Emerging Business Models in the Global ESS Market, 2017

Transformational New Business Models Focussing on Integrated Distributed Energy Storage Systems

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Distributed energy resources and distributed energy storage systems (ESS) are changing the face of power generation and distribution in the Organisation for Economic Co-operation and Development (OECD) countries. To tap these new market opportunities, consumers need to be properly supported with financing options for ESS installations.

The study seeks to bring out the new and emerging business models in the global energy storage systems market. It estimates the total global installed capacity for ESS and provides a detailed discussion of about eight business models across three ESS segments: grid scale, residential, and community-level energy storage systems. The base year for the study is 2017. Implications of the emerging models are analysed. Whilst a limited number of business models are expected in grid-scale ESS applications, majority of them are expected to be adopted in behind-the-meter and community-scale ESS installations.

The top five countries that have adopted new business models in the ESS market are Germany, United States, Japan, United Kingdom, and France. Amongst these, Germany has tested and implemented several new business models in the residential and community sector. The US has followed suit with models in both utility-scale and residential applications. Japan has already trial tested several of these models in four of its smart city projects (that were concluded in 2014). UK and France are keen on developing residential-scale ESS models and ESS aggregation models.

Battery energy storage systems are the most widely used energy storage technology in these countries, and the new business models are used on this technology. Lithium ion is the most accepted battery chemistry.

The major drivers that encourage these models are supportive smart technologies and emergence of prosumers with renewable energy (RE) generation resources of their own. A secondary revenue stream sprouting from the use of an existing ESS asset encourages these private parties to adopt new business models.

However, the key challenge stems from the uncertainty with regard to the payback period when an ESS is installed for these new business models. As the trial projects are concluded, a clear outlook for these models can be arrived at. This is expected to increase their market demand.

Consolidations and partnerships across the ESS and energy value chain can be expected as part of the formation of new financial models amongst the relevant stakeholders (such as battery original equipment manufacturers (OEMs), power utilities, RE project developers, battery management software developers, aggregators, and demand response companies).

Table of Contents

1. Executive Summary
Key Findings
2. Introduction
Key Segmentation*
Energy Storage System Applications
Research Aim and Objectives
3. Market Overview
Distributed Power Generation and ESS—Key Trends
ESS Business Model Innovation—Key Drivers
ESS Business Model Innovation—Key Challenges
Installed Capacity Forecast by Region
4. ESS Business Models—An Overview
ESS Business Model Developments
Emerging ESS Business Models by Geography
5. Growth Opportunities and Companies to Action
Utility-scale ESS—Emerging Business Models as Growth Opportunities
Growth Opportunity 1—TSO/DSO-owned Asset Model
Growth Opportunity 2—Shared Assets Model
Growth Opportunity 3—Third-party-owned Asset Model
Best Practices–Regions and Utilities Adopting the Third-party-owned Asset Model
Behind-the-Meter ESS—Emerging Business Models as Growth Opportunities
Growth Opportunity 4—VPP Model 1–Demand Response (DR) Aggregator Model
Growth Opportunity 4—Regional Highlights and Developments
Growth Opportunity 5—VPP Model 2–Generation Company (GENCO) Aggregator Model
Growth Opportunity 6—Technologies/Service Provider Model–Battery Leasing Model
Growth Opportunity 6—Residential ESS Trends in Developing Nations
Community Storage System—Emerging Business Models as Growth Opportunities
Growth Opportunity 7—Community Energy Trading Model
Growth Opportunity 7—Regional Highlights and Developments
Growth Opportunity 8—District Storage Model
Strategic Imperatives for Success and Growth
6. Other Trends Affecting the ESS Value Chain
ESS Trends–Solar + ESS Packages
ESS Trends–Battery Second Life
Battery Second Life–Regional Highlights and Developments
7. Conclusions
Key Stakeholder Analysis
Implications and Opportunities
Legal Disclaimer
8. Appendix
Energy Storage Systems Definition
Associated Research and Multimedia
9. The Frost & Sullivan Story


List of Figures & Charts

1. ESS Business Models: Drivers for Innovation, Global, 2017
2. ESS Business Models: Challenges for Innovation, Global, 2017
3. ESS Business Models: Emerging Models and Trends Across the Energy Value Chain, Global, 2017
4. ESS Business Models: ESS for Ancillary Services Business Models, Global, 2000–2030
5. ESS Business Models: DR Aggregator Model, Regional Highlights, Global, 2017
6. ESS Trends: Battery Second Life, Regional Highlights, Global, 2017


1. ESS Business Models: Key Countries Experiencing Changes, Global, 2017
2. Total ESS Market: Geographic Segmentation Of Installed Capacity By Technology, Global, 2017
3. ESS Business Models: Key Countries Experiencing Changes, Global, 2017



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