Competition between Asia’s big battery makers has seen lithium-ion become the dominant technology for large-scale energy storage systems in the past six years.
Underpinning the rise is cost reductions and a build-up of the auto and power sectors’ supply chain as competition between China’s BYD, GCL, South Korea’s Samsung SDI, LG Chem and Japan’s Panasonic intensifies, according to a report by analytics firm IHS Technology.
The chemistry’s market share has risen from 20% in 2010 to a predicted 90% deployment this year, overtaking lead-acid and challenging sodium sulfur and vanadium redox flow in the utility side market.
Marianne Boust principal analyst at IHS, said the company had seen grid-scale batteries in 2016 costing around $400-500/kWh, and predicts a further 30% reduction by 2018.
“Lithium-ion is also gaining traction in the grid-scale market for longer duration, which has been historically dominated by sodium sulfur and flow batteries,” said Boust.
“Nonetheless, flow battery manufacturers are scaling up their ambitions and betting on superior lifetime of flow battery technology.”
Boust added that although lead-acid use continued in emerging markets where money was the principal concern, IHS was seeing the market shrink in developed countries.
In the first six months of this year around 300MW/500MWh of utility-side meter energy storage projects came online.
IHS also revised its outlook for behind-the-meter installations in 2016 to 1.8 GW from 1.5 GW due to a surge of use in the US, Australia, the United Kingdom and Germany.
Use in behind-the-meter applications is also set to grow as the US prepares to introduce a draft bill to grant a 30% tax credit on residential and commercial energy storage systems.
South Korea is considering mandating energy storage in public buildings, as well as allowing energy storage to participate in the South Korea wholesale power market.
Read more about the renewable energy and storage, including further insights from Boust, in the Summer edition of BEST magazine, available here.