Insights into factors driving energy storage adoption in the world's Asian markets
December 8, 2015
Energy storage adoption is on the rise worldwide, and that is especially true in the United States, Japan and South Korea. According to market forecast data compiled by IHS Technology, these three nations are expected to collectively install 1.4 GW of energy storage between 2015 and 2016. Additionally, another energy storage price drop is expected by 2019, which will encourage even more adoption worldwide, noted PV Magazine.
For the first time, all three nations will be expected to install over 100 MW in 2015. The U.S. leads the pack with 650 MW of projected storage. Japan follows closely behind at 510 MW, while South Korea will ramp up deployment over the same period to a respectable 280 MW.
Though a few of the world's energy markets are exploding into full-fledged industries, many nations are still in the trial and pilot stages with the relatively new technology. Taking a closer look at the factors driving energy storage in Japan, South Korea and the U.S. can help business decision-makers around the world to evaluate opportunities to leverage energy storage in their facilities.
United States continues to lead the way for storage
Energy storage adoption has gathered serious momentum in the U.S. in 2015. According GTM Research's latest quarterly energy storage project, 40.7 MW of storage was added in Q2 alone. This capacity growth represents a 900 percent increase from Q2 of last year, and it also outpaces the 5.6 MW of storage brought online during Q1, reported Utility Dive.
Several factors have contributed to this adoption and created opportunities for greater capacity increases in the near future. President Barack Obama's announcement of the Clean Power Plan in August, for instance, included the authorization of $1 billion in incentives for the Department of Energy's Loan Programs Office, which includes provisions designed to drive energy storage adoption, according to the Department of Energy.
The need for solutions to address the limitations of renewable energy and stabilize the power grid has also driven greater interest in storage among utilities. California is leading the charge in this regard, in part in response to growing concerns about the demand duck curve. The duck curve refers to large reduction in non-solar energy demand that occurs during the middle of a sunny day, when solar generation exceeds demand and forces grid operators to account for a huge surge in demand in the early evening.
"Interest in energy storage in the U.S. is not expected to decline anytime soon."
Energy storage could be used to manage renewable generation by redirecting excess electricity generated during the day to offset the surge in demand expected later in the day. Given that experts expect California's duck curve phenomenon to create bigger problems for the state as early as 2020, noted the Institute for Energy Research, interest in energy storage in the U.S. is not expected to decline anytime soon.
Japan continues to strive for leadership
Greentech Media noted that interest in solar energy integration has soared in Japan as of late, subsequently creating demand for technologies like energy storage that can be used to simplify the implementation of renewable generation. Responding to this shift, Japan's Ministry of Economy, Trade and Industry approved nearly 81 billion yen in funds to go toward incentivizing investments in energy storage technologies that could be used to assist in the country's transformative integration of renewable generation.
It's not unlikely that Japan's recent explosion of solar energy may create fits for the nation's grid similar to California's duck curve dilemma. If this is the case, then energy storage growth in Japan may be the target of even more growth-spurring incentives.
South Korea advances rapidly despite recent adoption
Despite South Korea being a relatively new entry into the energy storage race, the nation's government, utilities and commercial markets, have come together in their support for technology adoption. The country's first major shift towards energy storage occurred in October of 2014, when Korea Electric Power Corporation added over 50 MW of storage capacity, according to Navigant Research. The Korea Herald reported that the government is also in the midst of passing legislation to dedicate state resources to storage adoption. These shifts in energy markets and state policy support the prediction that South Korea will double its capacity by 2019.
