- 16 April 2019 21:44
Southeast Asia Energy (Electricity) Storage Market Is Expected To Grow At A Cagr Of Approximately 35%
The global energy (electricity) storage market was valued approximately at US$ 1 Bn in 2017 and is expected to register a CAGR of 37.6%. An Energy Storage System (ESS) stores electric energy, which can be utilized later. ESS improves energy efficiency by enhancing the quality of renewable energy that results in stabilization of a power supply system. Electrochemical batteries are a rapidly growing segment in the energy market. Batteries come in a wide array of sizes, and are specific for numerous applications. With costs falling as scale ramps up, applications of these batteries are expected to witness rapid growth.
Global Energy (Electricity) Storage Market Dynamics:
Increasing demand for power from remote locations such as small diesel generators are widely used to generate power in remote power systems is a key driving factor for growth of the Energy (Electricity) Storage Market. Electricity generation methods and technology can vary according to region type and availability of renewable resources such as wind, solar, and water. Costs associated with diesel powered electricity generation is relatively high as compared to grid-connected systems. In addition, increasing trend of shifting from high-cost diesel fuel to variable renewable resources, owing to which demand for both energy storage and sophisticated operations controls is expected boost energy storage market. Moreover, favorable regulatory scenario such as initiatives by governments of various countries, especially in developed and some developing countries for encouraging adoption of more viable and less destructive or safer methods of power generation. The objective being to reduce carbon footprint, air pollution levels, and to ensure access to more sustainable resources for power generation. These factors are further expected to fuel the market growth.
However, high cost associated with new storage technology deployment and new modeling challenges could restrain the market growth over the forecast period.
Analysis By Segmentation:
On the basis of product type, the lithium ion battery segment is expected to contribute major revenue share in the global energy (electricity) storage market, and witness highest CAGR of over 35%, in terms of revenue over the forecast period, owing to increasing use in residential and commercial sectors. Different types of Li-ion batteries such as organic Li-ion and semisolid Li-ion batteries are under R&D, which is further expected to fuel the market in the near future.
Among all the application segments, the residential segment is expected to register highest CAGR of over 40%, owing to mass adoption of residential solar photovoltaics, falling system cost, increasing power prices, and focus on using clean and locally generated electricity are some factors fueling demand for residential energy storage systems. In addition, growth of the market is also driven by government subsidies, incentives, and evolving utility rate structures in countries around the world.
North America market is expected to dominate the global energy (electricity) storage market, and is expected to account for largest market revenue share as compared to that of markets in other regions. North America market is also expected to witness the highest CAGR growth of over 35% during the forecast period owing to policies. The Storage Act of 2011, which provides 20% investment tax credit of up to US$ 40 Mn per project is connected to the electric grid and distribution system. Additionally, the Act provides 30% investment tax credit of up to US$ 1 Mn per project to businesses for on-site storage (ibid). The Act also provides 30% tax credit for homeowners for on-site storage systems to store off-peak electricity from solar panels or from the grid for later use. In addition, incentives for systems that provide summer on-peak demand reduction are US$ 2,100/kW for battery storage technologies. Proposed incentives are capped at 50% of installed project cost, plus bonus incentives are available for large (>500kW) projects. Dominance by North America market is expected to continue over the forecast period. Driving factors for growth of the North America market include presence of key players in the region such as NEC Energy Solutions, NEC Energy Solutions, The AES Corporation, S&C Electric Company, SolarCity Corporation – (Tesla, Inc.), General Electric Company and Princeton Power Systems, Inc.