The energy storage market will grow 12-fold in the years to 2030, increasing to 125 gigawatts of capacity globally, a new energy forecast report states.
The study by Bloomberg New Energy Finance predicts massive future growth in energy storage investments of up to US$103 billion ($136 billion), and commissioned energy storage projects.
"The industry has just begun. With so much investment going into battery technology, falling costs and with significant addition of wind and solar capacity in all markets, energy storage will play a crucial part in the energy transformation," the report's author, Bloomberg New Energy Finance energy storage analyst Yayoi Sekine, said.
It forecasts utility-scale storage could become a practical alternative to building new generation facilities or reinforcing local energy distribution networks.
Energy storage is swiftly becoming a key resource for helping nations to manage their grid stability and meet peak demand needs, AES Energy Storage Vice-President Praveen Kathpal told Fairfax Media.
"Battery-based energy storage is a proven, dispatchable, fuel-agnostic resource available now, which can provide Australia with much-needed flexibility on its electric grid and capacity to help assure a reliable electricity supply," Mr Kathpal said.
"Energy storage, unlike other grid infrastructure, provides the unique ability to store excess electricity and deliver it when and where it is needed to utilities, industrial and commercial customers, independent power producers, and power system operators."
The cost of these utility-scale battery systems will likely decline significantly by 2040, the report finds, falling from around US$700 per kilowatt hour of storage capacity in 2016 to less than US$300 per kilowatt hour.
A recent International Energy Agency report predicted pumped storage hydropower would dominate the sector and currently accounts for more than 99 per cent of global large-scale storage.
China aims to rapidly grow its pumped hydro storage capabilities by two thirds, from 27 gigawatts in 2016 to 40 gigawatts by 2020.
In Australia, there are a number of major pumped hydro storage projects under development, including the Snowy 2.0 project in New South Wales, which could provide 350 gigawatt hours of energy storage, Kidston in Queensland which could provide up to 2000 megawatt hours, the Cultana project in South Australia, which uses seawater rather than freshwater and has up to 1770 megawatt hours of storage capacity, and the expansion of existing Tasmania's hydro storage scheme.
The Bloomberg report also predicts consumers will install their own batteries, with Australia expected to see the world's highest proportion of cumulative deployment of behind-the-meter battery storage.
The federal government made energy storage a pillar of its new National Energy Guarantee policy as it sought to smooth out intermittent supply from some renewable sources.
However, Bloomberg warned that NEG could potentially threaten the growth of battery installations, as it could reduce the attractiveness of batteries compared to the expansion of gas generators and pumped hydro.
