Asia-Pacific To Be Hub for Energy Storage Technologies in Future

Power plants operating on conventional fuels, such as coal, oil, and natural gas, are detrimental to the environment, as the combustion of such fossil fuels generates harmful pollutants. Owing to the surging air pollution levels across the world, international organizations and governments are encouraging the usage of energy storage systems employing cleaner and non-conventional forms of power generation. Such systems are used to store the surplus electricity for future needs, in situations of extensive power demand or low energy production.

Moreover, the mounting cost of conventionally produced power will drive the energy storage market at a CAGR of 3.3% during 2020–2030. The market size is expected to grow from 171,039.3 Megawatts (MW) in 2019 to 69,917.6 MW by 2030. Most of the power plants are running at full capacity to cater to the high electricity demand, owing to which electricity cost is surging exponentially. To overcome this issue, governments are encouraging the adoption of energy storage systems to store the power generated in surplus or in lower quantities than required.

In recent years, energy storage solution providers have focused on contracting, installing, and commissioning projects. Currently, companies such as Greensmith Energy, Convergent Energy and Power LP, LG CNS, Tesla Inc., Fluence Energy LLC, NextEra Energy Inc., NEC Energy Solutions, Duke Energy Corporation, S&C Electric Company, and Contemporary Amperex Technology Co. Ltd. are launching advanced-technology-based projects and entering into partnerships to facilitate the installation of energy storage systems. For instance, in November 2019, Azelio, a Sweden-based company, partnered with Biodico, a U.S.-based biorefinery operator, to develop energy storage projects with a combined capacity of 120 MW in California by 2024.

Categories under the type segment of the energy storage market include mechanical, chemical, thermal, and electrochemical. Under this segment, the mechanical category generated the highest revenue during the historical period (2014–2019). This can be credited to the natural resource maximizing ability, favorable economics, and sheer storage capacity offered by mechanical storage systems. This category is classified into pumped hydro storage (PHS), liquid air energy storage (LAES), compressed air energy storage (CAES), and others, primarily flywheels.

According to P&S Intelligence, the Asia-Pacific (APAC) region has emerged as the largest user of energy storage systems in recent years owing to the increasing number of project engineering, procurement, and construction (EPC) activities in China, India, and Japan. Currently, power utilities in Asia are viewing these systems as the next level of upgradation in smart grid technologies. Thus, the mounting investments in energy storage solutions on account of the burgeoning demand for stable grids and rising government focus on smart grids will boost their adoption in the region.

Furthermore, Latin America and Africa are expected to demonstrate rapid growth in the energy storage market during the forecast period due to the increasing public and government interest in the potential of battery storage systems and PHES in these regions. Additionally, the plunging raw material prices are encouraging regional governments to install these systems and reduce the base power deficit. In recent years, Argentina and South Africa have installed a large number of PHSs, whereas Haiti has installed a series of battery-based systems in its energy mix.

Thus, the increasing international concern about air pollution and escalating electricity prices are encouraging the adoption of energy storage systems worldwide.