The report summarises the drivers of the global battery storage market including the drive to decarbonise, the upgrading of electricity grids for reliance and stability reasons, energy security at both a nation level and household level, rapidly reducing costs and improving performance of lithium-ion batteries and the development of ancillary technologies allowing new business models to develop. There are, however, a number of constraints and barriers to growth that remain that policy makers and industry participants need to be aware of. The development of ancillary technologies however are enabling the development of new business models that are underpinning the growth of the market regardless of regulatory barriers.

Drivers of growth:

• Cost and performance: The cost of lithium ion batteries have fallen dramatically over the past decade.
• Grid modernisation: Many developed countries are embarking on grid modernisation programs to boost resilience and improve efficiency. This involves deploying smart technologies within established grids to enable two way communication and advanced digital control systems and integrated distributed energy resources.
• Global movement toward renewables: The growing demand for clean energy amongst all types of consumers is increasingly pervasive.
• Wholesale electricity markets: Battery storage can help balance the grid and improve power quality regardless of the generation source. Batteries are able to respond to system imbalances almost instantaneously.
• Financial incentives: Governments are offering a number of incentives to encourage the deployment of battery storage including direct capital support, tax rebates or subsidised financing.
• Phase out of Feed in Tariffs: The phasing out of feed in tariffs are driving the need to make behind the meter storage more economic.
• Desire for self-sufficiency: There is increasing demand from both residential and commercial and industrial consumers to become more self reliant.
• National policy: National policies aimed at lessening dependence on energy imports as well as broader decarbonisation policies.
• New business models: The development of ancillary technologies such as blockchain and artificial intelligence are enabling new business models to develop. These include storage aggregators allowing energy storage to be shared and peer to peer trading models to be economically viable.

Challenges to growth:

• Perceptions of high prices: People’s perceptions of the cost of batteries and supporting technologies can be outdated. Economic modelling also needs to take account of future price decreases.
• Lack of standardisation: There is a lack of standardisation in technical requirements, processes and policies across the industry.
• Outdated regulatory policy and design: Regulatory policy is lagging the energy storage technology that exists today eg: whether batteries are classified as generation, load or transmission and distribution infrastructure and the  allowance of time of use rates.
• Incomplete definition of energy storage: Energy storage suffers from an incomplete definition amongst regulators leading to a lack of understanding of how to assign value to the full range of applications they provide.

1. Prices have dropped from $1,000/kWh in 2010 to $209/kWh in 2017 driven primarily by the growth in the electric vehicle market as well as stationery energy.
2. The adoption of battery storage is accelerating around the world beyond most predictions. This is driven by both the improvement in performance and cost of battery technology but also because of the development of adjacent technologies such as Artificial Intelligence and Predictive Analytics.
   
   
3. The use of batteries is much more than just to support renewables. It is increasingly being used to provide grid stability and reilience regardless of the generation source. It is therefore being adopted by countries establishing their energy systems as well as those with more mature energy systems.
4. Batteries play a critical role in offsetting the intermittency of renewables and reducing curtailment. However, battery solutions which can be deployed rapidly and with pinpoint precision can be used to make the overall grid more efficient and resilient regardless of their generation source.
5. Nearly every country is revamping its wholesale market structure to allow batteries to provide capacity and ancillary services such as frequency regulation and voltage control.
6. Incentives for batteries are particularly generous in countries with energy security concerns.
7. New business models are rapidly emerging powered by artificial intelligence, blockchain and predictive analytics. This is allowing aggregators offering storage as a service directly to end customers and utilities. It is proving financially viable despite lack of widespread access to wholesale markets. The potential for aggregation increases with the growth in electric vehicles the batteries in which can be pooled to provide grid services. The development of energy "pools" in a cloud environment also allow electricity consumers to trade stored and self generated energy directly in peer to peer trading platforms.