The Alternative Storage Solution: Off the Grid

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"Off-the-grid storage stations are forming an intermediary market."

GigaOm, Katie Fehrenbacher

When utilities move at a snail's pace when it comes to buying grid-tied batteries, where can an energy storage developer turn?: The decidely non-power-grid-connected "off grid market." That's according to a report put out this morning from Lux Research.

Analysts with Lux say that applications such as cell phone base stations, data centers, and pop-up military bases—disconnected from the power grid and often times in remote locations—are an intermediary market that energy storage companies should tap as the EV and grid-storage markets slowly develop. Lux says that the off-grid storage market will grow 6% over the next five years, from a size of $9.9B in 2011 to $13.5B in 2016, and newer technologies like fuel cells, fly wheels, advanced batteries and ultracapacitors will have solid chances of scoring in this market.

For data centers, energy storage technologies are used as an uninterruptible backup power supply (UPS), which provide continuous power if the grid fails. Currently UPS services often rely on large blocks of lead acid batteries or generators, but flywheels and ultracapacitors could score 10% of the datacenter UPS market by 2016, says Lux. Lithium ion batteries could carve out another 6.8% of the UPS market. The amount of data centers will only grow throughout the world as more and more devices and people get connected.

Eventually the grid-tied energy storage market will break out, and the folks at the Electric Power Research Institute (EPRI) peg 2012 as a turning point because by then, companies that have collectively received more than $250M in federal stimulus funding are expected to complete research and development work and move into field trial stages in the U.S. Electric vehicles are also supposed to one day become more mainstream, but will take years to reach any kind of mass adoption.

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