April 3 (Renewables Now) - The measures to limit the spread of the novel coronavirus and the pandemic's impact on the economy could reduce Wood Mackenzie’s forecast for global energy storage capacity deployments this year by 19%, or roughly 3 GWh.
Such a revision of the forecast will be necessary if the movement of goods and people remains restricted in the second quarter, alongside an economic downturn, the market research company said Wednesday.
Even with this decrease, annual installations will still be at a record level of 12.6 GWh. In 2019 and 2018 the global energy storage market stood at 5.3 GWh and 6.2 GWh, respectively.
“For large scale projects, particularly in markets where energy storage is predominantly a merchant play, financiers’ appetite for this type of asset is already being reduced. Final project investment decisions will be pushed further out to when market conditions make the risk-return-ratio for this asset class more palatable,” said WoodMac Principal Analyst Rory McCarthy. He notes, however, that interest rates are on the slide, which is good news for financially borderline projects.
Demand for residential energy storage, considered a luxury investment, is also expected to decline, WoodMac noted.
Over the next five years, the company expects the global energy storage market to grow 13-fold, reaching 230 GWh by 2025. China, Australia and the US will be the biggest markets will annual installations in the gigawatts.