The global energy storage market will expand 13-fold by 2024, according to new research from Wood Mackenzie Power & Renewables.
According to the report, Global energy storage outlook 2019: 2018 year-in-review and outlook to 2024, energy storage has been creeping into decarbonizing markets over the past 5 years. 2018 saw 140% year-over-year growth in GWh terms, with a total of 3.3 GW / 6GWh deployed globally. Half of that capacity was front-of-the meter (FTM), driven by accessible ancillary service revenues in key markets. There was also a notable trend for solar-plus-storage projects providing semi-dispatchable renewable capacity.
Between 2019 and 2024, Wood Mackenzie Power & Renewables expects major storage markets to thrive – with a more mature, but still early stage, GWh CAGR of 38%. Additionally, deployment numbers are expected to boom to 63GW/158GWh.
The U.S. and China are projected to dominate the market, making up 54% of GWh deployed capacity by 2024. This will be driven by market reforms, state mandates and, most importantly, the most significant energy sector transformation since the “Dash for Gas” in the 1990’s.
FTM will retain its position as the largest storage segment through 2024. Storage will move from short-duration systems providing high value power services that are limited sized value pots, such as frequency regulation, into the realm of long-duration systems. At this point, FTM will displace diesel, oil and gas peakers, particularly in fuel import countries where conventional plant run costs are higher.
“We expect renewables-plus projects to become a popular trend through 2024. This is especially true for solar-plus-storage projects, as the requirement for clean and dispatchable renewables is widely accepted.
“In investment terms, we estimate the cumulative global energy storage market – defined, in this context, as total system capital expenditure on electrochemical and electromechanical energy storage systems, excluding pumped hydro – to grow six-fold to a total of $71 billion by 2024. $14 billion of that total will be invested in 2024 alone.
“The electrification epoch will unfold more rapidly over the next 5 years. With it, energy storage will become a necessary technology to enhance system flexibility and enable clean, rapid system balancing, while de-risking ever increasing intermittent assets and portfolios,” said Rory McCarthy, Wood Mackenzie Power & Renewable Senior Research Analyst.