Battery Cost Reductions Lead To Rise In Battery Energy Storage Market

FEB 21 2016 BY MARK KANE 11

General Electric Lithium-Ion Energy Storage System

General Electric Lithium-Ion Energy Storage System

The energy storage system market is expanding at a fast pace, and 2016 could double the world’s power output of installed ESS.

ESS is becoming dominated by lithium-ion batteries – cost reductions of those batteries, combined with government funding programs and utility tenders, brings tremendous growth of orders, according to IHS.

The global pipeline of planned battery and flywheel (who still uses flywheels these days?) projects had reached 1.6 gigawatts (GW) in Q4 2015 (up 45% compared to Q3 2015).

IHS doesn’t reveal the MWh of ESS because they measure installations in MW or GW. That makes comparison to EVs more difficult.

45% of new ESS installations are planed in the U.S. followed by Japan with 20%.

“Several large-scale projects were announced at the end of 2015, signaling that the storage industry is shifting from research-and-development demonstration projects to commercially viable projects. These projects include a 90 MW order by major power producer STEAG from LG Chem, to compete in the primary reserve market in Germany, and 75 MW of contracts awarded by PG&E to a diverse mix of companies using various established and emerging technologies.

The IHS Technology Energy Storage Project and Company Database currently tracks approximately 900 megawatts (MW) of global grid-connected battery projects that are expected to be commissioned in 2016, supporting a predicted doubling in the global installed base for grid-connected energy storage in 2016. Planned storage installations in the United States will make up nearly half (45 percent) of planned installations, followed by Japan at 20 percent.”

Marianne Boust, principal analyst for IHS Technology said:

“Continued battery cost reduction, government funding programs and utility tenders have helped spark a notable acceleration in the global energy storage market, and IHS recorded an increase of nearly 400 megawatts in the global pipeline during the final quarter of 2015. Suppliers and developers around the world are preparing for a record year in 2016, with significant growth projected in a wide range of regions and market segments.”

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11 Comments on "Battery Cost Reductions Lead To Rise In Battery Energy Storage Market"

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This is good news

That’s right, now coal fired power plants can become obsolete.

Large grid batteries at wholesale electric prices have little use when it is far easier to just produce more and cut demand or follow the load.
With recent NG CCGT’s tech that follow the load to 50% efficiently, the need for what little battery might have been, will
be moot.
Instead will be home, building, factory, campus, batteries and peak, on demand generation along with EV’s V2G will be cheaper in most cases .
Now for microgrids, home, building use, batteries are hard to beat at retail prices for power.
Other large scale sinks like making batteries, metals, synfuels, heat/ice
Biomass, waste, syn, waste/stored heat fueled motors will cover much of the peak, on demand load.
And many other techs that just need production besides batteries which are mostly for retail pricing.

You miss the main purpose of those ESS.
Voltage and reactive power control.
Just that is enough to pay itself.
Next come power for transient load or unload of intermittent source, wind, solar or big manufacture switching.
Those are the thing that cost utility a lot to control.
Last come energy, if it come at all.

Ah, I forgot frequency stabilization.

Djoni said:

“…power for transient load or unload of intermittent source… big manufacture switching.”

Note that it will benefit industries which have intermittent high power demands to have a relatively modest amount of short-term storage, so they can avoid high power surcharges which the utilities charge.

But as several people have noted, none of these applications are for large-scale, long-term grid energy storage. The cost/benefit analysis shows much better return on investment for relatively small storage using batteries.

It’s much, much harder to make the case for spending huge amounts of money on large-scale battery storage that could store a large portion of the power needed for hours or days, for the entire grid in a region. Or to put it another way: Batteries are still much too expensive for such large-scale energy storage installations. I hope inventors can find some solution better than batteries for that.

This report seems to be missing a number of installations using CSP and other technologies, even if it can forgiven for not mentioning the 1,332-megawatt Ingula pumped hydro plant, as it is not yet complete.

Battery storage systems are useful for price insensitive short term storage; as these opportunities are taken the market will eventually shift to more cost sensitive, larger deployments, where other technologies will dominate.

Great news, now can we start shutting down coal fired power plants in the USA. US electricity producers need to act fast before distributed generation of renewable energy puts them out of business.

This is for grid balancing, not long term storage. Daily top rate shaving at unsubsidized wholesale level would be kind of revolutionary for lithium batteries.
For comparison, natural gas storage capacity in the US was 9,233,352 Million Cubic Feet in 2014. It is about enough to meet seasonal demand fluctuations. It is 2,710,000 GWh if you convert units (not accounting for 30-50% natural gas plant efficiency to produce electricity).

If you need to cycle one million times a flywheel makes sense. It all depend on application.

I did a simulation for the french 2014 grid at a step of 30 minutes, and this country needs between 1 to 2 tera Wh of batteries to stabilize the grid with renewable only (hydro+solar+wind).
Well it’s only 30 millions cars with an average 60 kWh with V2G… But it’s about one thousand more than current WW storage market.
Still a long way, but on the right track.