The global market for advanced energy storage systems is set to register a strikingly high growth rate during the forecast period (2017-2027), reports Market Research Future (MRFR). Advanced energy storage systems use technologies that convert electricity into energy, store it and then convert it into usable electricity for later use. Basically, the energy storage systems are useful for energy conversion, energy storage, and electricity conversion to consumable power. Simply put, this technology is primarily used to satiate the global appetite for electricity.
Drivers and Restraints
Increasing interest in energy efficiency has gained traction in many industries, such as the automotive industry. Of late, carmakers are switching to electric models from diesel-powered vehicles due to growing concerns about depleting fossil fuels. Car companies are also expanding their infrastructure to enhance their production of electric cars. For instance, in 2018, Mercedes-Benz Energy repurposed a retired coal plant in Germany to manufacture larger number of electric vehicles (EVs) for energy storage purposes.
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Apart from this, the increasing investments in renewable sources of energy coupled with various governmental regulations and initiatives supporting the use of renewable energy have augmented the growth of the global AES market to a large extent. For instance, in 2018, the Government of India announced a 10% reduction in Goods and Services Tax (GST) applied on lithium-ion batteries used in electric cars and the raw materials used in manufacture of these batteries. This move will help raise storage capacity and also boost domestic manufacturing in the country.
However, high initial investment cost subject to installation has the potential to deter the ongoing market growth. On the other hand, counteracting this restraining factor is the continuous advancement in technology to develop low-cost system.
Dominion Energy has planned to develop a smarter, stronger and greener energy grid by 2022, that has 3,000 megawatts of new solar and wind. This system will power around 750,000 homes in Virginia. This is a smart grid technology that is highly energy efficient and is priced on the lower side.
Above is an example of a market trend involving a digital technology that allows two-way communication between the utility and its customers, along with sensing along the transmission lines. A smart grid technology is rapidly gaining momentum across the globe, as it reduces peak demand, subsequently lowering electricity rates.
The global advanced energy storage market is segmented based on application and technology.
Automotive Application to emerge as a major segment
The applications of advanced energy storage systems are power, automotive, and others. A combination of technical enhancements in vehicles and reasonable government policies that encourage vehicle efficiency has propelled the application of advanced energy storage systems in automotive industry.
The Battery Sub-segment to Hold the Largest Market Share
Technology-wise, the market is segmented into batteries, flywheels, compressed air storage, thermal, pumped hydro-power and others. Among these, the batteries segment is leading the advanced energy storage systems market, as it is used for electrification of grid. Moreover, gradual advancement of advanced energy storage technology enhances the battery efficiency. Thereby steeling the position of the battery storage system market.
The global advanced energy storage market is spread across the regions of the Americas, Europe, Asia Pacific (APAC) and the Middle East & Africa.
Asia Pacific to be the leading market for advanced energy storage systems
The Asia-Pacific market is estimated to lead the advanced energy storage market throughout the forecast period due to major manufacturing and infrastructural activities being undertaken in the region. Remarkable growth in the electric vehicles market has also catapulted the growth of the advanced energy storage system market in the region.
The Americas region is subjected to strong market performance on account of high demand for lithium-ion technology within the renewable energy trade. The region also makes high demand for grid-connected solutions which bolsters the market growth in the region. The flourishing automotive industry in the countries such as US and Canada along with sound government policies work in favor of the market growth.
The Europe region has accrued a substantial share of the global market owing to installation of island systems that are basically deployed in regions where the power grid is weak and unreliable. Moreover, the region of Europe also boasts of full support from various government bodies for technological innovations.
The markets in Middle East and Africa are growing steadily but not at the same growth rate as other regions. This is due to some regulatory barriers that do not allow the advanced battery storage system to become a mainstream option for the power sector. However, these barriers are being challenged by accelerated need for power quality, and highly sophisticated technology in the region.
The key vendors in the global market are Yuasa Corporation (Japan), Samsung SDI Co. Ltd. (South Korea), Hitachi Limited (Japan), Toshiba Corporation (Japan), ABB Limited (Switzerland), Siemens A.G. (Germany), Alstom (France), Exide Technologies (U.S.), L.G. Chem. Limited (South Korea), Alevo Group S.A. (U.S.), Maxwell Technologies Inc. (U.S.) and others.
- Siam GS Battery is preparing to increase its lead-acid battery production to meet growing demand at home and across Southeast Asia. The company is investing around USD 30 million in the expansion. Li-ion batteries offer benefits in terms of energy density and specific energy and are apt for storage of high amount of energy for a long period.