Energy storage becoming economical choice for utilities

November 24, 2015 | By

The rapidly decreasing costs of battery energy storage systems (ESS) are driving a trend in the energy storage industry similar to that seen in solar PV over the last decade.

That is according to Navigant Research, who says that the energy storage industry has been evolving at different paces and with a focus on different applications and technologies in countries around the world.

While system costs are still one of the biggest barriers to the industry's growth, declining prices are opening up new use cases and geographic markets. Navigant expects prices to continue declining over the next decade, which will enable energy storage systems to be an economical choice for more utilities and end users.

The growing amount of variable renewable energy generation being deployed in major markets worldwide, primarily solar PV and wind energy, is also a significant factor driving interest in grid-tied energy storage technologies. These variable forms of generation present new challenges to the electrical grid, but energy storage is becoming an increasingly flexible and cost-effective tool for grid operators to help manage instability on their networks.

Navigant Research projects that several countries will see substantial growth in energy storage deployments in the coming decade -- with the United States and China leading. Five country-level markets in Asia Pacific are expected to experience the largest increases globally. In fact, Navigant predicts new energy storage deployments in Asia Pacific's five major markets will total nearly 37 GW from 2015 to 2025.

"As the industry expands, different countries are expected to rely on different mixes of energy storage technologies and applications best suited to serve the needs of their local electricity grids," said Alex Eller, research associate with Navigant Research. "As expected individual market leaders for energy storage, the United States and China are projected to have a more balanced mix of utility-scale and distributed storage deployments, while other countries are likely to heavily favor one application."

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