It may seem shocking that China, with large manufacturing capacity for relatively low-cost lead-acid and lithium-ion batteries, comprises only 1% of the global installed megawatts of emerging grid storage capacity according to the recently published Lux Research Grid Storage Tracker.* While the North American market has seen tremendous movement on a regulatory* front* for energy storage in the past months, grid storage remains in the pilot stage in China as the Chinese government focuses on electric vehicles.* Is China snubbing the grid storage market and, if so, what does that mean for clients looking towards the Chinese market?
The European, North American, Korean and Japanese markets offer much stronger bets than the Chinese markets for near-term growth of grid storage. Due to a mixture of domestic storage technology developers, relatively swift regulation and government spending, these markets will continue to overshadow China’s grid storage market in the immediate future. However, the tides can, and will shift with staggering speed when China makes its move. Today’s leading markets rely on regulation, market pricing and consumer demand, resulting in slow, steady market growth. Conversely, the Chinese market will see immediate and explosive growth once government and the State Grid Corporation decide to turn their attention to grid storage.
With a growing pool of domestic battery supply and tremendous government funding, the Chinese market can lead global production and consumption of grid storage technologies, just as the world has seen it do in the automotive and solar sectors. The message is clear: clients need to integrate themselves into China’s domestic battery supply chain in order to capitalize on this growth.
However, these regional dynamics offer a valuable insight for clients looking to sell products outside of China. Specifically, the grid storage market offers strong growth for lithium-ion and other storage technologies outside of China, while other existing markets for storage remain China-focused. Based on market conditions earlier in 2011, Lux forecast that electric bikes and heavy electric vehicles will dominate demand for lithium-ion, with the vast majority of demand and supply coming from China. Conversely, the grid storage market is growing today in North America, Europe, Japan and Korea, making these regions primary focal points for companies looking to generate revenues outside of China.
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