Global energy storage boom gathering speed: report
Big solar, China and home-buyers incentives together heating market expected to be worth $8.4bn in 2025, says IHS Markit
Utility-scale solar, China’s mushrooming renewables build-out and new residential incentives are combining to drive an increasingly bullish international energy storage market, according to new figures from IHS Markit, which suggest 4.3GW of grid-connected batteries will deployed around the world tbe his year and more than 10.6GW annually by 2025,.
The US analyst group forecasts the market for grid-connected energy storage hardware will in the process grow to $8.4bn by mid-way through the next decade, from the $3.7bn in 2018, a compound annual growth rate of 12%.
“The year 2018 set a record for deployment of grid-connected battery energy storage,” stated IHS. “Global installations almost doubled, especially driven by growth in South Korea in the first half of the year.
“In 2019, IHS Markit already observing a significant acceleration in market activity driven by significant regulatory and policy developments, as well as the diversification in major applications and geographic activity.”
IHS Markit expects demand for solar-plus-storage plants in the US – kick-started by the investment tax credit (ITC) – and peaking capacity coverage to this year drive the country into overtaking current market-leader South Korea. These two markets along with China and the UK, by its calculations, accounted for more than more than 60% of total installations in 2018.
The analyst notes that it foresees the expiration of feed-in-tariffs accelerating the growth of residential energy storage in Japan and Australia.
“Historically, specific countries were dominated by utility-scale projects (US) or behind-the-meter residential installations (Japan or Germany). However, IHS Markit predicts a more even split between sitings to evolve.
“Stronger drivers for renwable co-location mean that … front-of-the-meter installations [could] account for more than 50% of annual additions over the forecast period.”
Lithium-ion (Li-ion) battery prices that have cratered 35% to $187/MWh since the first half of 2018, according to BNEF, led to over-demand last year, but IHS Markit expects pressure on the market to soften as cobalt prices have decreased, new manufacturing capacity has been added and a continued shift towards lithium iron phosphate “has influenced global average pricing”.
“Supply, especially in Europe, remains constrained, as total demand for Li-ion batteries continues to accelerate in the stationary and EV markets. Li-ion is the most cost-effective technology, but as long-duration applications are becoming more valuable, alternative technologies will become more competitive,” said IHS Markit.
Source: rechargenews
