Lux Research, an independent research and advisory firm providing strategic advice and on-going intelligence for emerging technologies, have recently released a bottom-up evaluation of energy storage technologies for grid-scale application. In their report, “Grid Storage under the Microscope: Using Local Knowledge to Forecast Global Demand”, they predict that by 2017 annual demand for grid-scale energy storage will be at 185.4 gigawatt hours globally, and worth $113.5 billion a year.
They forecast an average annual demand growth of 231% from 2012 to 2015, where upon it will slow to a modest 43% for 2016 and 2017.
In the report Lux analysed; “utility market structure, generation technology compositions, peak power demand, demand growth rate, infrastructure growth rate, penetration and growth rate of intermittent renewable energy sources, grid reliability, [time of use] electricity rates, commercial demand charges, and outage costs.” They determined that Japan, China, the United Kingdom, Germany and the state of Arizona will be the largest installers of grid-scale energy storage, accounting for roughly 58% of global demand in 2017.
Lithium-ion batteries make up nearly 80% of the energy storage market in 2012, but it is expected that by 2017 they will only capture about 13% due to advancements in cheaper vanadium redox, sodium sulphur, sodium nickel chloride, and zinc bromine flow batteries. Lithium-ion battery producers have less than five years to reduce their costs, or they risk losing a lot of market share.
Lux state that lithium-ion batteries will not be economically sustainable for grid-scale energy storage due to the fact that they were “developed for transportation applications” and are therefore “energy dense storage devices. Stationary storage projects rarely value this metric, resulting in wasted value for grid-tied Li-ion battery systems. Rapidly evolving technologies with equivalent or superior performance metrics and substantially lower costs and higher resource availability will take over the majority of the grid storage market in the coming years.”
By. Charles Kennedy of Oilprice.com