Pike Research tracks seven major market segments for the energy storage industry, ranging from well-understood and mature markets such as bulk storage to new and relatively undeveloped markets such as residential energy storage. The three most successful markets are bulk storage, non-UPS applications for commercial buildings, and ancillary services.
The leading market segment by far is bulk storage, which is largely made up of the 160 traditional pumped storage installations that all provide load-leveling and peak-shifting services. Bulk storage is the most technologically diverse market segment, with as many as 13 technologies represented. Although the remaining six market segments (including ancillary services, commercial buildings, community storage, microgrids, and remote systems) will undoubtedly grow over the next several years, the fundamental issue that storage addresses is matching electricity supply with demand – exactly what bulk storage does.
This need is unlikely to change over time. Bulk storage is here to stay.
The commercial buildings market (for non-UPS applications) is the next most active market segment, reflecting demand for energy cost management solutions from commercial and industrial customers. This market primarily draws on thermal storage (CALMAC, Baltimore Aircoil, Cryogel, FAFCO, and Ice Energy) and NaS batteries (NGK Insulators). Thermal storage is excluded from the chart as this is a technology that is commercial, mature, and grossly underreported. Again, the problem that is being solved by non-UPS commercial storage is matching electricity supply with demand. Although in this case, the party with the demand for electricity is seeking the solution.
The ancillary services market segment is a nascent market segment for the energy storage industry. It includes diverse applications that either maintain the quality of energy on the grid or act as a reserve or backup for the grid. Ancillary services address the problems of reliability and power quality but are one step removed from aligning supply and demand. Growth in this segment reflects three key trends: increased volatility in load and generation, liberalization of market structures and utility attitudes, and a higher opportunity cost for delivering ancillary services using thermal generation assets such as coal and gas power plants. In terms of technologies, as many as seven technologies totaling 207 MW were delivering ancillary services to the grid globally as of 4Q 2012.
Deployed Installations by Market Segment and Technology, World Markets: 4Q 2012
(Source: Pike Research)