INTERNATIONAL: BECOMING A GLOBAL MARKET
“[T]he global energy storage will double six times between 2016 and 2030, rising to a total of 125 gigawatts/325 gigawatt hours. . . . Eight countries will lead the market, with 70 percent of the capacity to be installed in the US, China, Japan, India, Germany, UK, Australia and South Korea.” Bloomberg New Energy Finance¹
The energy storage market is a global work in progress. Early markets in many countries all face the same start-up issues as with any relatively new energy technology. This is a perfect time for advocates and others to work together across borders to address similar technical, market, and policy issues. Coordination and consensus around ways to support the emerging market could accelerate progress across the globe. At present, no such international or multi-national collaboration exists. It should be an important element of any future storage advocacy.
Battery storage is an international phenomenon. It is expected to grow to 40 GW by 2020 (2).
A McKinsey and Company report recently looked at storage developments globally and concluded that:
[S]torage is starting to play a broader role in energy markets, moving from niche uses such as grid balancing to broader ones such as replacing conventional power generators for reliability…
Battery storage is entering a dynamic and uncertain period. There will be big winners and losers, and the sources of value will constantly evolve depending on four factors: how quickly storage costs fall; how utilities adapt by improving services, incorporating new distributed energy alternatives, and reducing grid-system cost; how nimble third parties are; and whether regulators can strike the right balance between encouraging a healthy market for storage (and solar) and ensuring sustainable economics for the utilities. All this will be treacherous territory to navigate, and there will no doubt be missteps along the way. But there is also no doubt that storage’s time is coming (3).
In addition to the U.S., these developments are occurring around the globe, from Europe, Australia, Asia, Africa and South America. While a lot of attention was focused on California, a state that has done more to nurture storage than any other region, there was plenty of action in Asia, Europe, and Australia.
Tesla focused most of its attention on Australia in the second half of the year; residential storage developers continue to see Germany as the market to watch; and China is emerging as a global electric-vehicle behemoth (4).
As an end of 2017 round in international energy business activity stated:
…when you look at the activity in 2017, a pattern emerges.
Over the past year, we’ve seen a number of major European energy companies — and some Japanese, American and Israeli ones as well—buy into the proposition that providing distributed energy technologies and services to their customers will be a significant part of their futures.
This pattern stands out most clearly in the big European energy giants’ shopping spree this year, starting with Enel’s purchase of Demand Energy in January 5 and closing with Centrica’s purchase of REstore in November (6).
In between, we’ve seen Total, E.ON, Engie, and Shell also make significant acquisitions ranging from demand response and electric-vehicle management to energy storage and the connected home (7).
And there seems to be heightened interest among the international environmental and energy community about the climate emissions benefits of increased storage and renewables development through 2050.
But oddly enough, how storage plays a role in the decarbonization discussion too often has been left to skeptics and contrarians, combining attacks on renewable energy transition scenarios with efforts to minimize the positive role of storage can play to solve energy problems. More thoughtful analysis and action are needed to help develop consensus around these long-term issues regarding the role of storage in the future energy system.
Download this report as a pdf here.
Photo: © Ørjan Richardsen/Woldcam, Courtesy of Statoil