Press Releases
Energy Storage in Substations May be Small Business Today, but its Time is Coming
Date: 02 February 2012
While energy storage at the distribution substation level accounts for only a small share of smart grid investment today, revenues for energy storage in distribution substations are projected to grow at an average annual rate of nearly 50% for the next several years. IMS Research predicts that energy storage in distribution substations will account for 10% of the nearly $700M global distribution substation power quality equipment market by 2016, and will be fundamental to the achievement of much of the promise of the smart grid.
While enthusiasm for the smart grid is high among utilities, vendors, and even consumers, some aspects of smart grid investment are only just getting started as of early 2012. The benefits of power quality and efficiency supporting tasks, including volt/var optimization, have been well-accepted by utilities, and this is reflected in robust revenue growth anticipated for equipment supporting these functions. In contrast, distribution-level energy storage investment remains primarily limited to large substations with unique, ongoing power availability problems. When utility operators consider the costs of upgrading power lines, or increasing backup or peak generation capacity against implementing energy storage in these circumstances, energy storage can be a compelling, prompt solution. However, with current utility budgets pulled thin and new construction of utility infrastructure slow in developed utility markets, justifying expenditure on energy storage elsewhere at the distribution level (30kV and below) remains difficult for many utility operators.
In the longer term, however, growth in this market is projected to outpace overall power quality, achieving a much larger share of the total distribution substation power quality equipment market by the mid 2010’s. Analyst Donald Henschel comments, “Energy storage at the distribution substation is going to prove to be an important investment area in the mid- to long-term. We anticipate that utilities will enjoy new economies of scale in energy storage equipment over the next several years, coinciding with increased centralized and distributed renewable generation and EV charging putting more powerful strain on existing infrastructure.”
Suppliers with interest in the market for distribution-level energy storage solutions range from the battery manufacturers themselves through integrators and grid specialists like S&C Electric, Schneider, ABB, and Siemens. Many of these same companies participate in the related markets for substation and feeder line automation and control, via various IEDs smart switchgear, volt/var management equipment and other IEDs (intelligent electronic devices). Henschel continues, “When the pressure of increased electrical demand, driven by EV charging or, in some regions, even increased usage of electric heat, combines with the added variable of distributed generation on aging, stressed feeders and transformers, energy storage will be ready to step in. The growth opportunity in the face of these new challenges will be very high, particularly coming from such a small historical market size.”
About The World Market for Distribution Substation Equipment - 2011
This newest report from IMS Research’s smart grid group delves further into smart grid investment in automation and extension of intelligence throughout the utility network. This report builds on previous studies in distribution feeder line automation and smart metering to examine the market for equipment supporting monitoring and control, power quality and switching in distribution substations. Market trends, relative volumes, projected growth opportunities and the competitive environment for equipment suppliers are all offered in this report, on a regional and global level.
Editors Note :
Donald Henschel, IMS Research
donald.henschel@imsresearch-usa.com Tel: +1 512 302 1977
Ann Ruff (subject to change)
Ann.ruff@imsresearch.com Tel: +44 1933 402 255
Yvonne Zhang
yvonne.zhang@imsresearch-china.com Tel: +86 21 6720 1823
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About IMS Research:
IMS Research is a leading independent supplier of market research and consultancy to the global electronics industry, offering syndicated market studies, custom research and consultancy services. Clients include most of the household names in the industry. IMS Research has offices in Europe, the US, China, Taiwan, South Korea, and Japan. To find out more, contact IMS Research: enquiries@imsresearch.com; T: +44 (0) 1933 402255; http://imsresearch.com
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