1Q 2019

Energy Storage Value-Added Services Reduce Risk and Unlock Growth Opportunities

Potential customers are generally unfamiliar with energy storage system (ESS) technology. Value-added services (VASs) are therefore required for projects to be considered bankable by customers and investors. These services shift technological and financial risk for project performance from customers to the battery hardware providers and systems integrators that design and build an ESS. VASs include operations and maintenance (O&M), warranties, and performance guarantees. Collectively, these services are fundamental components of any project proposal. They present opportunities for innovative companies to establish a leadership position as the market continues to evolve.

Energy storage VASs have played a fundamental role in the growth of the energy storage industry over the past decade and will remain an important component of new projects. VASs are key to energy storage project proposals for both the more common lithium ion battery technology and emerging technologies such as flow batteries. While all energy storage technologies require some level of VASs to operate successful projects, this report will focus on battery technologies.

This Navigant Research report discusses how energy storage VASs have evolved and how the storage industry has grown by using VASs to reduce customer risks. The study provides an overview of the ESS project value chain including who provides VASs and innovative approaches that companies are taking to employ VASs in creative ways to reduce risks for customers. The report also analyzes the potential evolution of these services, including opportunities for new business lines and revenue streams to be developed for both incumbents and new entrants in the market.

Pages 15
Tables | Charts | Figures 2
  • What are value-added services for energy storage projects?
  • What is included in energy storage project operations and maintenance (O&M) services?
  • What are average terms for energy storage project warranties and performance guarantees?
  • Which companies in the value chain provide energy storage project O&M services?
  • How are O&M services expected to evolve in the coming years?
  • What opportunities will exist for incumbent players and new market entrants to provide value-added services?
  • Energy storage systems integrators and project developers
  • Independent power producers
  • Battery OEMs
  • Other energy storage hardware vendors
  • Utilities
  • Engineering, procurement, and construction (EPC) firms
  • Electrical grid equipment suppliers
  • Investor community

Spark

Context

Recommendations

Using Value-Added Services for Energy Storage Projects

O&M Optimizes Project Performance

Warranties Reduce Risk for Customers

Performance Guarantees Allow New Technologies to Compete

The Storage Industry Has Grown by Reducing Risks to Customers

Reducing the Risk of Supporting Emerging Technologies

Reducing Technical Risk with Energy Storage Project O&M Services

The Energy Storage Project Value Chain Is Evolving

VASs Are Key to Successful Projects and Enable Growth Strategies

O&M Provides Opportunities to Diversify

Live Spare Battery Storage Enables Lucrative New Opportunities

The Evolution of Energy Storage VASs Is Approaching

Innovate with Existing VASs

Reduce the Perceived Risk

Provide Flexibility in Offerings

Constant Advancements Will Be Key to Evolving with the Market

Standardize Digital O&M Platforms

  • Projected Annual Spending on Utility-Scale Energy Storage Project O&M, World Markets: 2019-2027
  • The Energy Storage Project Value Chain
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