Navigant Research Blog

Energy Storage Winners

— February 1, 2013

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)


Maximum Bob Explores Both Ends of the EV Market

— February 1, 2013

The annual Detroit Auto Show usually produces some interesting concepts and production introductions.  Away from the mainstream activity of the big name OEMs, there were a couple of new companies showing products that they are bringing to the niche market.

VIA Motors has taken some large GM trucks, removed the V8 engine and transmission, and installed batteries, an electric motor, and a smaller V6 engine.  A gas guzzler thus becomes a hybrid-electric vehicle with a zero-emissions range of about 40 miles and the capability of generating electricity in remote areas.

VLP is a startup company that had the opposite idea; the company has taken a Fisker hybrid, removed the battery and electric motor, and replaced them with a V8 engine and transmission from a Corvette.  The extra size and breathing requirements of the engine means a new hood and different bumper fascias for the front and rear, but the Fisker styling is maintained.  The buyer gets a stylish four-door vehicle with traditional American sports car performance and a familiar refueling experience.

The connection between these two companies is the well-known auto industry executive from Ford, BMW, Chrysler, and GM, Bob Lutz.  Although retired, Mr. Lutz continues to remain actively involved in the automotive industry, and he has hit on a couple of niches that have not yet been explored.  GM toyed in the past (2004) with a hybrid pickup truck with onboard electricity generation, but the vehicle’s cost premium kept sales volumes too low to make sense for an OEM.  However, a small market can be serviced by a startup company without the overhead of GM.

Fisker has produced a very attractive sports car design, but sales have been disappointing and volumes need to grow in order to support production goals.  Producing a gas-engine version is beyond the resources of Fisker, but if it can sell some extra vehicles without batteries and electric motors, that could help support the core business.

A nice concept would be to buy both vehicles and simply swap the powertrain, but unfortunately the performance requirements don’t match as nicely as that.  However, the important concept is that there is a market for hybrid versions of conventional vehicles and conventionally powered versions of vehicles designed exclusively as hybrids.  And OEMs are not necessarily the best companies to introduce them.


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