4Q 2017

Market Data: Ancillary Service Markets for Energy Storage

Spinning Reserves, Non-Spinning Reserve Capacity, Frequency Regulation, and Volt/VAR Support: Global Market Analysis and Forecasts

Ancillary service markets have been one of the primary sources of revenue for many energy storage projects built to date. The increasing penetration of renewable energy and retirement of conventional thermal power plants are causing major shifts in energy markets that are expected to result in a greater need for ancillary services. In addition to the changing generation mix, extreme weather events are occurring with increasing frequency, driving the need to improve the resilience and reliability of the power system. Energy storage systems (ESSs) are emerging as one of the attractive new sources of the ancillary services required to maintain stable and efficient grid operation.

Ancillary services have provided a foundation for emerging energy storage industries in several markets. These services often provide the initial high value anchor service for new storage projects. Additional applications have become more viable as ESS prices have decreased and storage becomes a more integral component of the grid. However, ancillary service markets have proven to be unreliable due to changing market regulations and differences across regions. Reforms to regulations are underway that can have a significant effect on the potential for ESSs to provide these services. As these markets evolve in the transition to a more dynamic Energy Cloud network, there will be increasing competition for providing ancillary services from different resources.

This Navigant Research report examines the ancillary service market opportunities for energy storage, with a focus on four main ancillary services: spinning reserves, non-spinning reserve capacity, frequency regulation, and voltage support. The study provides an analysis of the market issues, including drivers, barriers, and regulatory issues, associated with energy storage for ancillary services. Global market forecasts for capacity and revenue, segmented by service type and region, extend through 2026. The report also provides an overview of the trends related to ancillary service markets for energy storage and projected market sizes in regions around the world.

Pages 35
Tables | Charts | Figures 46

  • Which ancillary services are the best technical fit for energy storage?
  • How quickly are the opportunities for energy storage to provide ancillary services expected to grow?
  • Which regions and markets will have the most opportunities for energy storage in ancillary service markets?
  • What are the drivers of energy storage providing ancillary services?
  • How will proposed regulatory changes affect ancillary service markets and the opportunities for energy storage?

  • Energy storage project developers
  • Energy storage technology vendors
  • Electricity industry regulators
  • Renewable energy project developers
  • Utilities and grid operators
  • Government agencies
  • Investor community

1. Executive Summary

1.1   Market Overview

1.2   Market Forecasts

2. Market Issues

2.1   Introduction to Ancillary Services

2.1.1   Spinning Reserves

2.1.2   Non-Spinning Reserve Capacity

2.1.3   Frequency Regulation and Response

2.1.4   Additional Ancillary Services

2.1.4.1   Voltage Support

2.1.4.2   Blackstart

2.2   Energy Storage for Ancillary Services

2.2.1   Applicability of Energy Storage for Ancillary Services

2.3   Market Drivers

2.3.1   Changing Resource Mix

2.3.2   Regulations

2.3.3   Ancillary Service Prices

2.4   Market Barriers

2.4.1   Competition from Existing Resources

2.4.2   Regulatory Uncertainty

2.4.3   Technical Limitations

3. Market Forecasts

3.1   Methodology and Assumptions

3.2   Forecasts by Region

3.2.1   North America

3.2.2   Western Europe

3.2.3   Asia Pacific

3.2.4   Rest of the World

3.3   Conclusions and Recommendations

4. Acronym and Abbreviation List

5. Table of Contents

6. Table of Charts and Figures

7. Scope of Study, Sources and Methodology, Notes

  • Utility-Scale Coal-Fired Electricity Generating Capacity Additions by Coal Type and Initial Operating Year, United States
  • Range of Upward and Downward Reserve Required (Consumer Power), National Grid UK Network: 2017-2022
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Region, World Markets: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, North America: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Western Europe: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Asia Pacific: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Region, Rest of World Markets: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Eastern Europe: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Latin America: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Middle East: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions and Deployment Revenue for Ancillary Services by Service Type, Africa: 2017-2026

  • Ancillary Service Characteristics and Applicable Energy Storage Technologies
  • Annual Installed Utility-Scale Variable Generation (Wind and Solar) Capacity by Region, World Markets: 2017-2026
  • Estimated Average Ancillary Service Prices, Select US Regions: 2014-2016 (Most Recent Data Available)
  • Estimated Average Ancillary Service Prices, Select European Countries: 4Q 2017
  • Estimated Average Ancillary Service Requirements, Select US Regions: 2014-2016 (Most Recent Available Data)
  • Estimated Average Ancillary Service Requirements, Select European Countries: 4Q 2017
  • Estimated Average Ancillary Service Requirements, Select Asia Pacific Countries, 4Q 2017
  • Utility-Scale Energy Storage System Installed Cost (CAPEX) Assumptions by Technology, Global Averages: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Region, World Markets: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Region, World Markets: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Region, World Markets: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, World Markets: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, World Markets: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, World Markets: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, North America: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, North America: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Classification, North America: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Western Europe: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Western Europe: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, Western Europe: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Eastern Europe: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Eastern Europe: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, Eastern Europe: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Asia Pacific: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Asia Pacific: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, Asia Pacific: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Latin America: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Latin America: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, Latin America: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Middle East: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Middle East: 2017-2026
  • Utility-Scale Energy Storage for Ancillary Services Deployment Revenue by Service Type, Middle East: 2017-2026
  • Utility-Scale Energy Storage Power Capacity Additions for Ancillary Services by Service Type, Africa: 2017-2026
  • Utility-Scale Energy Storage Energy Capacity Additions for Ancillary Services by Service Type, Africa: 2017-2026

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