US, Japan, and China Lead the $113.5 Billion Grid Storage Market in 2017

Despite regulatory uncertainty, a highly-fragmented global market, and a risk-averse client base, the demand for energy storage on the grid will zoom to $113.5 billion in 2017, from a $2.8 billion market in 2012, reaching 185.4 gigawatt-hours (GWh) of capacity from 3.2 GWh, according to a Lux Research report.

Lux Research analysts developed a dynamic Grid Storage Demand Forecaster to evaluate the internal rate of return (IRR) and levelized cost of electricity (LCOE) of eight grid storage technologies in six applications throughout 44 countries and all 50 US states, identifying unappreciated opportunities. The Demand Forecaster also compares the impact of renewable portfolio standards (RPS), the pay-for-performance ruling, and government subsidies on global demand to identify the technologies, applications, regions, and US states with the most promise for grid storage. Five countries divvy up the top 77% of this market:

Region	Market Share in 2017 (%)	Market Share in 2017 (US$ billion)
US	23%	25.7
Japan	18%	20.3
China	18%	20.0
UK	9%	10.7
Germany	9%	10.0

"Utilities need to manage an increasingly variable load of intermittent renewable energy sources and commercial customers require more reliable electricity supplies to mitigate outages that cost the United States alone between $80 billion and $188 billion annually," said Brian Warshay, Lux Research Associate and lead author of the report titled, “Grid Storage under the Microscope: Using Local Knowledge to Forecast Global Demand.” Conclusions gleaned from the report include:

·         Renewable energy shifting shows greatest potential. The largest application for grid storage will be renewable energy shifting, snatching up to $61 billion, or 54% of the demand, in 2017.

·         The Americas are poised to double its market share. Though Asia-Pacific and Europe, the Middle East and Africa (EMEA) hold 88% of the market in 2012, the Americas’ share will more than double from 12% to 25% by 2017, bringing the three global markets closer to parity.

·         Technology diversification is underway. Over the last three years the grid storage market has shifted from one dominated by molten salt batteries to one more diversified, including Li-ion batteries, flywheels, and advanced lead batteries.  

The report, titled “Grid Storage under the Microscope: Using Local Knowledge to Forecast Global Demand,” is part of the Lux Research Smart Grid and Grid Storage Intelligence service.