issues & insights
Korea. Its impact is likely to be maximised after 2017, when the stress on Renewable Portfolio Standards (RPS) is likely to gain maximum mileage. However, it is widely expected that ‘frequency regulation’ will be the major demand driver for utility-level energy storage in the short term, and that renewable integration will be the main source of demand in the medium to long term.
Growth Of Smart Grid & Demand For Better Grid Facilities market. The majority of them were located in Japan. However, over the last two years, the domestic supplier eco-system for lithiumi o n b a t t e r y m a n u f a c t u re r s has been on the rise and the government has introduced measures to support these small and medium enterprises by:
consortiums exist that manage the few demonstration projects. Gradually, as this technology develops and commercialises, it is likely that a strong value chain would develop to support these installations as well.
• Providing financial support to those firms that made initial losses and,
Despite all the support infrastructure and overall ecosystem growth, the need for ESS in grid integration or at the utilitylevel is the key driver for market growth. This support in the form of market demand is expected to remain in South Korea due to the following: Renewable Integration into the grid is governed by stringent renewable portfolio standards. As per the recently released 6th Basic Plan, up to 20 percent of the overall generating capacity would be served by Renewable Energy (RE) by 2027. Of this, three percent of the peak demand would be from RE sources, which would have to be integrated into the grid through ESS. The intermittency in solar and wind capacity has to be eliminated for the integration of these RE sources to the grid that would increase the demand for utilitylevel energy storage in South
• Promoting collaboration between the lithium-ion battery companies and domestic component suppliers by setting up industry associations Besides, established homegrown battery companies such as Samsung SDI, LG Chem, and SK Energy prefer to source from local component suppliers as that gives them cost advantage and technology protection. Furthermore, the downstream segment of the value chain involves Energy Storage System (ESS) integration with Battery Management Systems (BMS) and Power Conversion Systems (PCS). Companies such as Hyosung and LSIS are well-known in this space as ESS integrator companies. F o r C A E S t e c h n o l o g y,
Future Need For Utility-Level Energy Storage Systems
South Korea currently has many smart grid installations coming up and has additional plans for the installation of newer smart grids. With ESS being a basic requirement for smart grids, the smart grid plan will increase demand for utility-level ESS. With time and the increasing cost of power, end users are likely to demand better grid facilities like demand management, time-of-use services and frequency regulation etc. Utility-level energy storage would be crucial to provide these services to end users. While market dynamics are expected to drive the growth of utility-level energy storage, initial government support for energy storage and utility regulations that provide economic benefits for ancillary grid services will go a long way in supporting and ensuring sustainable growth of the utility-level ESS in South Korea. Based on an assessment of these factors and the views of industry participants, Frost & Sullivan predicts that the South Korean utility-level ESS market will reach a size of 300 billion KRW by 2020, from a size of around 9 billion KRW in 2012.
ENQUIRY NO. 7201
28 industrial automation asia | Oct/Nov 2013
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