The battery energy storage systems are primarily used to reduce peak
demand charges; integrate renewable source, regulate voltage, and
frequency; and provide backup power supply. The battery energy storage
system market was valued at USD 1.45 Billion in 2017 and is expected to
reach USD 8.54 Billion by 2023, at a CAGR of 33.9% between 2018 and
2023. The base year considered for the study is 2017, and the forecast
period is between 2018 and 2023. The major factors driving the growth of
the battery energy storage system market include the increasing demand
for grid-connected solutions, high demand for the lithium-ion technology
in the renewable energy industry, and declining prices of lithium-ion
batteries.
Lithium-ion batteries to hold largest size of the battery energy storage system market throughout the forecast period
The lithium-ion batteries have a long lifespan of
5–15 years, and up to 98% efficiency (i.e., only 2% of electrical charge
is lost during use). The lithium-ion batteries have very high energy
and power densities, which leads to lower weight with low standby
losses, and high life expectancy. Lithium-ion batteries continue to hold
a large size of the battery energy storage system market owing to its
features such as high energy density, self-discharge capability, low
maintenance requirement, less weight, and high life expectancy.
Utility-owned battery energy storage system held a major share of the market in 2017
The utility-owned ownership type held the major share
of the battery energy storage system market in 2017. The ability of the
utility-owned battery energy storage systems to manage large energy
requirements during peak hours is supporting the adoption of these
systems. According to the Energy Storage Association, US, the
utility-based battery storage installed capacity grew by 221 MW in 2016.
This shows the high dependence of the customers on the utility-owned
battery storage systems for their energy requirements.
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Utilities to hold largest size of the battery energy storage system market during the forecast period
Battery energy storage system is well suited for
smoothing the variable output of renewables and controlling the rapid
ramping up and down of solar as well as wind generation. The grid
operators and regulators are aware of the importance of battery energy
storage systems and their ability to cater through multiple services.
The utility operators are using these systems in their resource planning
processes, which reduces the system costs and increases storage
capacity.
Battery energy storage system market in APAC to grow at the highest CAGR between 2018 and 2023
APAC comprises China, Japan, India, South Korea, and
the Rest of APAC (RoAPAC). APAC is gradually becoming a hub for the
battery energy storage system industry. The demand for battery energy
storage systems from China, India, and Japan is gradually increasing.
The electricity demand in China is on rise due to the rapid population
growth in the country. To fulfill the increasing demand from this
population, the state-owned State Grid Corporation of China, the world’s
largest utility, has deployed battery energy storage systems to provide
ancillary services throughout its grid.
Major factors restraining the growth of the battery
energy storage system market include high capital investment required
for the deployment and lack of the availability of vendors and project
financing. Key market players such as ABB (Switzerland), LG Chem (South
Korea), NEC (Japan), Panasonic (Japan), Samsung SDI (South Korea) have
adopted strategies such as product launches and developments,
expansions, acquisitions, agreements, contracts, collaborations, and
partnerships to gain a competitive edge in the battery energy storage
system market and expand their distribution networks.
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