Get ready for a whirlwind of global battery tourism.
After studying abroad in the U.K., Germany, South Korea and Australia, Storage Plus is backpacking its way across all the other burgeoning markets that a savvy storage connoisseur needs to be familiar with. We won’t have time to stay long enough to learn the language, but you should at least know enough to sound worldly and informed if and when the topic comes up at a cocktail party.
We’re not going to hit every country that has ever dabbled in batteries, but this list will cover the most promising up-and-comers, huge potential markets that are just being tapped, and a few wild cards to spice things up.
It's not a geographically complete spread. Hot spots in North America, Western Europe and East Asia dominate, and Africa and South America are underrepresented. Even those further along in their market evolution are just getting started.
The early pioneers are writing the playbook for how to go from zero to non-zero. They each bring their own needs and geopolitical peculiarities, but much of this knowledge can and will travel across national boundaries. Let the journeying begin.
The neighbor to the north shares many things with the U.S.: football, Thanksgiving, Justin Bieber, energy storage development and technological expertise.
Provinces like British Columbia and Quebec enjoy a wealth of emissions-free, dispatchable hydropower, so they don’t have much impetus to get into the storage business. Ontario, however, has seen a flurry of activity around its Global Adjustment mechanism, which charges large customers based on consumption during five hours of system peak in a year.
That incentive was juicy enough to attract the largest customer-sited battery in North America: 10 megawatts, two hours duration, built by Convergent for a large petrochemical facility last summer.
“Ontario’s demand charges are bigger than anywhere else,” Frank Genova, chief operating and chief financial officer at Convergent, declared at the time.
Commercial storage specialist Stem raised a CAD $200 million financing facility from the Ontario Teachers’ Pension Plan in July to chase this market as well.
Ontario’s Independent Electricity System Operator has also taken chances on unconventional storage technology. Its 50-megawatt storage procurement awarded contracts to several flow batteries as well as Toronto-based Hydrostor, which stores energy by compressing air into waterlogged underground caves.
Wicked competition for Atacama Desert renewables has created an economic driver for grid-scale storage here.
Chile’s auctions have seen developers continuously push the envelope of solar cost reductions and drive down the cost of generation by 75 percent since the first round in 2013. With margin compression during peak solar hours, companies like Cox Energía and Acciona have bid to deliver generation at night, requiring energy storage.
Fluence has been building grid batteries there since 2009, pairing them with thermal plants for greater reliability and operational efficiency.
This could be the biggest market one day, but it’s just getting started. It’s also a hard one to tap into if you don’t happen to be a large, state-backed energy company based in China.
China’s voluminous renewables expansion has resulted in expansive curtailment. Early grid storage projects have focused on capturing the generation that would otherwise be thrown away. Meanwhile, the industry is looking for greater policy and regulatory clarity to define storage business models.
“Generally speaking, all energy storage projects — whether they are behind-the-meter, ancillary services, grid-side, or renewable integration applications — are in dire need of a market mechanism that can help bring about sustainable development,” the China Energy Storage Alliance wrote in November.
The Chinese government has prioritized flow batteries more than any other country, due to the technology’s promise of heavy-duty cycling without degradation. China also controls an ample vanadium supply, making vanadium flow technology less risky. This could be the first market where large-scale flow becomes a norm — some estimates put it at half of China’s storage investment by 2024.
Chinese investors have acquired several exotic battery companies that ran out of cash. Western companies that still stand have to work with local partners to break into China, like ViZn Energy’s collaboration with an industrial conglomerate.
The renewables market in India is taking off in a big way: The government has targeted 225 gigawatts deployed by 2022, and that date really isn’t that far off. This growth spurt, though, will pump generation into a fragmented grid that doesn’t always get the power to where it’s needed.
Storage can help smooth out the volatility of massive intermittent generation, and it’s already starting to.
AES and Mitsubishi developed a 10-megawatt/10-megawatt-hour battery at a substation in Delhi that, they said last week, marks the first grid-scale deployment in India. AES spinoff Fluence supplied the Advancion system. The customer, Tata Power Delhi Distribution Limited, will use it for grid stabilization, peak load management, and better reliability.
“Grid-scale energy storage will pave the way for ancillary market services, power quality management, effective renewable integration and peak load management of Indian grids,” said Praveer Sinha, CEO and managing director of Tata Power, in the announcement.
Tata, dubbed “India’s largest integrated power company,” plays in generation, transmission, distribution and customer services like rooftop solar and electric vehicle charging. It controls 10,857 megawatts of capacity, and reports that 32 percent of it comes from clean sources.
All of which is to say that, if Tata likes what it sees with its first grid battery, it has the scale and wherewithal to kick-start a world-leading storage market single-handedly.
It’s not limiting its ambitions to lithium-ion, either.
Tata Power Company placed the first order for a far-out gravity-based long-duration storage technology from startup Energy Vault. That system, slated for installation this year, will use six automated crane arms to stack concrete monoliths with excess renewable power, dropping them down to release the stored energy.
It’s too early to call this one a storage market, per se, but it’s got the makings of a healthy growth area. The small desert nation has begun ramping its solar capacity and opening up to more competitive foreign bids, but it has to balance its grid within its borders.
In the southern Arava region, solar already powers much of the daytime consumption, and local leaders want energy storage to let them extend that into the night.
The country’s most successful cleantech enterprise, SolarEdge, recently branched out from solar inverters to acquire battery manufacturer Kokam and electric vehicle firm SMRE. Its leadership has targeted front-of-the-meter storage as a growth opportunity with the Kokam purchase, and it would be well positioned to pursue that close to home. SolarEdge also supplies inverters for home batteries.
Italy built up the second-largest residential storage market in Europe (Germany takes first place), thanks to generous rebates on storage capex and tax relief for households that use batteries for solar self-consumption. High energy bills are a major driver.
It also helps to have an enthusiastic corporate leader. The major Italian utility, Enel, has emerged as a bullish clean energy adopter. It acquired storage developer Demand Energy and smart car-charging company eMotorWerks, and clearly has an interest in delivering cleantech into customers’ homes.
As an island grid with renewable ambitions and a thriving technology industry, Japan is ripe for storage market growth.
It is home to major players in the battery industry, like Panasonic, Toyota, Kyocera, Tabuchi and others. Major utility Tepco, SoftBank and industrial conglomerate Itochu are seeding investments in promising overseas grid edge startups to assemble a toolkit for remaking Japan’s grid.
Megawatt-scale deployments have been hitting the grid for the last several years, tackling constraints and renewables integration.
On the residential side, a 2009 feed-in tariff is going to phase out this year, which will leave some half a million solar customers suddenly missing the export payments they’ve gotten used to. This dynamic fueled major home storage uptake in Germany and Australia.
The first grid battery went live in Mexico last fall, providing system reliability for an off-grid microgrid at a car factory in Monterrey.
That was surprising, because when people talk about developing storage in Mexico, they usually frame it as a renewables integration play, like time-shifting solar in the remote Baja Peninsula. That makes sense in the abstract, but there need to be clear forms of compensation before investors can buy in, and that hasn’t materialized just yet.
A national battery boom may be further off than expected: President Andrés Manuel López Obrador canceled the upcoming energy auction, shocking the renewables industry and threatening the energy reforms begun under his predecessor’s administration.
The previous auctions produced record-low prices and put Mexico on the map as a leading solar market; the cancellation effectively killed the momentum that was building. If it’s hard to develop renewables there now, storage is even harder.
If the situation clears up, however, the fundamentals remain positive. Mexico enjoys a stellar solar resource, and it can tap the storage industry experience in the U.S. with relative ease.