The global storage market is forecast to expand 13-fold to 158 gigawatt hours by 2024, according to research by Wood Mackenzie Power & Renewables.
In the report, ‘Global energy storage outlook 2019: 2018 year-in-review and outlook to 2024′, the US and China are projected to dominate the market, making up 54% of GWh deployed capacity by 2024.
Drivers include market reforms, state mandates and continued transformation in the energy sector as a result of more competitive renewables-generated power.
Wood Mackenzie Power & Renewable senior research analyst Rory McCarthy said: “In investment terms, we estimate the cumulative global energy storage market – defined, in this context, as total system capital expenditure on electrochemical and electromechanical energy storage systems, excluding pumped hydro – to grow six-fold to a total of $71bn by 2024.”
According to the study $14bn of that total will be invested in 2024 alone.
Front-of-metre will retain its position as the largest storage segment through 2024, according to the report.
Storage will move from short-duration systems providing high value power services, such as frequency regulation, into longer duration applications, replacing diesel, oil and gas peakers, particularly in markets and locations that have to import fossil fuels.
The study also expects renewables-plus projects to become a popular trend during the next five years, particularly for solar-plus-storage, to provide clean and dispatchable renewable electricity.
Wood Mackenzie Power & Renewables Research director Ravi Manghani said: “From 2013 to 2018, we saw fledgling market growth.
“This was reflected in a global GWh compound annual growth rate of 74%, although we did observe relatively small deployment totals of 7GW/12GWh for the period.”
He said these developments have “shifted the minds of global regulators, policy makers, grid operators, asset operators and developers”, in terms of how energy systems can be balanced.
“Market structures have generally struggled to keep up with the pace of this technology, illustrated by the limited number of revenue streams available to appropriately compensate storage. More than half of the GWh during this period came online in 2018 alone, beckoning an inflection in storage demand,” he added.
In the report 2018 saw 140% year-on-year growth in GWh terms – with a total of 3.3GW/6GWh deployed globally with half of the GW capacity installed front-of-metre to tap into ancillary service revenues in key markets.