November 9, 2012
The increasing complexity of the smart grid, with more diversity of power generation assets and more sophisticated control capabilities, is heightening the importance of a range of ancillary services for grid operators, including spinning reserves. Spinning reserves are power generation or storage assets that can come online quickly to serve as bridge power for the grid. The capacity of such systems will grow steadily over the coming decade, as will their value, according to a recent report from Pike Research, a part of Navigant’s Energy Practice. The total capacity of worldwide spinning reserves for the grid will rise by 40 percent by 2022, the study concludes.
In terms of revenue, the global spinning reserves market will more than double in size during that period, from $261 million in 2012 to $578 million by 2022.
“The traditional technologies that deliver spinning reserves, including all types of dispatchable power plants, are mature and well-understood,” says research analyst Anissa Dehamna. “However, energy storage technologies, including pumped storage and newer forms of energy storage, are playing a larger role in this market. As markets begin to differentiate between technologies, such as with pay-for-performance regulations, energy storage technologies will gain market share in the spinning reserves market.”
By 2022, natural gas and coal plants will still account for 93 percent of total spinning reserves capacity, but energy storage will grow to 7 percent of capacity in the same time frame, according to the report. Of particular interest to grid operators are advances in battery technology, particularly lithium-ion (Li-ion) batteries. Li-ion batteries can achieve up to 95 percent efficiency, but they remain relatively expensive compared to other forms of energy storage. Impressive economies of scale could reduce the cost of Li-ion for grid applications.
The report, “Spinning Reserves for the Grid”, analyzes the global market for spinning reserves and forecasts the amount and revenue associated with this rapidly changing market using a scenario-based forecast. The report provides a comprehensive assessment of the demand drivers, business models, policies, and technology issues associated with the spinning reserves market. Key players are profiled in depth and worldwide revenue and capacity forecasts, segmented by technology and region, extend through 2022. An Executive Summary of the report is available for free download on the Pike Research website.
Contact: Richard Martin
* The information contained in this press release concerning the report, “Spinning Reserves for the Grid,” is a summary and reflects Pike Research’s current expectations based on market data and trend analysis. Market predictions and expectations are inherently uncertain and actual results may differ materially from those contained in this press release or the report. Please refer to the full report for a complete understanding of the assumptions underlying the report’s conclusions and the methodologies used to create the report. Neither Pike Research nor Navigant undertakes any obligation to update any of the information contained in this press release or the report.