Battery Cost Reductions Lead To Rise In Battery Energy Storage Market
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.”