Energy Storage as a Service Market: Introduction

  • Energy storage as a service (ESaaS) is a facility to avail an energy storage system by entering into a service agreement, without buying the system. Energy storage systems deliver a wide range of services to generate revenue; create savings; and improve electricity resiliency.
  • The operation of an ESaaS system is a unique mixture of an advanced battery storage system, an energy management system, and a service contract, which can provide value to a business by providing reliable power more economically
  • For most ESaaS services, energy is stored in night time and during off-peak hours when energy is produced from non-carbon-releasing sources. This energy is then used to counterbalance the required carbon production during peak hours.

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Key Drivers of Energy Storage as a Service Market:

  • Energy storage systems are expected to become a crucial element of power management systems, due to peak demands frequently changing with time of the day and season. Energy storage as a service (ESaaS) guarantees reduction in the most expensive hours of electric demand for building owners, thereby lowering electricity bills at no cost. This drives the ESaaS market.
  • Rising attention toward and considerable investments in renewable power energy generation are driving the global energy storage as a service market. Major economies across the world are greatly focusing on developing power generation by using renewable energy sources so as to reduce their dependency on the conventional power generation through fossil fuels. Renewable energy currently holds a substantial share in the total energy production worldwide.

Back-up Power Service Segment and Utility End-user Segment to Witness Attractive Opportunities:

  • The global energy storage as a service market can be segmented in terms of system, service, end-user, and region
  • Based on system, the market can be divided into energy storage system, control and monitoring system, and service contract. The most common energy storage systems used for ESaaS are lithium-ion or flow batteries, primarily due to their size, high efficiencies, and low reaction times.
  • In terms of service, the global energy storage as a service market can be classified into demand response, back-up power, peak shaving, and others. The back-up power service segment is expected to expand at a significant pace during the forecast period. If an electricity grid experiences power outage, the ESaaS system offers a back-up power service to continue powering all or a portion of the facility.
  • Based on end-user, the market can be divided into utility and commercial & industrial. The utility segment dominated the global energy storage as a service market in 2018 and it is expected to expand at the maximum CAGR during the forecast period.

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Europe expected to hold a Major Share of Global Energy Storage as a Service Market:

  • Based on region, the global energy storage as a service market can be classified into North America, Asia Pacific, Europe, Latin America, and Middle East & Africa
  • North America dominated the global market in 2018. This trend is estimated to continue during the forecast period also. The market in the region is driven by tangible factors such as the peak load challenge in New York and other states of the U.S.
  • Utilities in countries such as the U.S. and Canada are employing energy efficiency projects and are looking forward to cutting energy generation costs. New approaches, such as pay-for-performance, are being introduced in the commercial sector in the U.S. to achieve energy efficiency at a larger scale. For example, in California, energy efficiency policies have mandated that at least 60% of the savings achieved in obligation schemes needs to be delivered by third-party service providers.
  • The market in Asia Pacific is expected to expand at the maximum CAGR during the forecast period. Asia Pacific is gradually becoming a hub for the battery energy storage system industry. Rapid industrialization and rising importance of power generation through renewable energy sources in several countries of Asia Pacific are expected to drive the market in the region during the forecast period.
  • China, India, Japan, Australia, and Indonesia are major contributors, in terms of revenue, to the energy storage as a service market in Asia Pacific

Key Players Operating in the Market:

The global energy storage as a service market is highly concentrated, with the top players accounting for approximately 40%–45% share of the market. A few of the key players operating in the global energy storage as a service market are:

  • Siemens AG
  • Spirit Energy
  • Utility Alliance Ltd

Key Developments:

  • In February 2019, Royal Dutch Shell plc agreed to acquire Sonnen, a leading player in the fields of smart energy storage systems and innovative energy services for households, expanding its offerings of residential smart energy storage and energy services
  • In September 2016, RES (Renewable Energy Systems) was awarded a four-year contract in U.K to provide frequency response services to the National Grid network with the help of a 35-MW lithium-ion battery energy storage system.

Global Energy Storage as a Service Market: Research Scope

Global Energy Storage as a Service Market, by Component

  • Energy Storage System
  • Control and Monitoring System
  • Service Contract

Global Energy Storage as a Service Market, by Service

  • Demand Response
  • Back-up Power
  • Peak Shaving
  • Others

Global Energy Storage as a Service Market, by End-user

  • Utility
  • Commercial & Industrial

This study by TMR is all-encompassing framework of the dynamics of the market. It mainly comprises critical assessment of consumers' or customers' journeys, current and emerging avenues, and strategic framework to enable CXOs take effective decisions.

Our key underpinning is the 4-Quadrant Framework EIRS that offers detailed visualization of four elements:

  • Customer Experience Maps
  • Insights and Tools based on data-driven research
  • Actionable Results to meet all the business priorities
  • Strategic Frameworks to boost the growth journey

The study strives to evaluate the current and future growth prospects, untapped avenues, factors shaping their revenue potential, and demand and consumption patterns in the global market by breaking it into region-wise assessment.

The following regional segments are covered comprehensively:

  • North America
  • Asia Pacific
  • Europe
  • Latin America
  • The Middle East and Africa

The EIRS quadrant framework in the report sums up our wide spectrum of data-driven research and advisory for CXOs to help them make better decisions for their businesses and stay as leaders.

Below is a snapshot of these quadrants.

1. Customer Experience Map

The study offers an in-depth assessment of various customers’ journeys pertinent to the market and its segments. It offers various customer impressions about the products and service use. The analysis takes a closer look at their pain points and fears across various customer touchpoints. The consultation and business intelligence solutions will help interested stakeholders, including CXOs, define customer experience maps tailored to their needs. This will help them aim at boosting customer engagement with their brands.

2. Insights and Tools

The various insights in the study are based on elaborate cycles of primary and secondary research the analysts engage with during the course of research. The analysts and expert advisors at TMR adopt industry-wide, quantitative customer insights tools and market projection methodologies to arrive at results, which makes them reliable. The study not just offers estimations and projections, but also an uncluttered evaluation of these figures on the market dynamics. These insights merge data-driven research framework with qualitative consultations for business owners, CXOs, policy makers, and investors. The insights will also help their customers overcome their fears.

3. Actionable Results

The findings presented in this study by TMR are an indispensable guide for meeting all business priorities, including mission-critical ones. The results when implemented have shown tangible benefits to business stakeholders and industry entities to boost their performance. The results are tailored to fit the individual strategic framework. The study also illustrates some of the recent case studies on solving various problems by companies they faced in their consolidation journey.

4. Strategic Frameworks

The study equips businesses and anyone interested in the market to frame broad strategic frameworks. This has become more important than ever, given the current uncertainty due to COVID-19. The study deliberates on consultations to overcome various such past disruptions and foresees new ones to boost the preparedness. The frameworks help businesses plan their strategic alignments for recovery from such disruptive trends. Further, analysts at TMR helps you break down the complex scenario and bring resiliency in uncertain times.

The report sheds light on various aspects and answers pertinent questions on the market. Some of the important ones are:

1. What can be the best investment choices for venturing into new product and service lines?

2. What value propositions should businesses aim at while making new research and development funding?

3. Which regulations will be most helpful for stakeholders to boost their supply chain network?

4. Which regions might see the demand maturing in certain segments in near future?

5. What are the some of the best cost optimization strategies with vendors that some well-entrenched players have gained success with?

6. Which are the key perspectives that the C-suite are leveraging to move businesses to new growth trajectory?

7. Which government regulations might challenge the status of key regional markets?

8. How will the emerging political and economic scenario affect opportunities in key growth areas?

9. What are some of the value-grab opportunities in various segments?

10. What will be the barrier to entry for new players in the market?

Note: Although care has been taken to maintain the highest levels of accuracy in TMR’s reports, recent market/vendor-specific changes may take time to reflect in the analysis.

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