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Trendsinenergystoragemarkets
04/2013,ENERGYSTORAGE|BY:ANISSADEHAMNA

Storagemarket:Marketactivityinenergystorage,aswithmostcleantech
sectors,istiedtogovernmentstrategiespertainingtoindustrialinnovation.
Thethreeregionswiththemostinnovativeanddynamiceconomies,Asia
Pacific,Europe,andNorthAmerica,havedevelopeddistinctstrategiesfor
cleantechand,morespecifically,forenergystorage,asAnissaDehamna
fromPikeResearch(apartofNavigant)explains.

SelectLanguage

Graphic:SolarpraxisAG/HaraldSchtt

Someofthemostexcitinginnovationsarebasedonsoftwareandcontrol
systems.
Photo:SolarpraxisAG/AndreasSchlegel
Graphic:SolarpraxisAG/HaraldSchtt

Someofthemostexcitinginnovationsarebasedonsoftwareandcontrolsystems.
Photo:SolarpraxisAG/AndreasSchlegel

Understandinghowtheenergystorageindustryispoisedtogrowandchangeoverthenext
yearswillhelpthesolarPVindustryunderstandhowandwhenstoragewillcontributeto

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therenewablessector.Industrialpolicyhasaprofoundeffectoncleantechnologymarkets
andsetsthetoneforwhataregionwillcontributetothestoragemarketbywayof
technologyandinnovation.Oncethetechnologyofferingsaredecided,themarkettakes
over.Sincestorageisusedtofixanexistingproblemintheenergysystem(incontrastto
solarPV,whichcreatesnewvalue)thetechnologiesthatsolvethelargest,oldest,andmost
pressingproblemwinthemostmarketshare.However,someofthemostexciting
innovationsarebasedonsoftwareandcontrolsystems,whichbringtomindthe
computinganalogyofdistributedandvirtualenergynetworks.
Generallyspeaking,governmentsinAsiaPacifichavebetonspecifictechnologiesinstead
offundinginnovationingeneral.Europe,inkeepingwithitscollaborativeandcooperative
approach,hasnotchosenspecificcompaniesortechnologiestofundbutcountrieswithin
Europehavesetclearnationaltechnologyagendas.Finally,NorthAmericahasoptedto
financeoverallinnovationratherthananyspecifictechnology.
TheR&DinvestmentstrategyinAsiaPacifichasbecomemoreapparentasAsian
economieshavedemonstratedafocusonadvancedbatterytechnologies,withtheintention
ofdevelopingexportindustries,whereastheNorthAmericangovernmentshavepursued
policiesoffundinginnovation.Consequentlythisregionisthemosttechnologicallydiverse
intheindustry.Incontrast,Europeangovernments,alongwiththeEuropeanUnionasa
whole,aremostconcernedwithmatchingtheirambitiousenergymixandefficiencytargets
withthebestavailabletechnologiesregardlessofprovenance.
InitsEnergyStorageTracker,NavigantResearchtrackstheprojectsintheenergystorage
industryonabiannualbasis(currently757inall).Usingthisdata,wehaveidentified
severalkeytrendsintheenergystoragemarket,includingtechnologybias,diversityof
technologyovertime,andthemostactiveendusemarkets.
TheAsiaPacificregionhasdemonstratedatechnologybiasforeitherlocallydevelopedand
manufacturedtechnologiesorestablishedtechnologies,suchastraditionalpumped
storage,thatrepresentamuchlowerorbetterunderstoodtechnologyrisk.Thisfocus
indicatesthattheenergystorageindustryintheregionwillbedrivenbyoneoftwoforces:
thedeterminationtomitigatetheconsequencesofarapidlychangingenergyprofile,orthe
mandatetodevelopanexportindustry.
WhileAsiaPacificistheclearwinnerintermsofregionalmarketshare,theregionislargely
stagnatingintermsofnewprojects.NorthAmericaandWesternEurope,bycontrast,are
characterizedbymuchmorenewactivityinthespace.

DiversityinEurope
ThetechnologyprofileforEuropeismorediverse.Fornow,EasternEuropeislimitedto
traditionalpumpedstorage(20installationstotaling9,383megawattsofstorage).
However,Europeasawholehasdeployedasmanyas11differenttechnologies,compared
to8inAsiaPacific.Moreover,Europehasintegratedemergingtechnologies,suchas
hydrogenandmoltensalt,thatarealtogetherunknowninAsiaPacific.
ThemosttechnologicallydiverseregionforenergystorageisNorthAmerica,where
companiescurrentlydeployasmanyas15technologies,reflectingamarketdrivenby
innovation.NorthAmericaisalsohometomanymorestartupsspunoutfromuniversity
researchthaneitherAsiaPacificorEurope,wheremostoftheresearchistiedtonational
laboratories.
Theseexamplesprovideanoverviewofwhichtechnologiesaredeployedandconnectedtoa
grid,butthattellsonlypartofthestory.Forinstance,theprofilesofthedeployed
installationsdonotindicatewhichtechnologiesareinthepipeline,thebreadthanddepth
ofinnovationacrosssupplychains,orwhichendusemarketsarebenefitingthemostfrom
theseadvances.
Tosetthestage,thereare113,722MWoftraditionalpumpedstorageinstalledglobally,
withanother2,330MWofdeployedcapacityconsistingofneworalternativepumped
storage,compressedairenergystorage,sodiumsulfur(NaS)batteries,moltensalt,
lithiumion(Liion)batteries,flowbatteries,leadacidbatteries,andflywheels.
Bywayofcomparison,thereare37,433MWofannouncedprojects,representingthe
pipelineofenergystorageprojectsglobally.Thetechnologicaldiversityinthepipeline
includespilotsofhybridbatterytechnologies,zincairbatteries,metalairbatteries,and
sodiumionbatteriesnearlyallofthemintheNorthAmericanmarket.Infact,North

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Americaleadstheglobalmarketintermsofannouncedstorageprojectcapacity.

Softwareandcontrolsystems
Advancesinenergystoragedevicesarenottheonlymarkersofinnovation.Companies
specializinginsoftwareandcontrolsystemsforenergystorage,suchasAmpard,
GreensmithEnergy,andGELI,arebringingagreatdealofinnovationtomarkets.Firms
withdisruptivebusinessmodelssuchasAESEnergyStorageandSolarCityaremaking
technologymoreaccessibletoconsumers.AllofthesecompaniesarebasedinEuropeor
NorthAmerica.

Endusemarkets
Energystorageoptimizesanexistingsystembeitabuilding,thegrid,acar,oratransit
network.Asaresult,itcanbedifficulttogetahandleonwhichendusemarketsare
leadingtheindustryintermsofinnovation.
Byfartheleadingmarketsegmentforenergystorageisbulkstorage.Althoughbulkstorage
islargelymadeupof160traditionalpumpedstorageinstallations,whichallprovideload
levelingandpeakshiftingservices,bulkstorageisthemosttechnologicallydiversemarket
segment,with13technologiesrepresentedglobally.Loadlevelingandpeakshiftingisthe
originalapplicationforenergystorage.Thisapplicationaddressesthemostbasicchallenge
foragridoperator:matchinggenerationandload.Indeed,upuntilveryrecently,grid
operatorsconsideredenergystoragetobeanassetwhoseprimaryfunctionwouldbeto
smoothoutelectricitydemand,inordertobettermatchthesteadyoutputofthermal
generationplantssuchascoalandgas.Intheabsenceofintermittentassetssuchaswind
andsolar,therewasalimittohowusefulenergystoragecouldbetothesystem.
Thecommercialbuildingsmarket(excludinguninterruptiblepowersupplyapplications)is
thesecondmostactivemarketsegment,reflectingdemandforenergycostmanagement
solutionsfromcommercialandindustrialcustomers.Energystorageisanattractive
optionforthosestrugglingwithenergybillsthatareincreasing,eitherbecauseofrising
energypricesorduetotimeofuseprograms,suchasdemandchargesordynamicpricing,
thatareerodingprofits.Storagecanalsobeanattractiveoptionforbusinesses,suchasthe
semiconductorindustry,thatrelyheavilyonsteady,highqualitypower.Although
commercialandindustrialcustomersarewillingtoinvestintechnologytoreducecosts,
thisgroupofcustomerstypicallypreferssolutionswithlesstechnologyrisk.Asaresult,
therearerelativelyfewtechnologiesparticipatinginthismarketsegment.
Thethirdprimaryapplicationssegment,ancillaryservices,isanascentmarketsegmentfor
theenergystorageindustry.Itincludesdiverseapplicationsthateithermaintainthe
qualityofenergyonthegridoractasareserveorbackupforthegrid.Theactivityinthis
segmentreflectsthreekeytrends:increasedvolatilityinloadandgeneration,liberalization
ofmarketstructuresandutilityattitudes,andahigheropportunitycostfordelivering
ancillaryservicesusingthermalunitsinthefaceofrisingfuelcosts.Intermsof
technologies,thismarketsegmentishighlydiverse,withasmanyasseventechnologies
totaling211MWdeliveringancillaryservicestothegridgloballyattheendof2012.
TheindustrialpoliciesofAsiaPacific,theEuropeanUnion,andNorthAmericawillsetthe
agendaforinnovationintheenergystorageindustryforthenextfivetotenyears.Asia
Pacificiscommittedtobuildingexportindustriesbasedonadvancedbatterytechnology
thiswilllimittheamountofinnovationfromAsiaPacificinotherareas,suchassoftware.
TheEuropeanUnionisfocusedonrenewablesintegrationchallenges,andalthough
storageisausefulanchortechnology,theEUscontributiontothemarketwillbe
concentratedinintegration.Finally,NorthAmericaisbettingoninnovationfromevery
quarter,withoutagenda.Thisregionwillcontinuetobeatthevanguardoftechnologyin
theenergystoragespacebutthiswillnotnecessarilytranslateintoasolidandgrowing
industry.

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