Earlier in May, American electric car maker Tesla Motors Inc. made a
splash in the energy sector when it revealed a new type of lithium
battery packs for home and enterprise applications. Tesla touted its new
line of energy storage systems, known as Power Wall, would
fundamentally change the way the world uses energy and get the world’s
consumption of power down to zero carbon levels. The Powerwall has two
models: one with 7 kWh for day use and the other with 10 kWh for backup.
The retail prices for these systems at most would not go over USD
3,500. As for enterprise clients, Tesla offers Powerpack, a bigger
version of Powerwall with 100 kWh capacity. “Tesla’s new power storage
units for home use are cost-effective for consumers,” said Duff Lu,
research manager for EnergyTrend, a division of TrendForce. “We
therefore can expect similar products to take off following the drive
that the Powerwall has created with its market entry.”
PV systems working in conjunction with energy storage systems are the
most popular type of project in the new energy market right now.
EnergyTrend projects the market scale for this kind of energy storage
systems will climb rapidly from 226 MWh in 2015 to 1,628 MWh in 2018.
Furthermore, the market growth for household energy storage systems will
surpass that of the industrial and enterprise applications. In the
future, energy storage systems will become more available in both
household and industrial applications (including uses in the new energy
sector).
According to Lu, demands in the energy storage market in general has steadily risen because of the following factors:
1. The current demand for batteries are ever-increasing because of the widespread use of various consumer electronic products.
2. The feed-in tariff (FiT) rates for electricity generated by PV systems are lowered yearly worldwide, but the retail electricity prices remain high.
3. The power generation industry has increased its overall conversion efficiency, and this in turn has also lifted the market demand for energy storage application.
4. Energy storage systems are presently seeing a steady price drop.
2. The feed-in tariff (FiT) rates for electricity generated by PV systems are lowered yearly worldwide, but the retail electricity prices remain high.
3. The power generation industry has increased its overall conversion efficiency, and this in turn has also lifted the market demand for energy storage application.
4. Energy storage systems are presently seeing a steady price drop.
Currently, energy storage systems for home use have been promoted and
supported by government programs around the world. Japan, Germany, the
United States and China have in turn created subsidy schemes for energy
storage products. For instance, the latest FiT program announced by
Japan’s Ministry of Economy, Trade and Industry gives preference to the
under-10kW PV installations that come with an energy storage system. The
FiT rate for them is set higher at JPY 35/kWh because they can provide
backup power and be configured for peak shaving. However, PV systems
that are without energy storage systems have a reduced rate of JPY
33/kWh. Consequently, batteries will become a necessary feature in
electricity generation systems for self-consumption because they will
prevent surplus power from being wasted. Energy storage systems also
offer the advantage of grid-tied electricity generation systems to sell
excess capacity. Such cases include Japan’s electricity buyback program,
which many countries will likely to emulate.
The United States’ renewable sector is expected to reach 70GW
generation capacity by 2020. By that time, California aims to have 33%
of its energy from renewable installations. Taking account that 3~5% of
the United States’ renewable capacity in 2020 will be used for power
backup, the country’s total demand for energy storage systems to
complement the installation target will be about 2~3.5 GW. Furthermore,
California Public Utilities Commission has recently passed a related law
that mandates the state’s top three power companies to add at least
1.325 GW of energy storage by the end of the decade. In sum,
California’s policies will drive the developments of large-scale energy
storage systems in the near future.
Lu further notes industries in China’s renewable energy sector are
seeing accelerated growths, and they all complement developments in
energy storage systems. These include grid-tied projects, distributed
generation projects, micro-grids and plug-in vehicles. The market for
energy storage systems in China is still in its early phase with
lead-acid batteries being the mainstream products. The scale of the
country’s energy storage installations currently in operation is above
50MW. Wind turbine systems represent the largest proportion in China’s
renewable sector, but nearly 10% of power that they generate is lost
because these wind turbine systems have not been optimized and are not
tied with an energy storage system. Demands are also turning up for
distributed generation and micro-grid solutions. They encompass the
electrification of rural communities, renewable systems for coastal
islands and other rooftop PV system projects. On the whole, China is
different from other markets that mainly cater to household or
industrial demands. The country’s diverse environments offer
opportunities in many applications.
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