Technology costs for battery storage continue to drop quickly, largely owing to the rapid scale-up of battery manufacturing for electric vehicles, stimulating deployment in the power sector.
Storage is one of a suite of options to provide energy system flexibility, and it can generally be deployed quickly and modularly when and where flexibility is needed.
Its attractiveness should still be assessed relative to other measures, however, such as demand response, power plant retrofits, smart-grid measures that enhance electricity networks, and other options that raise overall flexibility.
Direct support for storage through mandates and policies remains the most common option to incentivise deployment, but greater emphasis should be placed on making regulations transparent and open, and on developing markets for capacity, flexibility and ancillary services so that storage can compete with other technologies and measures.
In 2019, installations of energy storage technologies fell for the first time in a nearly a decade
For the first time in nearly a decade, annual installations of energy storage technologies fell year-on-year in 2019. Grid-scale storage installations dropped 20%, while residential battery installations doubled, consolidating a shift towards behind-the-meter storage. Continued uncertainty in 2018’s key growth market, Korea, and sluggish activity in Europe and the United States underpinned a lacklustre year for storage. Events in 2019 highlighted how fragile growth in these technologies remains, as they continue to depend heavily on policy intervention through direct support or market creation. Storage needs to return to double-digit growth figures to stay on track with the SDS pathway.