Although small at $95m last year, the growth of renewable energy and electric vehciles will drive the market to $1.4bn by 2020 says a report from market analysts Technavio.
Next generation battery technologies such as lithium sulphur and sodium ion will become mainstream by 2020, driving the growth in this area, says Thanikachalam Chandrasekaran, one of the lead analysts at Technavio for energy storage research.
One of the key drivers of growth is investment in renewable energy production. Increasing demand for energy and proactive governments pushing for green energy initiatives are the main reason for these investments. Renewable sources of power are not constant, and require the most technologically advanced battery technologies to harness the complete power generated. This has resulted in the large-scale adoption of next-generation batteries.
The other important drivers for this market are the increased government support for electric vehicles (EVs) and market-driven innovations to find a balance between energy efficiency and renewable energy.
The report looks at applications in transportation, grid storage and consumer electronics.
Countries all over the world are shifting their focus from vehicles powered by fossil fuels to energy-efficient EVs. The global EV market is expected to post a CAGR of over 42% through 2020, which is a good indicator for the next-generation battery market. The popularity of EVs is due to their high frequency, instant torque, and smooth acceleration.
“Some governments are implementing policies to accelerate the use of EVs as a step toward controlling greenhouse gas emissions. For instance, the US government is increasingly adopting emission reduction mandates and alternative vehicle programs to reduce emissions. This has called for a heightened focus on developing larger EVs to replace normal fossil-fuel powered vehicles,” said Chandrasekaran.
With increased adoption of smart grids and growth in renewable energy production, the demand for grid energy storage has increased. These storage systems store excess power, and this stored power is made available to the consumer during peak hours of demand. This ensures