As the global energy storage industry continues to take shape, clear differences between regions are emerging. These differences reflect of a number of factors in each area, including electricity market structure, local manufacturing expertise, industrial and energy policies, and geographic characteristics. These factors have significant influence on the diversity of energy storage technologies being deployed in each region. Navigant Research’s Energy Storage Tracker 1Q15 tracks all storage projects around the world, allowing for deep insights into the impacts that market structure and policies have on each region’s market and technological diversity.
Map of Energy Storage Technology Diversity (Number of Deployed Technologies), World Markets: 1Q 2015
North America is the most technologically diverse region for energy storage in the world, with 19 different technologies (20 including pumped storage) currently installed. This is a result of agencies and favorable policies in North America that are focused on encouraging innovation, such as the United States’ Advanced Research Projects Agency-Energy (ARPA-E) program, as well as various state policies. The U.S. federal government supports technological diversity through the Department of Energy (DOE) Loan Programs Office, which provides secure, competitive financing for innovative clean energy projects that utilize a new or significantly improved technology. As a result of these factors, lithium-ion (Li-ion)-based storage systems (the most popular globally) only account for 12% of deployed systems in North America and 13% of the regional pipeline, which includes projects utilizing 15 different technologies.
Due to local manufacturing and engineering specialties, batteries are the primary choice for energy storage in Asia Pacific, making the region less technologically diverse than North America or Western Europe. Regulatory policies tend to favor domestic technologies and manufacturers. Notably, Japanese sodium sulfur (NaS) battery manufacturer NGK Insulators has benefited from close relationships with many utilities, resulting in an installed base of over 360 MW in the region. Given recent safety concerns regarding NaS systems and the opening of new markets, domestically produced Li-ion systems now lead the Asia-Pacific region. This is also a result of the region’s grid resiliency efforts (particularly in Japan), which encourage the adoption of smaller distributed storage systems, an ideal application for Li-ion systems. Overall, Li-ion-based systems represent 76.6% of the pipeline for the Asia Pacific region.
The technological diversity of Europe’s energy storage industry falls in between North America and Asia Pacific. Europe has a much greater diversity of market rules and policies compared with other regions. In general, European policies favor innovative/foreign technologies more than in Asia, and as a result there are eight different technologies in the European project pipeline.
Germany, the leading market in Europe, has policies and market conditions (e.g, a high penetration of distributed solar, net metering restrictions) that favor distributed energy storage. As Li-ion systems are ideally suited for distributed installations, those batteries have begun to lead the German market despite a relatively diverse base of deployed technologies.
The Energy Storage Tracker explores the global energy storage landscape by tracking projects deployed and planned around the world. Navigant’s project database allows for in-depth analysis of regional markets to understand the impact of policy on technological diversity. Technological diversity can be a key indicator of the overall health of a market and the opportunities for innovative or foreign companies to compete.
Tags: Advanced Batteries, Distributed Energy Resources, Energy Storage, Lithium Ion, Policy & Regulation
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