Utility-scale battery market to hit $8.3bn by 2024
The market for utility-scale battery storage is expected to increase 18-fold by 2024, according to analysis released today by market research firm Frost & Sullivan.
Revenue from grid-connected utility-scale batteries totalled $0.46bn in 2014, but is expected to rise to $8.30bn in 2024, driven by “impressive technological breakthroughs and growth in manufacturing capabilities”.
For example, Tesla’s forthcoming Gigafactory in Nevada, which will be producing 35GWh worth of batteries by 2020 – more capacity than was produced globally in 2013.
Frost & Sullivan claims these technological breakthroughs have caught the attention of governments, which are now rolling out favourable policy initiatives such as subsidies, preferential tariffs and targets in core markets. Much of the growth in demand for grid-scale storage is driven by the uptick in renewable energy generation and the strain its variable output puts on the grid.
“Battery storage has the ability to impart flexibility to the grid across a variety of end-use applications,” said Frost & Sullivan energy and power analyst Ross Bruton. “It's greatest advantages are the provision of distributed, variable renewable energy firming and energy time-shift, and rapid short-term electricity balancing for ancillary markets.”
The International Renewable Energy Agency (IRENA) has predicted the planet will need to triple its battery storage capacity to 150GW by 2030, in order to support an energy grid increasingly powered by renewables.
“Overall, attractive pricing, combined with a surge in manufacturing and supportive policies for renewable energy development, will increase the bankability of renewable energy associated storage projects,” concluded Bruton.
Frost & Sullivan’s findings reinforce a separate report released earlier this year by the Australian Renewable Energy Agency (ARENA), which claimed the planet is set to undergo a ‘storage megashift’, with Li-ion battery costs falling by 60% by 2020 and installations booming.