Electricity consumers including residential, commercial, and industrial players face frequent issues with power reliability including blackouts, power frequency regulation, and peak capacity deferral. Behind-the-Meter battery systems can help address these issues by storing energy that is generated locally and supplying it as per requirement. The excess energy can also be sent to the grid as well. They are connected behind the utility meters in these localized settings such as residential apartments, commercial settings such as data centers, and in small-scale industrial settings along with solar PV systems. The overall aim of these batteries is to save electricity bills for the customers.
Globally, around 7 GW of BTM battery storage had been installed until 2020 and the installation is expected to rise significantly to meet the net-zero emissions scenario by 2050. The market for BTM batteries was worth $4.71 billion in 2020 and is expected to grow at more than 6% over the coming decade. Startups in this market provide smart battery solutions which include the batteries along with smart AI-based software solutions to track the energy capacities, and grid demands and maintain the supply through the batteries. A number of these startups have been acquired by larger players in the energy ecosystem.
Lithium vs other chemistries:
BTM batteries need to have faster discharge durations of a few minutes to a couple of hours. For residential units, these batteries need to have a capacity of up to 3 KW while commercial and industrial units can go up to 5 MW. The batteries need to have higher life cycles of up to 10,000.
Lead-acid and lithium-ion batteries currently dominate the market for BTM applications. They are mature technologies and have established economies of scale and supply chain networks across the globe. Several chemistries for lithium-ion are available including the highly used Nickel Manganese Cobalt (NMC) and Lithium-Ion Phosphate (LFP) as well as the Lithium Titanium Oxide (LTO) battery.
This has paved the way for alternate battery chemistries to be used for BTM energy storage. Among the alternatives, redox flow batteries based on vanadium and zinc bromide are promising due to their large life cycles and high safety. Other examples include aqueous zinc and zinc gel which pack high power densities and thus are able to discharge faster.
Ankur View:
Behind-the-Meter battery market is at a very nascent stage and is currently dominated by lead-acid and lithium-ion batteries. These battery systems are generally purchased by households and small and medium companies along with solar PV systems. However, the high lifetime cost of these batteries coupled with safety concerns has put other alternate batteries into the limelight. As the market develops over the next decade, there will be a requirement for batteries with higher life cycles, faster discharge rates, and lower costs. Redox flow batteries based on vanadium and zinc with higher power outputs and life cycles and other zinc-based batteries such as zinc gel will find use cases in the market such as for EV charging, commercial data centers, and other localized residential settings. These batteries have their own set of challenges which include higher upfront costs and low efficiencies which will need to be circumvented to capture the growing market opportunities.
