The market studied is expected to grow at a CAGR of 23.5% approximately during the forecast period of 2020-2025. Factors, such as improving energy storage economics, increasing the renewable energy sector, and policies related to support and development of energy storage technology are expected to drive the market over the forecast period in the Asia-Pacific region. On the other hand, high capital investments, along with huge complexity and additional space requirements, are likely to hinder the market growth.
- Pumped-storage hydroelectricity is expected to dominate the market as they provide load at times of high electricity output and low electricity demand, enabling additional system peak capacity.
- The commercial and industrial (C&I) sector is increasingly adopting renewable power generation sources, such as solar and wind energy, for self-consumption. But renewable energy is an intermittent power source and the C&I sector is failing to utilize these resources to its fullest potential. Therefore, to increase the utilization rate of renewable power sources, the C&I sector is expected to increasingly adopt the energy storage systems, which, in turn, creates significant opportunities for the ESS providers in the future.
- India is expected to witness significant demand over the forecast period, due to its rapid developments in the past few years.
Key Market Trends
Pumped-Storage Hydroelectricity (PSH) to Dominate the Market
- The first primary modern application of energy storage was pumped-storage hydroelectricity. In this process, excess energy that is available during off-peak hours is used to pump water back up the hill to an upper reservoir, where it can be added to the regular flow during periods of peak demand.
- Pump storage is one of the more efficient methods of energy storage (around 75%) though it has the drawback of not being instantaneously available. Pumped hydro-storage plants are used for medium- or long-term storage, with discharge time ranging from several hours to few days.
- Typical round-trip efficiencies of PSH range between 70% and 84%. It has an average lifespan above 50 years, as compared to batteries, that lasts for 8-15 years, although significant refurbishments are required from time to time.
- As of 2018, Asia-Pacific accounts for more than 50% of the global installed capacity for pumped hydro storage and around 45% of global generated power from PHS, with China constituting about 30 GW of installed capacity.
- According to the China Energy Storage Alliance's (CNESA), by the end of 2017, China's total operational energy storage capacity totaled 28.9 GW, an increase of 19% from the previous year. Pumped hydro energy storage made up most of this capacity, at nearly 99%. With more projects coming into operation in the next five years, China is expected to retain its leading position in the market.
- * In India, PHS technology is expected to play a significant role in the proliferation of renewable energy generation. In March 2019, the Ministry of Power proposed changes in the electricity rule, to incentivize electricity supply at the times of peak demand, which is a big boost for growth in pumped PHS installation.
- India has 4.8 GW of pumped hydro storage capacity, with Indian government setting a target of 175 GW renewable power installed capacity during the forecast period. Thus, new initiatives and projects are expected to drive the pumped hydro storage market.
- Australia has 5,000 prospective pumped hydro storage sites, with the potential to store up to 15,000 GWh of energy. Furthermore, the Australian Renewable Energy Agency (ARENA) is expected to invest USD 449,000 to support research activities that aim to develop a country-wide atlas of potential off-river pumped hydro storage sites. As of March 2018, the Victorian government in Australia announced its plan to convert some of its gold mine shafts into pumped hydro storage resources.
- Therefore, based on the above-mentioned factors, pumped-storage hydroelectricity is likely to dominate the market over the forecast period.
India to Witness Significant Demand
- The India Energy Storage Alliance (IESA) has estimated over 70 GW and 200 GWh of energy storage opportunity in India by 2022, which is one of the highest in the world. Out of 70 GW, over 35 GW of demand is expected from newer applications like solar integration or electric vehicles, hence there is a sizable opportunity for advanced storage technologies in the new applications.
- On March 31st, 2019, India has installed its first grid-scale battery storage system. It was initially launched in February i.e. AES Corp. and Mitsubishi Corp. have installed a 10-MW battery storage system at a substation in Delhi, India. The system, which includes Advancion technology from Fluence, will be operated by Tata Power-DDL, which, in turn, increases the demand for energy storage systems market. The project is designed to aid the rooftop solar.
- Also, India may emerge the third-largest energy storage installation country by 2040 i.e. energy storage installations around the world will multiply exponentially, from a modest 9GW/17GWh deployed as of 2018 to 1,095GW/2,850 GWh by 2040.
- India has the fifth-largest power generation capacity in the world. The electricity sector in India is growing at a rapid pace. The Installed Capacity 346.6 GW as of 30th Nov 2018, with generation mix of thermal (64%), hydro (13%), nuclear (2%), and renewables (21%).
- During April 2018 - November 2018, the peak demand was about 177 GW, while about 175.5 GW was met (met 99.2%). By 2027, India aims to have 275 GW of total wind and solar capacity, plus 72 GW of hydro and 15 GW of nuclear. Renewable energy's share of installed capacity is forecast to rise to 43% by 2027.
- As of 2018, the annual rooftop solar PV installations in India was 1836 MW i.e. almost double the installations of 2017.
- With the growing renewable sector, the demand for the energy storage system, to address the challenges related to intermittency in renewable power generation, is expected to grow.
- India issued 1.2GW renewable energy storage system tender in August 2019. The tender has been issued under the central government policy and is thus a part of the inter-state transmission system scheme.
- Therefore, based on the above mentioned factors, India is expected to witness significant demand for energy storage systems market in Asia-Pacific region.
The market for energy storage systems in Asia-Pacific region is fragmented, with the presence of numerous players, including Tesla Inc., Contemporary Amperex Technology Co. Ltd, General Electric Company, Siemens Gamesa Renewable Energy SA, and Voith GmbH & Co. KGaA.
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