$6bn market opportunity for residential, commercial, industrial & utility-scale battery systems

This report focuses on electrochemical energy storage especially batteries applied in residential, commercial & industrial and grid storage sectors, covering benefits/values provided by battery storage systems, cost analysis, economic evaluation, available and future business models, go-to-market strategies, market status analysis globally, 10 year market forecasts segmented by country and application and key company profiles.

New opportunities in battery storage systems

The Battery Energy storage Systems (BESS) will not develop in isolation. The quick deployment of BESS in various sectors is largely stimulated by rapid battery price reduction, mainly due to the economy of scale instead of technology improvement. The large demand is not merely generated by BESS, but also EVs, distributed PV installations, introduction of renewable generations like wind and solar, saturation of consumer electronics, etc. The expansion of battery-related business helps to de-risk the upfront investment and generate second revenue. Therefore, we can see increasing number of partnerships, joint ventures, acquisitions among material providers, battery makers, electric vehicle vendors, PV system integrators and heavy industry players. Those interests provide new opportunities in the emerging BESS markets. Typical examples include enhanced frequency response, frequency regulation services in ancillary services, self-consumption, backup power and time-of-use arbitrage applications in residential batteries, as well as demand charge reduction in commercial & industrial sectors.

Imbalanced development from region to region, technology to technology

Due to the different regulatory structures, supporting policies, electricity retail rates, penetration of renewables, customers’ ability to pay, etc. the market development will vary from region to region. As shown in the figures, in ten-year’s time the market value structure will change significantly.

Figure 1 - BESS market value segmented by country (2015: left, 2026: right)

BESS development based on different technologies show similar trends, as displayed in the figures below for the different chemistries (e.g. lithium-ion, lead-acid, sodium-based, nickel-based, etc.).

Figure 2 - Grid-connected battery projects split by technology in 2016

Economic value return is an important consideration

BESS can provide a number of benefits/values, however, based on the current price range, the economic return varies from case to case. Interestingly IDTechEx has heard different opinions from vendors and analysts/bankers/academia. Detailed analysis is performed in the report.

Questions being addressed

Below are a number of questions that are answered in the report:

• Where can energy storage be fit in the electricity system?
• What are the battery energy storage benefits/values?
• What are the number of projects and rated power in grid-connected energy storage and battery storage, segmented by project status, technology, company and country?
• How does the costs influence the deployment of battery storage systems?
• How does the cross industry expand the battery-related business scope?
• What is the market drivers?
• Are the battery energy storage systems economic/commercial in corresponding applications?
• What is the market status in various countries worldwide?
• What are the winning battery technologies?
• Are there regulatory barriers?
• What threats are there in the market?
• What is the reality behind the hype?
• What are the price projects?
• What are the differences in opportunities between behind-the-meter market and utility-scale markets?
• What business models can capture most value streams?
• Which parts of the value chain stand to benefit the most?
• What is the potential market size?
• Which “go-to-market” strategies work better?
• Who are potential customers and active players?