1. Home
  2. Featured
  3. Global energy storage market to grow over 5-fold to $100 bn by 2025: WoodMac
Global energy storage market to grow over 5-fold to $100 bn by 2025: WoodMac

Global energy storage market to grow over 5-fold to $100 bn by 2025: WoodMac

0
0

The energy storage market is anything but predictable. As it continues to mature, more credible pipelines are developing. China, Australia, and the US all have grand ambitions to deploy gigawatts’ worth of energy storage each year out to 2025

New Delhi: The global energy storage market is set to grow 13-fold to 230 GW by 2025 with the total energy storage investment projected to increase from $18 billion in 2019 to $100 billion by 2025, research and consultancy firm Wood Mackenzie said.

“The energy storage market is anything but predictable. As it continues to mature, more credible pipelines are developing. China, Australia, and the US all have grand ambitions to deploy gigawatts’ worth of energy storage each year out to 2025. We expect these to be the key global growth markets over the outlook period,” Rory McCarthy, principal analyst, Wood Mackenzie said.

According to the research firm, one trend to keep an eye on post-2020 is hybrid energy storage. One-third of all storage deployed in 2019 was part of a hybrid system, although deployments of wind-paired projects were negligible in 2018, they tied with solar in 2019.

“In 2018 and 2019, we began to see a more commercially viable hybrid storage market take off. Solar-paired storage was the clear winner in 2018, with 582 MW deployed against wind-paired at 57 MW. However, in 2019, these two technologies were deployed in equal amounts,” said McCarthy.

He also added that solar-paired storage is expected to take over in the coming years, as decision-makers overseeing policy and procurement processes come to regard it as a lower-cost option versus wind-paired storage.

The research agency said that the global energy storage market contracted for the first time last year, falling from 6.2 GWh in 2018 to 5.3 GWh in 2019 and was primarily due to market declines in South Korea, China, the UK and Canada.

Coming to the impact of the coronavirus pandemic, the research agency said that if coronavirus containment measures continue to curtail movement of goods and people through Q2 this year, alongside an economic downturn, the market impact could trim its 2020 global energy storage deployments forecast by 19 per cent.

This equates to a 3 GW reduction over the year, which would still make 2020 a record-breaking year with 12.6 GWh deployed, it added.

“As this happened in China, Japanese and South Korean facilities ramped up to capitalise on the shortfall. As of March, restrictions have been lifted and production facilities in China are now at 60 per cent to 70 per cent of pre-virus levels,” said Le Xu, senior research analyst, Wood Mackenzie.

Xu added that as such, the major risks to battery supply have been somewhat mitigated. However, mitigation efforts will likely see the battery supply chain accelerate. This will have far-reaching implications, not just for energy storage but for the global economy too.

According to WoodMac, a recession for 2020 is looking imminent and outside of installation restrictions there will be additional downward pressure on demand as consumers spend less on luxury high-cost items, such as residential energy storage.

“For large scale projects, particularly in markets where energy storage is predominantly a merchant play, financiers’ appetite for this type of asset is already being reduced. Final project investment decisions will be pushed further out to when market conditions make the risk-return-ratio for this asset class more palatable,” said Xu.

WoodMac added that despite slowdowns in key markets and this year’s coronavirus crisis, the industry should return to growth in 2020.

Source: WoodMac
Anand Gupta Editor - EQ Int'l Media Network

LEAVE YOUR COMMENT

Your email address will not be published. Required fields are marked *