Two separate industry analyses have reached the conclusion that grid-connected energy storage is on the cusp of explosive growth, over time spans ranging from three years to just under a decade.
At investment bank Morgan Stanley, utility and cleantech analyst Stephen Byrd and auto analyst Adam Jonas see grid storage as an “underappreciated disruptor” poised to grow from US$300 million to $4 billion in the next two to three years, CleanTechnica reports. IHS Markit, meanwhile, anticipates cumulative global storage capacity growing from 3.0 gigawatts in 2016 to 28 GW in 2022 and 52 GW in 2025, according to Greentech Media, with lithium-ion battery prices falling below $200 per kilowatt-hour by 2019.
The Morgan Stanley report “claims that the low price of wind and solar energy, together with the falling price of grid storage products, has created a situation in which renewable energy is now reliable enough to be considered a mainstay of the utility industry and not just a specialty player,” CleanTechnica notes. And that’s bad news for the expensive, fossil-fueled “peaker” plants that utilities have traditionally had to fire up when electricity demand hits its high point in the morning and late afternoon.
“Storage effectively provides a low-cost source of power, eliminating the need for the highest-cost, least efficient conventional power plant,” the Morgan Stanley report states. “We think utilities could deploy storage as a way to enable the growth of renewables and/or defer costly transmission and distribution projects,” Byrd added.
IHS sees grid-connected storage revenue increasing from $1.5 to $7 billion between 2016 and 2025, Greentech notes, for a compound annual growth rate of 16% (and therefore a doubling time of 4.67 years). Industry powerhouses AES and Siemens, which recently formed a joint venture to go after the global energy storage market, have already won 48 projects in 13 countries, totalling 463 MW.