As a result of technological advances such as artificial intelligence, blockchain, and predictive analytics, we are currently able to offer innovative storage business models that were nearly inconceivable a few years ago. With advancements in digital technologies like artificial intelligence, blockchain, and predictive analytics, battery storage is becoming an increasingly viable option. This paper—from our Global Center for Energy Storage Solutions—discusses these and other key drivers that are transforming the global energy storage market.
The deployment of battery storage is accelerated by digitization and market innovation. We examined how some of the more active nations – Australia, Chile, Germany, Japan, India, Italy, South Korea, the United Kingdom, and the United States – are currently addressing renewable development and grid modernization in our report. It was our goal to discover what has been driving the push for energy storage in these nations, what utilities and policymakers have done to define battery storage, develop storage markets, and support ongoing deployment, especially in the case of battery storage, which is at present the leading technology.
Key market drivers
Why is energy storage on the rise?
- Grid modernization.Grid modernization efforts, including the transition to smart grids, go hand in hand with the growth of battery storage. Batteries help to unlock the full potential of smart technologies, and vice versa.
- Cost and performance improvements. Especially in lithium-ion batteries, costs are dropping while performance is improving due to growing electric vehicle markets and manufacturing economies of scale.
- Participation in wholesale electricity markets. Almost every country we examined is restructuring its wholesale market structure to allow batteries to provide capacity and ancillary services. Batteries can help balance the grid and improve power quality regardless of the generation source.
- Global movement toward renewables. The adoption of battery storage solutions is also driven by broad support for renewable energy and emissions reduction.
- Phase-outs of FITs or net metering. There is an emerging trend in some countries to reduce feed-in-tariffs or net metering payments, as customers seek to maximize the value of their rooftop solar installations without these incentives.
- Financial incentives. It is becoming increasingly apparent to policymakers throughout the electricity value chain that battery storage can deliver a wide range of benefits. Many countries are increasing the availability of financial incentives for storage investment.
- National policy.As countries move toward environmental and decarbonization targets, many are turning to renewable energy storage to reduce their dependence on energy imports.
- Desire for self-sufficiency. It is not just about finances that motivate people to purchase storage systems. In Germany, for example, ecological motives, independence from utilities, resiliency, and technical curiosity are all thought to be motivations.Self-sufficiency is also a strong motivator in Italy, the United Kingdom, and Australia.(Visit Energy Storage System Manufacturer by clicking here)
Global battery storage market challenges
A number of barriers to battery storage deployment can be attributed to the speed with which battery storage technologies and applications are evolving, as well as to the multiplicity and flexibility of battery storage. They include:
- Lack of standardization.As early stage markets often have diverse technical requirements, processes and policies, battery suppliers are no exception, making standardization a roadblock.
- Perceptions of high prices. Because costs have been dropping so rapidly, decision-makers may still believe batteries still cost the same as they did a couple of years ago, or even six months ago.
- Incomplete definition of energy storage. Fast-acting battery storage is experiencing an identity crisis, with stakeholders and policymakers grappling with how to define it.
- Outdated regulatory policy and market design. As with all emerging technologies, regulatory policy lags behind the energy storage technology that exists today. In addition to wholesale market rules, retail market rules will need to be updated as well, especially as residential, commercial, and industrial interest increases.
