China's energy storage market to exceed $6b by 2024

A growing ancillary service industry and smart-grid infrastructure investments will drive demand.

The size of China’s energy storage market is set to surpass the $6b mark by 2024 on account of a rapidly growing ancillary service industry, coupled with ongoing investments towards smart grid infrastructure development, the latest study by Global Market Insights, Inc. revealed.

The country’s ancillary services energy storage market size is projected to witness exponential growth owing to rising need for grid resilience and stability primarily driven by continued substitution of thermal power with renewable power sources. Additionally, legislative reforms favoring the development of ancillary services industry across the country, particularly in the “Three North Region”, will further enhance the industry landscape

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The report added that rising deployment of energy storage devices aimed towards enhancing the grid stability as a countermeasure to the effects of extensive penetration of intermittent power from renewables will augment the industry size.

“Declining technology costs in conjunction with the development of new technologies and advancement of existing systems will positively influence China’s energy storage market size,” the report’s authors noted, adding that lithium ion batteries have witnessed a drop of over 50% in per unit costs in the last few years, and will continue to follow the trend. “Reformative business scenario along with improving economies of scale across battery manufacturing industry will further stimulate the industry size.”

Additionally, a shifting focus toward limiting carbon emissions to curb the consequence of global warming coupled with rising implementation of supportive legislative endeavors could boost China’s energy storage market growth.

Whilst the ongoing reduction in government subsidies on renewables may impact the industry, the subsidy benefit losses may be compensated by reducing technology prices, the report’s authors said.

Also read: China greenlights first round of subsidy-free wind and solar projects

China’s flow vanadium energy storage market is also projected to exceed $3b by 2024, as the ability to offer virtually unlimited storage capacity, long scale duration, rapid response time, and negligible self-discharge are expected to be some of the key features which make the technology suitable for large scale renewable integration applications over its available alternatives.

“Furthermore, vast reserves of vanadium in the country may imply lower prices, minimal currency risks and ease of availability for the manufacturers, which will propel the industry growth,” the report’s authors added.

Meanwhile, China’s lithium ion energy storage market is set to witness vigorous growth on account of continued reduction in technology costs driven by economies of scale across battery manufacturing. High energy density, low maintenance and high coulombic efficiency are expected to be the prominent features that will strengthen the product penetration.