the addressable market for utility energy storage could scale to $800 billion - energy storage solutions

Sam Korus, Ark analyst IndustrialElon Musk, said Tesla (NASDAQ:TSLA)
In the long run, the energy storage business will be as big as its car business.
Ark's research shows that the planned natural gas peaker plant, as well as replacing them with utility-scale energy storage, can generate about $10 billion a year, which is $1 for Tesla.
In 2018, utility energy storage revenue was 5 billion.
As battery costs continue to decline over the next five to ten years, the global addressable market for utility energy storage will expand to $800 billion.
In last July, PG & E, a California utility, proposed four energy storage projects to replace the natural gas plant in South Bay.
Two of these projects are the largest utility energy storage project ever.
1, 200MWh and 730MWh-
Tesla's 129MWh battery in Australia has broken its current record.
As the cost of the battery continues to decline, utility energy storage will begin to compete with the existing natural gas peaker plant to reach a price point, which will prompt utilities to close the underutilized plant.
The chart below compares the power cost of the natural gas peaker plant to the power cost of the battery
Two scenarios are highlighted based on energy storage.
The brown circle illustrates the scenario we are facing today: the average time spent using natural gas peaker plants in the United States is about 10%S.
Resulting in a level electricity bill of about $0. 14/kWh.
The red line shows the Ark's forecast: Utility energy storage battery costs will drop from $400/kWh to $150/kWh over the next five years, resulting in a electricity bill of about $0.
09/kWh, significantly reducing the cost of natural gas plants operating in a period of 25% or less.
Energy storage solutions should be able to increase competition for all peaker plants in the future.
Economically, battery solutions are already competing with new gas plants.
As the drop in battery costs will offset the increase in capacity, the addressable market in the USS.
Should stay around $10.
12 billion per year, as shown below.
In the future, underutilized power generation is likely to be replaced by batteries.
As shown below, the average utilization rate of natural gas plants in the United StatesS.
About 55%, the utilization rate of many plants is less than 25%.
The work of the Ark shows that in the United States, replacing all these plants will be a $83 billion energy storage opportunity. S.
Opportunities of $800 billion worldwide.
As shown in Figure 2, 5,000-
Storage capacity of all underutilized facilities will reach gigawatt hours
Whether it's natural gas, coal or liquid power-
All over the world.
In addition, if the cost of the battery continues to be lower than $150 per kilowatt hour, the scale of the addressable market will be much larger than $800 billion.
While many people are familiar with Tesla's success in energy storage in South Australia, few analysts see any value in this part of the business.
One explanation is that most of the analysts reporting on Tesla are either traditional car analysts or inexperienced technical analysts in utilities.
Another reason is that due to the difference in geography and energy, the change of electricity price, the analysis of fixed energy storage is very complicated;
The supervision and business model of the company are different;
There are significant differences between residential use cases and utility scale use cases.
In addition, lithium-
In the long run, Ion batteries may not be the best energy storage technology, and the entry threshold is low and can be commercialized.
Nevertheless, ARK Research shows that these are all early, and the total addressable market for utility energy storage may be close to $1 trillion in the next 10 to 20 years.
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