Pike Research: total capacity of worldwide spinning reserves for the grid to increase 40% by 2022
9 November 2012
Spinning reserves are power generation or storage assets that can come online quickly to serve as bridge power for the grid to maintain system frequency stability during emergency operating conditions and unforeseen load swings. A recent report from Pike Research forecasts that the total capacity of worldwide spinning reserves for the grid—including traditional generation assets and energy storage technologies—will rise by 40% by 2022. For the report, energy storage technologies include pumped storage, compressed air energy storage (CAES), and advanced batteries.
Market conditions affecting the technical need for spinning reserves include increased volatility in load and/or generation; the ability of the grid operator or vertically integrated utility to accurately forecast sharp increases in load or significant decreases in generation; and the ability of a grid operator or vertically integrated utility to call upon resources from interconnected systems.
Drivers that influence the technology mix of assets include the generation asset mix and factors that affect the mix (e.g., government policies); business models that bundle spinning reserves with another more high-value application; and fuel prices.
The capacity of spinning reserve systems will grow steadily over the coming decade, as will their value, according to the report Spinning Reserves for the Grid.
In terms of revenue, the global spinning reserves market will more than double in size during that period, from $261 million in 2012 to $578 million by 2022.
The traditional technologies that deliver spinning reserves, including all types of dispatchable power plants, are mature and well-understood. However, energy storage technologies, including pumped storage and newer forms of energy storage, are playing a larger role in this market. As markets begin to differentiate between technologies, such as with pay-for-performance regulations, energy storage technologies will gain market share in the spinning reserves market.—research analyst Anissa Dehamna
By 2022, natural gas and coal plants will still account for 93% of total spinning reserves capacity, but energy storage will grow to 7% of capacity in the same time frame, according to the report. Of particular interest to grid operators are advances in battery technology, particularly lithium-ion (Li-ion) batteries. Li-ion batteries can achieve up to 95% efficiency, but they remain relatively expensive compared to other forms of energy storage. Impressive economies of scale could reduce the cost of Li-ion for grid applications.
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