Stationary lithium-ion market approaching fragile balance in supply and demand
By: SGN Staff
By Steven Minnihan
Lithium-ion start-ups in the stationary space have long been plagued by production oversupply. Small ventures including A123 Systems, Ener1, and Boston Power have suffered cash drains after constructing large manufacturing facilities that sit idle in the absence of market demand. However, the most recent Lux Research report "Backup and UPS: Stable Growth in Unstable Stationary Storage Markets” finds that the stationary lithium-ion market is heading towards a delicate balance between supply and demand in 2017.
Presently, 12 lithium-ion producers are targeting the stationary sectors with a significant portion of their production capacity. If each of these companies were to exclusively target stationary applications, the forecasted production capacity through 2017 would outstrip global demand by over 3:1, as global supply would top 14 GWh in 2017 compared to a mere 4.5 GWh of demand in the same year.
However, many of the companies targeting the grid storage market are also devoting their efforts to the consumer and mobile sectors. Therefore, the full 14 GWh of forecasted production in 2017 will be spread beyond stationary applications. By adjusting the companies’ production numbers in accordance with their current revenue break-out, the adjusted production forecast for lithium-ion cell and systems exclusively targeting the stationary market sectors totals 5 GWh in 2017. At this rate, forecasted demand and forecasted supply for stationary lithium-ion batteries will come to meet before the end of the decade.
Such a balance between supply and demand is rarely seen in nascent technology markets. However, this careful balance will easily be thrown off if and when larger lithium-ion players decide to focus efforts on stationary applications. Behemoths such as Panasonic and NEC have recently accelerated activity in the stationary sector, threatening to dramatically increase the quantity of lithium-ion cell and pack production capacity in the stationary space.
To listen to the complementary webinar titled "Stationary Energy Storage: Will Backup Power Bridge the Gap?”, click here.
Steven Minnihan is a Senior Analyst for the Grid Storage Intelligence service at Lux Research, which provides strategic advice and on-going intelligence for emerging technologies. For more information, visit the Lux Research site.
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