The nascent grid storage market is plagued by regulatory uncertainty, unproven technologies, high costs, and a risk-averse client base. Yet opportunities exist. Utilities must manage an increasingly variable load of intermittent renewable energy sources as well as high costs associated with upgrading aging infrastructure. Commercial customers are dealing with demand charges and outages that cost the United States alone between $80 billion and $188 billion annually. Plus, residential customers in markets with time-of-use pricing have an opportunity to arbitrage their energy consumption to reduce their electricity bills.
This week’s graphic appears in the latest report (Client registration required) from Lux Research’s Smart Grid and Grid Storage Intelligence service. The report builds on the service’s dynamic Grid Storage Demand Forecaster to evaluate the internal rate of return (IRR) and levelized cost of electricity (LCOE) of eight grid storage technologies in six applications throughout 44 countries and all 50 US states.
The report’s “Base Case” scenario models the potential demand for emerging grid storage technologies from 2012 through 2017 using current market conditions. Overall, it finds that the global potential for grid storage by 2017 is $113.5 billion, accounting for 185.4 GWh (or 51.89 GW) of capacity.
However, while demand remains strong through 2017, growth will not occur evenly throughout the sector. Renewable energy shifting shows greatest potential among applications, snatching up to $61 billion, or 54% of the demand, in 2017. Meanwhile, in terms of geography, the Asia-Pacific region and EMEA (Europe, the Middle East and Africa) currently hold 88% of the market; but the Americas’ share will more than double from 12% to 25% by 2017, bringing the three global markets closer to parity. Lastly, growth will vary among grid storage technologies as the market shifts from one dominated by molten salt batteries to one with a more diversified mix that also includes Li-ion, advanced lead, and flow batteries.
Source: Lux Research report “Grid Storage under the Microscope: Using Local Knowledge to Forecast Global Demand.”