The Impact of the Top 3 Strategic Imperatives on the Mechanical Energy Storage (MES) Technology Industry

TRANSFORMATIVE MEGA TRENDS

Why:

• The global focus on achieving net-zero carbon emission targets has increased the proliferation of renewable energy technologies.
• However, most renewable energy systems supply power intermittently, which may lead to challenges such as security of supply and grid destabilization.
• Energy storage is a necessary component of renewable power plants to ensure that excess electricity is stored and can be used during a shortage of supply.

Frost Perspective:

• MES solutions can play a vital role in supporting the growth of renewables, especially utility-scale renewables.
• Pumped-hydro storage (PHS) is still the most dominant form of energy storage and will continue to play a critical role in energy systems in the coming years.
• Many MES solutions can store energy for months and, thus, facilitate seasonal storage.
• The emergence of smaller MES systems, such as compressed air energy storage (CAES) and liquid air energy storage (LAES), can allow industrial customers to effectively manage energy demand.

DISRUPTIVE TECHNOLOGIES

Why:

• Modern energy systems are complex, with myriad renewable energy sources connected to a grid.
• A growing number of distributed energy systems and microgrids have increased the need for effective storage solutions that can be installed on-premise and provide grid ancillary services.
• While PHS use is limited by geography, its large storage capacity and duration can allow industrial customers to effectively manage energy demand.

Frost Perspective:

• Several emerging technologies can overcome the geographical limitations associated with PHS.
• New solutions are emerging which can fundamentally change the energy storage industry.
• CAES and GES stand out in this regard due to their low footprint and construction time.
• Their high scalability can support the distributed grid or microgrid. Their high scalability supports on-site storage for commercial and industrial applications.

GEOPOLITICAL CHAOS

Why:

• Current geopolitical challenges such as war in Europe have created significant supply chain challenges for batteries.
• Due to this, there are high price fluctuations associated with battery materials.
• Batteries also face limitations in terms of storage duration and operating life.

Frost Perspective:

• MES systems typically use proven technologies.
• These systems are conceptually mature and, therefore, highly reliable.
• Their extremely long life ensures protection from raw material price swings.
• These systems also use low-cost, widely available raw materials, ensuring uninterrupted supply.

Scope of Analysis

• The threat of climate change, the announcement of net-zero emission targets, and the declining cost of components have significantly brought down renewable energy (RE) costs. This has spurred the penetration of RE technologies in the global energy mix. According to the International Energy Agency (IEA), the total electricity generation from non-biological RE sources reached 30% in 2022. With such a vast share in the global electricity mix, the demand for energy storage technologies is increasing at an exponential rate, and so are concerns regarding grid stability, power quality, and reliability.
• MES technologies are ideally placed to meet this demand. A defining feature of most MES systems is their long storage duration and long life. This makes them more suitable for grid-scale energy management solutions. MES technologies are also being deployed to provide stability to the grid and provide a range of ancillary services.
• This study focuses on key MES technologies, highlighting their main attributes. It also covers major application areas of MES systems and provides a comparative analysis against competing storage solutions. The latest disruptive technologies in this area have also been covered.
• The report covers drivers and restraints for MES solutions based on their short-term, medium-term, and long-term impact on the power sector.
• The study provides a landscape of patents, innovations, and key players across the MES industry. In addition, the report covers the unique growth opportunities offered by the growing penetration of MES systems.

Segmentation

Mechanical Energy Storage (MES)

Gravitational/Potential Energy Storage

• Pumped-hydro Storage (PHS)
• Gravity Energy Storage (GES)

Kinetic Energy Storage

• Flywheel Energy Storage (FES)

Thermo-mechanical Energy Storage (Thermo-MES)

• Compressed Air Energy Storage (CAES)
• Liquid Air Energy Storage (LAES)

Growth Drivers

• The role of renewable energy technologies has become increasingly important across the globe. This is driven by an urgent need to mitigate human-induced climate change and minimize the use of fossil fuels. This unprecedented growth in the clean energy sector has boosted the deployment of long-duration energy storage systems, particularly in the MES segments.
• MES technologies can provide critical energy management services to industrial and utility consumers. These services include load shifting, energy arbitrage, and peak shaving. Renewable integration into the grid has made electricity prices more volatile. As a result, large energy consumers have more incentive to deploy these systems, which is driving MES technology adoption.
• MES systems are inherently safer to operate than battery storage. Depending on the intended application, this has the potential to save customers significant costs. With the advent of low-capacity MES systems and the near commercialization of emerging MES technologies, these storage systems are being considered as a viable alternative to batteries.

Growth Restraints

• Large-scale MES solutions, especially PHS, suffer from location challenges. At present, there are limited sites available for the rapid expansion of PHS systems. Furthermore, concerns regarding the environmental impact of such large-scale projects also make obtaining governmental clearances difficult.
• One of the major restraints of MES solutions is their high upfront cost. Despite offering a long operating life and high reliability, there are significant costs associated with site development, equipment procurement, installation, and clearance.