Huge Growth Predicted For Distributed Energy Storage Systems

Distributed storage is among the fastest-growing markets for energy storage, according to a new study by Navigant Research which looks at how the market will grow over the next few years.

The report suggests that the worldwide capacity of distributed energy storage systems (DESSs) – including community, residential and commercial energy storage – will increase nearly ten-fold in the next three years, growing from 276 megawatts (MW) in 2015 to nearly 2,400 MW in 2018.

“In particular, residential and commercial energy storage are expected to be the focus of technological advances and market activity in the coming years,” explained Anissa Dehamna, senior research analyst with Navigant Research.

Although Western Europe is seeing renewed interest in community energy storage, this segment will continue to lag behind the residential and commercial markets, the research firm said.

Navigant found that, driven by rapid innovation and intense competition, the market for DESSs has exceeded industry expectations for growth and market volume in recent years. Grid operators, utilities and governments are responding to demand by encouraging storage installations that are physically situated closer to the retail electricity customer.

According to the report, growth in the market is being fuelled by the development of advanced battery chemistries, particularly lithium ion (Li-ion). Meanwhile, the expansion of renewables, electric vehicle charging and home energy networks has created new applications and new demand for DESSs.

Looking at the challenges that lie ahead, the report said that advances still need to be made in cost reductions, software and controls, and integration expertise across nearly every storage technology.

Vendors in pole position are those that have cultivated strong distribution networks and offer one or more of the following in addition to energy storage: advanced software and controls, alternative financing structures, or integrated solar PV.

By 2024, Navigant Research expects the total worldwide distributed storage capacity to exceed 12,000 MW.

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