The global energy storage system (ESS) market will grow by about 40 percent this year but the Korean ESS market will suffer a contraction, a research report forecasts.
In 2019, the global ESS battery market is expected to grow to 16 GWh, up 38 percent from 11.6 GWh in the previous year, market researcher SNE Research estimated in its report on the ESS market and lithium-ion batteries.
“The North American, European and Japanese markets will grow, offsetting the negative growth of the Korean market,” SNE Research said, adding, “By application, the ESS market for power generation will grow most."
In the United States, a large-scale ESS project is underway and a bill to apply the federal investment tax credit (ITC) given to projects integrating solar power with an ESS to stand-alone ESS projects or ESS projects connected with other renewable energy sources. Europe, Japan and China are also actively promoting the ESS industry at the national level.
The report forecast that the global ESS market would reach 23.7 GWh in 2020, 86.9 GWh in 2025, and 179.7 GWh, 15 times the current level, in 2030. But the Korean ESS market, which led the early ESS market, would stay at 3.7 GWh this year, which is 30 percent lower than 5.6 GWh in 2018, due to a recent spate of fire incidents.
But some experts in the ESS industry say that a 30 percent reduction would be an optimistic estimate. "As an investigation into the causes of fires is still underway and the establishment of safety standards has been delayed, we expect our ESS business to slump this year," an anonymous ESS industry official said. The official was concerned that the government's failure to come up with measures against ESS fires will result in Korea losing another high-growth industry to China.
About 20 ESS fire accidents occurred in Korea from August 2017 to the end of last year. The first ESS fire took place at a power substation in Gochang, North Jeolla Province in August 2017. The government has been looking into ESS fires since it recommended the suspension of ESS operations at the end of last year. The government launched a joint private-public investigation committee to determine the causes of the ESS fires early this year, and is planning to announce the results of the investigation and countermeasures in June. However, the Korean ESS industry criticized the government for its failure to prevent the ESS industry ecosystem from falling apart.
In fact, on May 23, China's leading electric car company BYD signed an agreement with STX, a general trading company, on distribution of its ESS products in Korea. As BYD used lithium iron phosphate batteries instead of lithium-ion batteries, BYD batteries have a lower fire risk, STX said.