Emily Holbrook
(Credit: Pixabay)
Despite the current covid-19 pandemic, the medium-term future for energy storage remains bright. That’s according to Frost & Sullivan's recent analysis, “Outlook for the Global Energy Storage Industry, 2020,” which predicts the market to decline, as project delays, including the lack of access to residential and commercial clients, takes its toll. However, the medium-term market should show strength.
The report says the US and China are set to be the biggest markets for energy storage in terms of installations and installed capacity. South Korea, which was the global leader in energy storage solutions in 2018, is likely to drop a few positions but remain one of the top five along with Germany and Japan. Among end-user categories, strong progress is forecast across residential, commercial and industrial and grid-scale applications. High electricity prices, declining feed in tariffs, increasing grid demand charges and declining technology and project costs all mean that energy storage is becoming a much more attractive proposition for consumers from households to heavy industry.
The report also provides suggestions for energy storage system companies to stimulate growth:
- There will be a growing market for retrofitting existing solar PV systems with additional energy storage capacity, while new solar PV installations will increasingly be paired with a storage system at the time of purchase. To leverage this opportunity, storage manufacturers should develop strong relationships with solar system integrators and installers.
- Leveraging big data analytics will enable utilities to determine likely demand in a particular locality and deal with fluctuating customer loads.
- Battery manufacturers must forge partnerships with energy management solution providers to offer in-built, cloud-based battery monitoring and fault diagnosis platforms with relevant cybersecurity measures to continuously monitor and optimize the performance of a large pool of batteries.
- Battery manufacturers must incorporate machine learning algorithms to develop smart self-learning systems that can optimize storage depending on renewable loads.
- Companies should either develop or partner with the providers of virtual power plant solutions, as these will become increasingly important in the decentralized energy markets of the future.
- Integration of innovative business models and multiple revenue streams such as revenue stacking must be adopted by storage providers to tap the full potential while enhancing the attractiveness of energy storage solutions.
In contrast, just last month the US Energy Storage Association (ESA) released survey results that showed the impact that the novel coronavirus will have on the industry. The study focused on analyzing the covid-19 effect on energy storage companies’ revenue, employment and projects in the second quarter.
The survey, which was answered by 101 representatives across the storage industry, revealed:
- While 63% of respondents indicated they expected a decrease in revenues (with 33% expecting 20% or greater reduction), 75% did not expect to reduce employment (inclusive of contractors).
- The top three reasons cited for potential reductions in revenues and/or employment were:
- Customer delays or cancellations;
- Difficulty in obtaining equipment, supplies or logistical delays; and
- Permitting and approval delays.
- Of the 25% of respondents that indicated they expect to reduce workforce, most expected reductions of up to 20% of their employees.
- The manufacturing segment of the industry expected more widespread and deeper revenue reductions than the industry segment that includes developers and installers who implement storage projects.
