by Shane Henson — November 15, 2013—Led by lithium-ion (li-ion), emerging battery technologies used in the backup and uninterruptible power supply (UPS) markets will grow six-fold from $143 million this year to $896 million in 2020, according to a new report, Backup and UPS: Stable Growth in the Unstable Stationary Storage Markets, released by Lux Research, an independent research and advisory firm providing strategic advice and ongoing intelligence for emerging technologies. This growth is expected as storage developers shift focus in the face of tumult and uncertainty in the emerging grid storage market.
Li-ion batteries are expected to account for a bulk of this market, reaching $553 million in 2020, and additionally restoring demand-supply balance in the li-ion market. The medical, commercial and datacenter operators are the major users of the conventional backup and UPS markets, which have a global installation base of 800 gigawatts, or 15 percent of global peak consumption, Lux Research notes.
Emerging storage technologies grow to $896 million in large, stable stationary markets, the graph shows.
(Click on image to enlarge)
According to the firm, the li-ion chemistry offers enhanced life and power density over incumbent lead acid systems, justifying higher capital expenditure. This market growth carries an additional payoff in bringing the global demand for stationary li-ion systems in line with forecasted supply, ending years of glut.
For the report, Lux Research analysts studied the broader impact of the battery technologies on the global stationary storage market. Among their conclusions:
- Li-ion offers modest cuts in TCO: As lithium-ion developers struggle to find large-volume customers, the UPS and backup markets offer a chance for modest, steady growth. The sector will add 12.5 percent to global demand for stationary lithium-ion systems. The li-ion developers, in return, offer a modest 4 percent to 11 percent reduction in total cost of ownership over competing lead acid.
- Sodium nickel chloride battery market will grow: The sodium nickel chloride battery, which offers significant cost benefits for high-use applications on account of its low capital cost and significant energy capacity, will grow to $116 million in the backup market in 2020. On the other hand, power-dense technologies, including flywheels and ultracapacitors, will not find a home in UPS because of their low energy density and prohibitive cost.
- End to li-ion glut in sight: Of the 14 gigawatt hours (GWh) of forecasted li-ion production in 2017, only 5 GWh will target stationary applications, thanks to demand from the consumer and mobile sectors. This will help strike a delicate balance between global supply and demand, ending years of oversupply and eroding margins.
