Grid-scale storage wars will rack up big casualties, says researcher

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Quick Take: We're big believers in the long-term value of grid-scale energy storage, especially when utilities "stack" the benefits to make energy storage pay for itself right away. But just because the category is going to grow doesn't mean that all of the players will prosper. The last three years has seen a growing number of venture-backed startups, plus new emphasis from existing players. Not all of them will make it, as the report below emphasizes.

Storage's biggest "enemy?" It's the low cost of natural gas due to recent advances in extraction technology. Many utilities can simply build natural gas peaking plants rather than use riskier techniques such as storage. – Jesse Berst

The title of a new report from Lux Research pretty much tells the story: Grid Storage – Islands of Opportunity in a Sea of Failure. While grid-scale energy storage can help deal with electric grid headaches like congested power transmission, intermittent renewables generation and the demands of EVs, it faces severe challenges from high capital costs and competition from cheap and established natural gas plants. So, as Lux Research concludes, very few storage technologies will survive – most will fail.

The report covers a wide swath of aspects and applications in commercial and industrial on-site storage, distribution and transmission support, transmission and distribution capacity, ancillary services and renewables integration. It also looks at the potential of storage technologies for utilities, transmission operators, independent power producers and commercial and industrial building operators in California, Germany and China. In addition, the Lux Research analysis adds up the pluses, minuses and overall value of a number of storage technologies.

"Grid storage technologies only make sense under very specific certain scenarios, such as a lack of natural gas peaker plants or an abundance of renewable generation," said Steve Minnihan of Lux Research, the report's lead author. "And even with those scenarios, customers will need to select technologies carefully. Finding a successful solution isn't as simple as plugging in a battery."

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