Energy Storage and the Smart Grid: an 8.3 Billion$ Market by 2016
In August of last year I wrote an article titled “Grid-based
Energy Storage: Birth of a Giant.” Over the last 12 months I’ve written a series of follow-on articles that discuss the principal classes of manufactured energy storage devices and the companies that
are making or planning to make products for smart grid energy storage applications. My entire archive of articles on the energy storage sector is available here.
One of the biggest problems I’ve encountered over the last year has been a dearth of reliable third
party information that can help investors understand the breadth and depth of the business opportunity, and sift through the frequently contradictory claims of energy storage device manufacturers that plan to target the
smart grid as a principal market. Since energy storage investors are generally well-informed
and frequently opinionated, most of my articles have lengthy comment streams that round out my perspective and are usually more interesting than the articles themselves.
Two weeks ago I ran across a story on greentechgrid that said NanoMarkets LLC, a leading market research firm from Glenn Allen, Virginia, was predicting that the global market for storage batteries and ultracapacitors on the smart grid would grow from its current level of $326 million to $8.3 billion by 2016. Since the market size and growth rate estimates were very impressive and I track many of the companies identified in the greentechgrid story, I contacted NanoMarkets to see if they would send me a complimentary copy of their report.
A little over a week ago I received a copy of NanoMarkets 102 page report titled “Batteries
and Ultra-Capacitors for the Smart Power Grid: Market Opportunities
2009-2016.”
I’ve been like a kid in a candy store ever since. While the $2,995 report is a little pricey for individual investors, it’s a must read for institutions and other large investors that are analyzing opportunities in
the energy storage sector. It’s also a wonderful planning tool for companies that are developing go to
market strategies for manufactured energy storage devices. Individuals who want to better understand how the smart-grid market is likely to develop and grow over the next several years can gain important insight from a free June 2009 NanoMarkets white paper titled “Plug In to Materials Trends for Smart Grid Applications.”
Unlike forecasts from storage device manufacturers and stock market analysts who tend to focus on how a particular product, technology or company might fit in an emerging market, NanoMarkets approached the issue of smart grid storage from the end-user’s perspective; meaning that they identified the customer’s
needs first and then focused on the companies that had cost-effective solutions for those needs. The principal near-term applications identified by NanoMarkets are:
Load leveling and power quality systems to protect commercial and industrial users from brief power interruptions that cost an estimated $75 to $200 billion per year in lost time, lost commerce and damage to
equipment; Peak shaving systems to help commercial and industrial users manage their electricity costs under variable utility tariffs and help utilities manage generating assets to minimize waste;
Transmission and distribution support systems to help utilities reduce grid congestion, defer upgrades and minimize waste; and Renewables integration systems to help power producers, utilities and end users cope with the inherent variability of wind and solar power and better match peak wind and solar output with peak demand.
In evaluating the likely development path for energy storage devices on the smart grid, NanoMarkets considered a variety of competing technologies including pumped hydro, compressed air, flywheels,
chemical storage batteries, ultracapacitors and superconducting magnets. They ultimately concluded that:
important was their conclusion that emerging technologies would increase the overall demand for storage and result in rapidly increasing revenue for all product classes.
So instead of facing a situation where an emerging technology takes sales away from an established technology, each class of technology can expect rapid sustained growth over the entire forecast period.
When the forecasts for individual product classes are stacked on top of each other, it’s easy to see why I believe the smart grid storage market will reach explosive growth rates by 2016. The following graph provides a consolidated summary of NanoMarkets’ forecast for each of the principal battery classes over the next eight years.
by John L. Petersen
The Rest @ Alternative Green News
Energy Storage: Birth of a Giant.” Over the last 12 months I’ve written a series of follow-on articles that discuss the principal classes of manufactured energy storage devices and the companies that
are making or planning to make products for smart grid energy storage applications. My entire archive of articles on the energy storage sector is available here.
One of the biggest problems I’ve encountered over the last year has been a dearth of reliable third
party information that can help investors understand the breadth and depth of the business opportunity, and sift through the frequently contradictory claims of energy storage device manufacturers that plan to target the
smart grid as a principal market. Since energy storage investors are generally well-informed
and frequently opinionated, most of my articles have lengthy comment streams that round out my perspective and are usually more interesting than the articles themselves.
Two weeks ago I ran across a story on greentechgrid that said NanoMarkets LLC, a leading market research firm from Glenn Allen, Virginia, was predicting that the global market for storage batteries and ultracapacitors on the smart grid would grow from its current level of $326 million to $8.3 billion by 2016. Since the market size and growth rate estimates were very impressive and I track many of the companies identified in the greentechgrid story, I contacted NanoMarkets to see if they would send me a complimentary copy of their report.
A little over a week ago I received a copy of NanoMarkets 102 page report titled “Batteries
and Ultra-Capacitors for the Smart Power Grid: Market Opportunities
2009-2016.”
I’ve been like a kid in a candy store ever since. While the $2,995 report is a little pricey for individual investors, it’s a must read for institutions and other large investors that are analyzing opportunities in
the energy storage sector. It’s also a wonderful planning tool for companies that are developing go to
market strategies for manufactured energy storage devices. Individuals who want to better understand how the smart-grid market is likely to develop and grow over the next several years can gain important insight from a free June 2009 NanoMarkets white paper titled “Plug In to Materials Trends for Smart Grid Applications.”
Unlike forecasts from storage device manufacturers and stock market analysts who tend to focus on how a particular product, technology or company might fit in an emerging market, NanoMarkets approached the issue of smart grid storage from the end-user’s perspective; meaning that they identified the customer’s
needs first and then focused on the companies that had cost-effective solutions for those needs. The principal near-term applications identified by NanoMarkets are:
Load leveling and power quality systems to protect commercial and industrial users from brief power interruptions that cost an estimated $75 to $200 billion per year in lost time, lost commerce and damage to
equipment; Peak shaving systems to help commercial and industrial users manage their electricity costs under variable utility tariffs and help utilities manage generating assets to minimize waste;
Transmission and distribution support systems to help utilities reduce grid congestion, defer upgrades and minimize waste; and Renewables integration systems to help power producers, utilities and end users cope with the inherent variability of wind and solar power and better match peak wind and solar output with peak demand.
In evaluating the likely development path for energy storage devices on the smart grid, NanoMarkets considered a variety of competing technologies including pumped hydro, compressed air, flywheels,
chemical storage batteries, ultracapacitors and superconducting magnets. They ultimately concluded that:
- Pumped hydro and compressed air had limited growth potential because of geographical and geologic constraints;
- Flywheels and superconducting magnets were not likely to be widely used beyond niche applications because of their cost and complexity; and
- Absent a revolutionary breakthrough in cycle life and cost, lithium-ion batteries will have limited application in the smart grid.
important was their conclusion that emerging technologies would increase the overall demand for storage and result in rapidly increasing revenue for all product classes.
So instead of facing a situation where an emerging technology takes sales away from an established technology, each class of technology can expect rapid sustained growth over the entire forecast period.
When the forecasts for individual product classes are stacked on top of each other, it’s easy to see why I believe the smart grid storage market will reach explosive growth rates by 2016. The following graph provides a consolidated summary of NanoMarkets’ forecast for each of the principal battery classes over the next eight years.
by John L. Petersen
The Rest @ Alternative Green News
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