The combination of increasing-efficiency and decreasing-cost will keep driving demand for energy storage in 2017 and beyond.
Lithium-ion
Lithium-ion technologies accounted for more than 95 percent of new energy-storage deployments in 2015. There is no reason to believe that this trend will not continue. Given all the options on the table lithium-ion batteries have proven to be the most suitable type of storage for EVs and stationary energy across the grid, from large utility-scale installations to residential systems.
Although most insiders suggest that the battery storage space will continue to be dominated by lithium-ion technologies there is still the very real possibility that some novel storage configuration will emerge.
As explained by Matt Roberts, executive director of the ESA, "Global trends are feeding into that…partly because major applications of today lend themselves to batteries. Equally, lithium-ion dominates on account of cost; but it has reached that cost because of demand driving production."
Cost
Affordable storage is the missing link in intermittent renewable power. The cost per kilowatt-hour (kWh) is currently around $300 but it was $1,000 in 2010. According to some estimates costs could be $160 per kWh or less by 2025 and even cheaper thereafter.
As reported in a Renewable Energy World review of the storage market, Bloomberg New Energy Finance expects battery technology to fall to $120 per kWh by 2030.
We are seeing decreasing costs and increasing density in both the stationary energy storage sector and EVs. The release of the Model 3 is a signal that this trend will continue to drive growth. A report in Ward’s Auto says EV battery prices are falling faster than expected and could be lower than $100 per kWh by 2020.
Global
In 2014 NEC Energy Solutions predicted that energy storage would be worth $20 billion by 2020. Others expect the lithium-ion battery sector will be worth $54 billion by 2024.
Alex Eller, a research analyst at Navigant Research says that in 2017 he expects to see the global market grow 47 percent over the record set in 2016. Through 2020, Navigant forecasts over 29.4 GW of new storage capacity to be deployed worldwide across all sectors, and a compound annual growth rate of 60 percent.
According to a McKinsey article titled, "The new economics of energy storage" global opportunity for storage could reach 1,000 gigawatts in the next 20 years. The large-scale deployment of energy storage is expected to radical alter electricity markets.
US
According to a report from the Energy Storage Association (ESA), deployed non-hydro energy storage reached 2,276 MW by the start of 2016. Last year we saw 284 percent growth in the US energy storage market as measured by megawatt-hours. The ESA anticipates that this record setting growth will continue in 2017.
Greentech Media cites a report by KEMA that indicates that a record-setting 221 megawatts of storage capacity was installed in the US in 2015 , more than three times as much as in 2014. The US market alone is expected to be worth $2.5 billion by 2020. That is six times as much as in 2015.
The biggest growth is expected to be in distributed storage and grid integration of renewables. Even without tax incentives the KEMA report predicts that we will see 820 megawatts to facilitate integration of renewables.
A Massachusetts energy storage report titled, State of Charge, claims the cost of procuring 1.7 GW of energy storage will be between $970 million and $1.35 billion. However, the report also suggests that this could yield $2.3 billion in system benefits to ratepayers and $1.1 billion in market revenue to the resource owners.
UK
The latest Energy Entrepreneurs report from SmartestEnergy suggests that UK battery capacity could grow by as much as 100 times by 2020. In 2016 there were only 20 megawatts of commercial batteries in operation but 578 megawatts of capacity is scheduled to come online by 2020. The combined capacity may be as high as 2.3 gigawatts.
The UK is investing £246m in battery technology as part of a project called the "Faraday Challenge" This initiative, which includes a competition, seeks to establish the UK as world leader in battery technology.
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