The company’s latest report states that the introduction of BESS in the power sector covers a vast range of applications, resolving concerns such as energy time shift (energy storage when electricity prices are low and energy discharge when prices are high), load following and frequency regulation (balancing electric supply and end-user demand), renewable capacity continuity, transmission congestions relief, and energy tariff cost management.
Swati Gupta, GlobalData’s Analyst covering Power, explains: “Climate change concerns, government initiatives including renewable portfolio standards, and consumer efforts are resulting in increased deployment of solar and wind resources. However, the variability of solar and wind power makes it hard for electricity providers to integrate them into the electricity grid. To achieve this, BESS are being installed into electricity grids to make the power supply from renewable energy sources smoother and more reliable.”
Technological innovation, improvement in manufacturing processes, and growing competitiveness have already driven down BESS prices, which are expected to fall by almost half from 2015 to 2020. The component costs for BESS have also witnessed significant decline, mainly due to technological advancements.
In terms of regional BESS markets, the US has the largest market, valued at more than $750 million in 2015. The US is expected to continue to lead the BESS market over the next five years, reaching a market value of approximately $1.7 billion by 2020.
Gupta adds: “The US market for energy storage has so far been focused on frequency regulation – in other words, storage to balance out swift, short-term variation in power output. The country’s BESS market will expand as renewables continue to penetrate the power market.”