Grid Stabilisation Challenges to Drive Battery and Power Management Markets

Ryan Sanderson, IHS


There is an emerging market for energy storage and management in renewable energy generation

Over the last decade, growth in population, and advances in technology and communications have placed a continuously increasing demand on power generation, distribution, control and storage. To meet global demands, the number of power stations has increased rapidly to provide power to those connected to the power grid. In recent years many regions around the world have invested in renewable energy sources in order to reduce environmental impacts related to energy produced from fossil fuels. This has created new challenges and opportunities in many related markets. Batteries have been used in energy and infrastructure for many years. They provide reserve power and are also used to regulate power fluctuations, slow/start turbines safely and aid with grid stability. There is an emerging market for batteries for use in renewable energy generation and storage and to manage the challenges that an increasing number of sources feeding into the power grid bring. Recent analysis of the global stationary battery market from IHS revealed that explosive growth is projected in the energy and infrastructure sector, owing largely to demand for batteries for renewable energy and storage, driving forecast growth of $6.3 billion from 2012 to 2017. This is predicted to bring many opportunities for battery packers and battery and power management solution providers as well as the obvious opportunities for battery manufacturers. It is also predicted that these opportunities will not just be confined to renewable energy storage solutions. The market for stationary batteries used in traditional power generation, switch gear and control is also predicted to grow rapidly from $520 million in 2012 to $800 million in 2017. More than 90% of the market in 2012 was accounted for by lead-acid batteries with the majority of the small remainder accounted for by nickel cadmium batteries. Total market share for lead-acid is predicted to reduce slightly to account for 80% of the market in 2017. This is largely due to a predicted rapid increase in demand for lithium-ion batteries in this sector. As there are a rapidly increasing number of renewable energy installations which feed directly in to the main power grid, fears of this producing grid instability are driving a market for stationary batteries used to regulate fluctuations and spikes during energy generation. Whilst VRLA lead-acid batteries are suitable and strong growth is projected for their use for this purpose, the capabilities of lithium-ion batteries to charge rapidly following rapid discharge and to be able to cope with many more charge/discharge cycles throughout their lifetime, make them an attractive solution for this function. This is predicted to drive strong growth in the market for lithium-ion batteries used for grid stabilisation in traditional power plants, growing from just $0.2 million in 2012 to $94 million in 2017. The requirement of a battery management system (BMS) for lithium-ion batteries is where the majority of opportunity lies for power management and battery management solution providers. Simple battery management systems (BMS) are used extensively in consumer electronics and usually consist of one or more battery management ICs to control charging, perform authentication, provide protection, measure the state of charge, and balance the cells. For medium and large format stationary lithium-ion batteries, the BMS is crucial as lithium is inherently unstable. These larger format lithium-ion stationary batteries are a relatively new and rapidly growing market for semiconductor manufacturers who supply components for use in the BMS. Demand for greater accuracy, monitoring and feedback, however, is also driving demand for BMS used with other more established battery types, such as lead-acid, which is forecast to drive a number of additional growth opportunities in the next five years. IHS