Market Challenges And Opportunities

Global Flow Battery Market Drivers:

Rising adoption of renewable energy to drive the market growth

The importance of energy storage is rapidly increasing in the power industry majorly owing to rise in investments in renewable energy sector. The use of lithium-ion batteries is widespread, however, flow batteries have promising advantages for long-term use and in applications that need regular cycle throughout the day. With flow batteries, renewable energy such as wind and solar energy can be made accessible for longer period in order for countering major intermittency issues. These technologies are actively being evaluated by developers for their ability to offer power for longer time period and for ramping up and down with no degradation. Thus, this factor is expected to support growth of the global flow battery market over the forecast period.

Investments in aspiring wind and solar energy targets to fuel the market pace

As per the International Energy Agency, the renewable electricity capacity in the world is likely to grow by more than 60% by 2026. According to the same source, renewable energy are likely to contribute nearly 95% to the rise in global capacity of power by 2026, with solar PV being the major contributor. The number of solar photovoltaic projects installed is growing all over the world rapidly owing to growing investments in the renewable energy sector. Thus, this factor is further anticipated to boost growth of the global flow battery market over the forecast period.

Global Flow Battery Market Opportunities:

Increasing development of advanced and novel flow battery chemistries to create ample of opportunities in the global flow battery market over the forecast period. The flow battery market is on the rise constantly, due to which several companies and researchers from around the world are focusing on development and investment in novel battery chemistries for the flow battery in terms of higher power density and low cost. For instance, in January 2021, scientists from the University of Burgos in Spain, the University of West Bohemia Pilsen in Czechia, the University of Padua in Italy, and the Basque Research and Technology Alliance (BRTA) performed a detail analysis of all hybrid redox flow batteries and redox flow batteries. Such development activities are anticipated to create growth opportunities in the market over the forecast future.

Growing residential applications of flow batteries are expected to offer multiple growth opportunities. The adoption of solar PV systems in residential applications has been growing significantly in past few years, owing to their capability of reducing electricity cost and greenhouse gas emissions. However, solar PV systems are sometimes unsuitable for grid integration due to the unpredicted fluctuations in the harvested solar energy occurring due to intermittent nature of solar irradiance. The battery energy storage system is an alternative to solar PV systems. Flow batteries offer maximum energy storing, prevent blackouts, and reduce energy cost for homes and small businesses. Thus, the use of flow batteries is growing in residential applications and it is likely to create growth opportunities in the market.

Global Flow Battery Market Restraints:

Decline in cost and rise in adoption of lithium-ion batteries to impede the market growth

Lithium-ion batteries and flow batteries offer renewable energy storage solutions. The use of both types of batteries offers more efficient demand management, which results in lower charges of utility and lower peak electrical demand. The major differences between lithium-ion batteries and flow batteries are power density, cost, and space efficiency. Thus, the demand for lithium-ion batteries is increasing, which in turn is expected to hinder growth of the global flow battery market over the forecast period. However, with increasing developments in flow battery technology, the market is likely to gain substantial growth in the near future.

Need for high capital investment for flow battery production to hamper the market growth

Flow batteries have become a promising alternative for traditional batteries including lead-acid battery, lithium-ion battery, and sodium-based battery. However, the initial investment required for manufacturing of these flow batteries is high. The overall cost includes material, component, installation, maintenance and repair cost. This can an extensive investment for SMES. Thus, this factor is expected to hinder growth of the global flow battery market in the coming future.