ago when cheap PV panels from China entered the global market, it is becoming increasingly difficult for manufacturers of batteries to differentiate on anything other than price. Longer duration batteries, or batteries that otherwise demonstrate stronger performance might be one answer to this question, Marianne Boust said.

Either way, IHS has predicted that 2016 will likewise be a record year, with almost half of all new installations expected to come online during the year to be deployed in the US (45%) and one fifth in Japan.