Cleantech Market Intelligence
Advanced Batteries: The Year Ahead
The energy storage team at Pike Research has developed a 2013 research roadmap for storage and battery-related coverage. Armed with lessons learned in 2012, presented below is a brief summary of what this year might have in store for advanced batteries.
In the United States, independent system operators (ISOs) are making real market changes to implement Order 755, concerning pay for performance, handed down by the Federal Energy Regulatory Committee (FERC) in October 2011. The ISOs are able to design their own approach to resource participation and compensation, and this move should increase the revenue-generating opportunities for battery-based storage (and storage in all forms). While the ancillary service segment remains a nascent market, Order 755 could potentially unlock revenue potential bound up in dated regulatory policies. While the real impacts of these market changes have yet to emerge, look for new projects to join the queue for interconnection in 2013. These projects will likely focus on capturing revenue from providing frequency regulation to the grid.
Putting Out Fires
Pike Research published the latest version of the Energy Storage Tracker in the fourth quarter of 2012. From the second quarter to the fourth quarter in 2012, 60 new storage projects came online and 107 new projects were announced. Pike Research’s analysis reveals quite a bit more technology diversity in projects being deployed across the globe, as well. Advanced battery technologies, particularly lithium-based chemistries, are capturing significant market share. The new projects are essential to furthering energy storage players’ understanding of the technical and market issues. These projects can leapfrog over older projects and demonstrate competency at weak points in the supply chain. As more projects come online, 2013 will represent another year of maturation for the energy storage industry.
One of the primary issues that developers of large-scale advanced battery projects must pay attention to in 2013 is safety. Scaling up delicate chemical reactions and interconnecting them with an electric grid is an inherently risky proposition, and already public accidents threaten to derail the market’s development. In 2012, we saw several critical projects undermined by battery fires, including the Xtreme Power installation in Hawaii. The lithium ion battery fire onboard the Japan Airlines Boeing Dreamliner showed that 2013 is not exempt from battery safety issues. As lithium ion batteries reach the mainstream power sector, the discussion of safety needs to become more public.
The current year will also see several new players move toward commercialization of their technology. This could be the year that the hype cycle dies down and the industry can address market and technical issues in a more sober and clear-eyed way. Still, the abovementioned issues are just a handful of the challenges that will face both legacy battery players and new entrants.