Cleantech Market Intelligence
Leveraging Lean Manufacturing to Drive Storage Markets
The confluence of key technology-level factors is fostering the growth of the energy storage sector for both utility- and customer-sited energy storage system (ESS) projects. Some of these factors include:
- Lower battery cell, pack, and battery management system costs
- Improved battery power and energy densities
- The unique flexibility of battery ESSs to provide multiple grid and customer benefits
- A better understanding of what battery technologies, balance of system components, and software and controls need to do to meet power market and customer requirements to deliver predictable revenue streams
Given these developments, Navigant Research believes that the energy storage sector will leverage the lessons learned from distributed solar in order to standardize how ESS components should be built and how they should communicate with each other and the grid. This modular evolution will allow project developers, system integrators, and ESS hardware/software suppliers to apply traditional lean manufacturing concepts to rapidly reduce project costs.
Since 2013, the solar industry has focused significant efforts on streamlining processes to reduce costs. In the 2015 Distributed Solar PV report, Navigant Research notes that these efforts have proven fruitful across all global solar markets. For example, initial solar design and solar electricity production estimating software models can now often be credibly developed in just a few short hours. Solar PV projects are easier to develop and finance, and systems are more plug-and-play ready. The result is reduced design and engineering efforts and costs, as well as improved safety.
The evolutions in storage are also expected to result in more modular ESSs with standardized power and energy performance capabilities and lower costs. Navigant Research anticipated that the flexibility of lithium ion batteries to address not only short-term power applications, but also longer duration energy applications of 4 hours or less will be optimized in the near-term. However, we expect that the longer energy duration potential of flow batteries for applications like load shifting and solar and wind grid integration will become more prevalent in the mid-term.
Building on the developments outlined above, a recently released Navigant Research white paper examines five ESS trends in greater detail, each of which addresses key issues that enable the energy storage sector to meet its transformative and disruptive potential. In particular, Navigant Research anticipates that the move to more modular systems will drive the growth of both consumer behind-the-meter and utility ESS markets. It’s also anticipated that advanced battery manufacturers and system integrators will play a key role in the movement toward modularity as storage applications and use cases continue to mature.