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Emerging Business Models in the Global ESS Market, 2017

  • ID: 4234635
  • Report
  • April 2017
  • Region: Global
  • 59 pages
  • Frost & Sullivan
Transformational New Business Models Focussing on Integrated Distributed Energy Storage Systems

Distributed energy resources and distributed energy storage systems (ESS) are changing the face of power generation and distribution in the Organisation for Economic Co-operation and Development (OECD) countries. To tap these new market opportunities, consumers need to be properly supported with financing options for ESS installations.

The study seeks to bring out the new and emerging business models in the global energy storage systems market. It estimates the total global installed capacity for ESS and provides a detailed discussion of about eight business models across three ESS segments: grid scale, residential, and community-level energy storage systems. The base year for the study is 2017. Implications of the emerging models are analysed. Whilst a limited number of business models are expected in grid-scale ESS applications, majority of them are expected to be adopted in behind-the-meter and community-scale ESS installations.

The top five countries that have adopted new business models in the ESS market are Germany, United States, Japan, United Kingdom, and France. Amongst these, Germany has tested and implemented several new business models in the residential and community sector. The US has followed suit with models in both utility-scale and residential applications. Japan has already trial tested several of these models in four of its smart city projects (that were concluded in 2014). UK and France are keen on developing residential-scale ESS models and ESS aggregation models.

Battery energy storage systems are the most widely used energy storage technology in these countries, and the new business models are used on this technology. Lithium ion is the most accepted battery chemistry.

The major drivers that encourage these models are supportive smart technologies and emergence of prosumers with renewable energy (RE) generation resources of their own. A secondary revenue stream sprouting from the use of an existing ESS asset encourages these private parties to adopt new business models.

However, the key challenge stems from the uncertainty with regard to the payback period when an ESS is installed for these new business models. As the trial projects are concluded, a clear outlook for these models can be arrived at. This is expected to increase their market demand.

Consolidations and partnerships across the ESS and energy value chain can be expected as part of the formation of new financial models amongst the relevant stakeholders (such as battery original equipment manufacturers (OEMs), power utilities, RE project developers, battery management software developers, aggregators, and demand response companies).

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1. Executive Summary
  • Key Findings
2. Introduction
  • Key Segmentation*
  • Energy Storage System Applications
  • Research Aim and Objectives
3. Market Overview
  • Distributed Power Generation and ESS-Key Trends
  • ESS Business Model Innovation-Key Drivers
  • Drivers Explained
  • ESS Business Model Innovation-Key Challenges
  • Challenges Explained
  • Installed Capacity Forecast by Region
4. ESS Business Models-An Overview
  • ESS Business Model Developments
  • Emerging ESS Business Models by Geography
5. Growth Opportunities and Companies to Action
  • Utility-scale ESS-Emerging Business Models as Growth Opportunities
  • Growth Opportunity 1-TSO/DSO-owned Asset Model
  • Growth Opportunity 2-Shared Assets Model
  • Growth Opportunity 3-Third-party-owned Asset Model
  • Best Practices-Regions and Utilities Adopting the Third-party-owned Asset Model
  • Behind-the-Meter ESS-Emerging Business Models as Growth Opportunities
  • Growth Opportunity 4-VPP Model 1-Demand Response (DR) Aggregator Model
  • Growth Opportunity 4-Regional Highlights and Developments
  • Growth Opportunity 5-VPP Model 2-Generation Company (GENCO) Aggregator Model
  • Growth Opportunity 6-Technologies/Service Provider Model-Battery Leasing Model
  • Growth Opportunity 6-Residential ESS Trends in Developing Nations
  • Community Storage System-Emerging Business Models as Growth Opportunities
  • Growth Opportunity 7-Community Energy Trading Model
  • Growth Opportunity 7-Regional Highlights and Developments
  • Growth Opportunity 8-District Storage Model
  • Strategic Imperatives for Success and Growth
6. Other Trends Affecting the ESS Value Chain
  • ESS Trends-Solar + ESS Packages
  • ESS Trends-Battery Second Life
  • Battery Second Life-Regional Highlights and Developments
7. Conclusions
  • Key Stakeholder Analysis
  • Implications and Opportunities
  • Legal Disclaimer
8. Appendix
  • Energy Storage Systems Definition
  • Associated Research and Multimedia
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