Global Thermal Energy Storage Market: Strong Emphasis of Research and Development to up Competition in Future, finds TMR

The top four manufacturers account for a lion’s share of the global thermal energy storage market making it highly consolidated. Among the top four, CALMAC held slightly over 23% of market share in 2013 on the back of installation of thermal energy storage (ice-based) storage systems having a capacity of over 500MV worldwide. CALMAC is also one of the first companies to create a mobile app for consumers of energy. CALMAC was trailed by EVAPCO, Inc., which has a range products for commercial heating, ventilating, and air conditioning (HVAC) applications. CB&I and Goss Engineering, Inc. followed EVAPCO.

Since the global thermal energy storage market is dominated by a handful of large players, brand value plays a crucial role in marketing of the products. Buying into the promise of fast growth in the market, many new players have been aiming to enter it. But EPA regulations pose an entry barrier for them. At present product differentiation is limited in the market, but with increasing thrust on research and development, competitive rivalry is slated to heat up in the near future.

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The global market for thermal energy storage is predicted to reach a value of US$1.8 bn by 2020, exhibiting a robust growth rate.

Pressing Demand for Energy to Power Robust Growth in Asia Pacific

Based on technology, sensible heat accounts for a major share of the global thermal energy storage market. Going forward, however, it would likely trim its market share to hold about 60.2% of it by 2020 as it has low storage capacity per volume of the storage media. Other reasons for its decreasing market share is the non-isothermal behavior of the material during heat storage and releasing processes and progress in other technologies such as latent heat and thermochemical storage.

North America dominates the global market for thermal energy storage in terms of market share. It is slated to hold on to its leading share in the future too. In terms of growth rate, however, Asia Pacific is predicted to expand at the maximum pace due to a burgeoning population pushing up the demand for energy, both conventional and renewable. Its market share is likely to be about 22% in by 2020.

Swift Take-up of Variable Energy Sources Pushing up Demand

An important growth in the global market for thermal energy storage is the growing uptake of variable energy sources (VES) in the power generation portfolio worldwide. “One of the common claims is that VES such as wind and solar are unreliable and intermittent in nature, and often require firming and backup to be useful in a utility system. Variable energy sources are increasingly becoming competitive with conventional energy generation technologies. The rapid rate at which they are being adopted, coupled with the goals for de-carbonization and energy security set by government across the world, propels the demand for thermal energy storage technologies globally,” explains the analyst of the TMR report.

High Initial Investment Poses a Roadblock to Market

Providing headwinds to the market is the high initial investment. Thermal energy storage technologies comprise various technologies each with a specific application, performance, and cost. Among them, the costs of phase change materials (PCMs) and thermochemical storage (TCS) are usually higher in comparison to the capacity of storage they provide. Another market deterrent is the numerous challenges to grid interconnection, which include the difficulty in creating appropriate market signals to incentivize the building of storage capacity and the provision of storage services.

This review is based on the findings of a TMR report titled “Thermal Energy Storage Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020.”

Global Thermal Energy Storage Market, by Technology

• Sensible Heat
• Latent Heat
• Thermochemical Heat

Global Thermal Energy Storage Market, by End Use Segment

• Commercial and Industrial
• Utilities
• Residential

Global Thermal Energy Storage Market, by Regional Analysis

• North America
• Europe
• Asia Pacific
• Rest of the World (RoW)

Thermochemical and PCM Technologies to Augment Scope of Thermal Energy Storage Market, says TMR

According to the report, the global market opportunity in thermal energy storage is expected to rise from US$830.8 mn in 2015 to US$1,818.8 mn by 2020. By technology, the global thermal energy storage market is expected to be led by the sensible heat segment. The segment is expected to account for 60.2% of the market by 2020. By end use, the commercial and industrial segment is expected to lead and account for 47.5% of the global thermal energy storage market by 2020. By geography, Europe is expected to lead in the market by 2020, followed by North America.

The availability of low-cost high energy density batteries is expected to pose a threat to the market. “Government initiatives and decline in the raw material prices are expected to increase the threat of substitutes in the coming years,” predicts a TMR analyst. Thus, the threat of substitutes is expected to be medium in the coming years. However, substantial product differentiation is expected to empower suppliers, increasing their profit margins.

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Need for New Distribution Systems Boosts Demand for Thermal Energy Storage

The increasing adoption of variable energy sources (VES) is one of the main growth drivers in the global thermal energy storage market. Thermal energy storage technology is also acting as an alternative or supplement for energy transmission and distribution. With the growing population, the demand for transmission and distribution infrastructure is also increasing. As the demand for energy grows, new distribution systems are required, thus driving the global thermal energy storage market.

Electric distribution utilities spend billions to upgrade their existing transmission and distribution lines every year. This trend is rapidly changing with the awareness that deploying thermal energy storage near the load can negate the need to invest in upgrading or building new transmission and distribution lines. This will further the demand for thermal energy storage technology.

Inclusion of Several Technologies Increases Cost of Thermal Energy Storage

The cost of thermal energy storage technology is high, which will deter the adoption rates. This is due to the inclusion of a number of different technologies, each of which have their own performance, application, and costs. The cost of thermal energy storage systems needs to be competitive with other non-storage options available to electric utilities. Apart from the high capital investment, the presence of several barriers for grid interconnection is also restraining the thermal energy storage market.

Players to Make Most of Advancements in Technology to Overcome Cost Barriers and Accelerate Deployment of Systems

The continuous R&D in energy storage technologies is expected to lower the high capital requirement to make this technology. The reduction in cost and advancements in technology are expected to make phase change materials (PCMs) and latent heat storage, emerging technologies in the market. Latent heat storage technologies are anticipated to have a huge potential for deployment in emerging economies. R&D initiatives in PCMs and thermochemical energy storage technologies are expected to boost their deployment, especially in Southeast Asia.

Moreover, the policy support for thermal energy storage technologies is particularly high in buildings and industrial applications. This will further accelerate the growth of the deployment of these technologies in the coming years.

The global thermal energy storage market is highly concentrated, with the top four players accounting for over 73% of the market in 2013. The remainder of the market is in the hands of small and medium regional players, Transparency Market Research (TMR) finds in a new study. Key players in the market are CALMAC, Evapco, Inc., Chicago Bridge & Iron Company (CB&I), and Gross Engineering, Inc. The significant market potential is attracting new players.

However, the creation of a brand for new players is moderately difficult to achieve in the market. Additionally, high capital investments required for providing services and manufacturing storage systems are also acting as hurdles for new entrants.

The global thermal energy storage market is segmented as follows:

Technology

• Sensible Heat
• Latent Heat
• Thermochemical Heat

End Use

• Commercial and Industrial
• Utilities
• Residential

Global Thermal Storage Market Driven by Rising Focus on Introducing Renewable Energy in Traditional Energy Mix

In a recent market research report concerning the global thermal energy storage market Transparency Market Research zeroes in on the area of latent heat storage as the one with the most lucrative growth opportunities. The report states that the global market will exhibit an exponential 16.70% CAGR from 2014 through 2020 and rise to a valuation of US$1.8 bn by 2020, from US$0.6 bn in 2013.The report is titled “Thermal Energy Storage Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2020” and is available for sale on the company’s website.

Thermal energy storage technologies refer to the various ways of storing thermal energy for later use as required, rather than at the time of the production of the energy. These technologies are therefore central to various intermittent renewable energy generation methods. Thermal energy storage also provides an effective way of making sustained use of utilizing energy that is commonly wasted in several processes and reducing the energy demands of a facility. The need for reducing greenhouse gas emissions and introducing mixed energy sources in the overall energy mix of local, regional, and global utilities is dramatically changing the global power generation and distribution scenario. This has prompted researchers and power generation companies in looking for ways of effectively storing energy coming from a variety of sources.

The report provides a clean and comprehensive picture of the major thermal energy storage technologies available at present, their applicability, and their actual use in present-day power generation and distribution networks.

For examining the market in a better manner, the market has been examined from the perspective of three broad criteria: thermal energy storage technology, end use, and geography.

On the basis of technology, the market is segmented into sensible heat, thermochemical heat, and latent heat. Sensible heat technology, which is the most commonly used thermal energy storage technology, is projected to be the leading market segment over the report’s forecast period. However, the high energy density of latent heat technology has led to an increase in the focus on the technology. Thus, the segment of latent heat technology is projected to expand at a significant pace over the forecast period.

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On the basis of end-users, the market has been segmented into utilities, commercial and industrial, and residential. The commercial and industrial sector dominated the market in 2013 owing to the exponential rise in the demand for an effective backup power supply. Nevertheless, the residential sector holds immense growth potential owing to the increased installation of renewable energy production mechanisms in households.

From a geographical standpoint, the market has been segmented into Europe, North America, Asia Pacific, and Rest of the World (RoW). Europe held the dominant position in the global thermal energy storage market in 2013 in terms of the total installation capacity.

Some of the major companies operating in the global thermal energy storage market profiled in the report are TAS Energy, Steffes Corporation, Ice Lings, Goss Engineering, Inc., FAFCO Thermal Storage Systems, EVAPCO, Inc., Chicago Bridge & Iron Company (CB&I), CALMAC, Caldwell Energy, Burns & McDonnell, BrightSource Energy, Inc., Baltimore Aircoil Company, and Abengoa Solar, S.A.

The market has been segmented as:

Global Thermal Energy Storage Market: Technology Segment

• Sensible Heat
• Latent Heat
• Thermochemical Heat

Global Thermal Energy Storage Market: End Use Segment

• Commercial and Industrial
• Utilities
• Residential

Global Thermal Energy Storage Market: Regional Analysis

• North America
• Europe
• Asia Pacific
• Rest of the World (RoW)

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