Energy Storage Systems for Ancillary Services

Frequency Regulation, Voltage Support, Spinning Reserves, Electric Supply Reserve Capacity, and Load Following: Global Market Analysis and Forecasts

Ancillary services are the services required to maintain safe, reliable, and secure transmission of energy on the grid. Designed to respond to the technical challenges of generating, transmitting and distributing electricity, these services are required to balance the grid regardless of the structure of the electricity market. It can be challenging for a new technology – such as energy storage systems (ESSs) – to make a compelling business case in this market even if on a technical level energy storage provides a compelling and competitive solution.

Energy storage, however, is poised to take advantage of several global trends in this market. Demand for energy will continue to grow at a rapid pace, leading to more deregulation of the electricity market as well as more instability on the grid system as renewables penetration will also grow. In this scenario, ESSs offer, in many cases, better quality ancillary services in addition to an alternative to using traditional generation assets. Navigant Research forecasts that worldwide annual installed capacity of energy storage systems for ancillary services will reach 3,500 MW by 2023.

This Navigant Research report analyzes the global market for energy storage to provide ancillary services. The report provides a comprehensive assessment of the demand drivers and technology issues associated with the ancillary services market. Key industry players are profiled in depth and worldwide revenue and capacity forecasts, segmented by technology and region, extend through 2023.

Key Questions Addressed:
  • How will increased renewables penetration affect the ancillary service market and the opportunity for ESS in this market?
  • What are the macro trends that will influence ancillary service markets and the opportunity for ESS in these markets?
  • How large is the market, in terms of capacity and revenue, by technology and region?
  • How large will the market be, in terms of capacity and revenue, in 2023?
  • What are the leading applications for ESS in ancillary services?  What is the regional segmentation, the technology segmentation?
  • Who are the key players in the ESS for ancillary services market?
  • What are the key countries for ESS for ancillary services going forward and what are the key drivers, barriers, and opportunities for energy storage in those markets?
  • What are the estimated installed energy storage costs and revenue opportunities for energy storage technology providers?
Who needs this report?
  • Energy storage technology providers and service providers
  • Battery manufacturers and component providers
  • Electronics and power systems firms
  • Renewable energy technology providers and project developers
  • Utilities and grid operators
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1   Introduction

1.2   Key Market Conditions

1.3   Industry Issues

1.4   Market Forecast

2. Market Issues

2.1   Definitions, Regulated and Deregulated Markets, Energy Mix, and Current Market

2.1.1     Ancillary Services Definition

2.1.2     Regulated and Deregulated Markets

2.1.3     Market Structures

2.1.4     Current Energy Storage Systems for Ancillary Services

2.2   Regional Analysis

2.2.1     Spotlight on Asia Pacific

2.2.1.1     Reserves and Capacity Services in Asia Pacific

2.2.1.2     China

2.2.2     Spotlight on Europe

2.2.2.1     Energy Mix

2.2.2.2     European Grid System

2.2.2.3     Ancillary Service Cost Recovery

2.2.3     Spotlight on the United States

2.2.3.1     ESS Pipeline: Interconnection Queues

2.2.3.2     FERC Order 755

2.2.3.2.1.     Specifics

2.2.3.2.2.     Technologies

2.2.3.2.3.     Timeline

3. Technology Issues

3.1   Pumped Storage

3.2   Compressed Air Energy Storage

3.3   Flywheels

3.3.1     Basic Principles

3.3.2     Strengths and Weaknesses

3.4   Advanced Batteries

3.4.1     Technology Overview

3.4.1.1     Battery Management System

3.4.1.2     Balance of System

3.4.2     Battery Chemistries

3.4.2.1     Advanced Lead-Acid Batteries

3.4.2.2     Sodium Sulfur Batteries

3.4.2.3     Lithium Ion Batteries

3.4.2.3.1.     Lithium Ion Chemistries

4. Key Industry Players

4.1   Introduction

4.1.1     ABB

4.1.2     AES Energy Storage, LLC

4.1.3     Ampard

4.1.4     Beacon Power

4.1.5     BYD Co. Ltd.

4.1.6     Ecoult

4.1.7     LightSail Energy

4.1.8     NEC Corp.

4.1.9     NGK Insulators

4.1.10   S&C Electric

5. Market Forecasts

5.1   Forecasting Methodology, Baseline Figures, and Costs

5.1.1     Forecast Methodology

5.1.2     Key Flex Points in the Model

5.1.3     Energy Storage for Ancillary Services Baseline Figures

5.1.4     Energy Storage for Ancillary Services Cost Figures

5.1.5     How Costs Will Change Over Time

5.2   Market Forecast by Region

5.3   Market Forecast by Technology

5.4   Market Forecast by Application

5.5   Conclusions and Recommendations

6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • New Installed Capacity of Energy Storage for All Ancillary Services by Region, World Markets: 2013-2023
  • Installed Capacity of Energy Storage Delivering Ancillary Services as a Primary Application (Excluding Pumped Storage), World Markets: 4Q 2012
  • Energy Storage for Ancillary Services Revenue by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Technology, World Markets: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, World Markets: 2013-2023
  • The European Grid’s Five Synchronous Areas
  • Schematic of Compressed Air Energy Storage
  • Second Generation CAES Design
  • Commercial Flywheel Performance

List of Tables

  • Summary of Forecasted Ancillary Services
  • Spinning Reserves Requirements, Asia Pacific
  • China’s Southern Grid Spinning Reserves Payment Structure
  • Components of Transmission Tariffs, Select European Countries
  • Costs Included in Transmission Tariffs, Select European Countries
  • Summary of Energy Storage Projects in Interconnection Queues by System Operator, U.S.  Markets: 1Q 2013
  • Summary of the Operating Characteristics of Leading Advanced Battery Technologies
  • Characteristics of Lithium Ion Battery Chemistries
  • Key Flex Points in the Energy Storage Systems for Ancillary Services Model
  • Projects Listed in ISO Interconnection Queues, Active Requests Only, U.S. Markets: 1Q 2013
  • Installed Energy Storage Capacity and Units, All Ancillary Services, 1Q 2013
  • Energy Storage Capacity and Units for Ancillary Services by Primary Application and Technology, 1Q 2013
  • Energy Storage Capacity and Units for Ancillary Services by Secondary Application and Technology, 1Q 2013
  • Installed Capacity of Energy Storage Delivering Ancillary Services as a Primary Application (Excluding Pumped Storage), World Markets: 4Q12
  • Baseline Figures for Each Application in the Market Forecast by Region, World Markets: 2013-2023
  • Installed Power Cost for Energy Storage for Ancillary Services by Technology, North America and Europe: 2013-2018
  • New Installed Capacity of Energy Storage for All Ancillary Services by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Frequency Regulation by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Voltage Support by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Spinning Reserve by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Electric Supply Reserve Capacity by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Load Following by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, North America: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Western Europe: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Eastern Europe: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Asia Pacific: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Latin America: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Middle East: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, Africa: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Technology, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Technology, North America: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services  by Technology, Western Europe: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services  by Technology, Eastern Europe: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Technology, Asia Pacific: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services  by Technology, Latin America: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services  by Technology, Middle East: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services  by Technology, Africa: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, World Markets: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, North America: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Western Europe: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Eastern Europe: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Asia Pacific: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Latin America: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Middle East: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Technology, Africa: 2013-2023
  • New Installed Capacity of Energy Storage for All Ancillary Services by Region, World Markets: 2013-2023
  • New Installed Capacity of NaS Batteries by Region, World Markets: 2013-2023
  • New Installed Capacity of CAES by Region, World Markets: 2013-2023
  • New Installed Capacity of Pumped Hydro by Region, World Markets: 2013-2023
  • New Installed Capacity of Advanced Lithium Ion by Region, World Markets: 2013-2023
  • New Installed Capacity of Advanced Lead-Acid by Region, World Markets: 2013-2023
  • New Installed Capacity of Flywheel by Region, World Markets: 2013-2023
  • Energy Storage for Ancillary Services Revenue by Region, World Markets: 2013-2023
  • New Installed NaS Battery Revenue by Region, World Markets: 2013-2023
  • New Installed CAES Revenue by Region, World Markets: 2013-2023
  • New Installed Pumped Hydro Revenue by Region, World Markets: 2013-2023
  • New Installed Advanced Lithium Ion Revenue by Region, World Markets: 2013-2023
  • New Installed Advanced Lead-Acid Revenue by Region, World Markets: 2013-2023
  • New Installed Flywheel Revenue by Region, World Markets: 2013-2023
  • New Installed Capacity of Energy Storage for Ancillary Services by Application, World Markets: 2013-2023
  • New Installed Capacity of NaS Batteries by Application, World Markets: 2013-2023
  • New Installed Capacity of CAES by Application, World Markets: 2013-2023
  • New Installed Capacity of Pumped Hydro by Application, World Markets: 2013-2023
  • New Installed Capacity of Advanced Lithium Ion by Application, World Markets: 2013-2023
  • New Installed Capacity of Advanced Lead-Acid by Application, World Markets: 2013-2023
  • New Installed Capacity of Flywheel by Application, World Markets: 2013-2023

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