At the time of writing this article, the COVID-19 pandemic still had a firm grip on the world with no reliable and widespread cure within reach. And while there will be a day when this crisis is resolved, its impact on global economies and industries will likely still be felt for a long time after the virus is under control and life has returned to (the next) normal.
The energy storage industry is no exception. But what is the actual impact of COVID-19 on the market, in particular, in the longer-term? And how should energy storage players adapt to weather the pandemic’s effects or become even more successful?
In this two-part article, based on work carried out by my company, Apricum, an international cleantech advisory and consultancy group, I will provide the bigger picture of “energy storage vs the virus” by examining its impact on the fundamental market drivers and outlining the key mindset and behavioural shifts that we expect to see in a post-pandemic world.
A quick recap: Where we are currently
Like all industries, the energy storage business is significantly impacted by the pandemic due to site access problems and difficulties to get permissions in times of lock downs as well as a general economic downturn. This will certainly affect activity in 2020.
However, we are not aware of any larger scale project under construction that has been cancelled or delayed for a longer period. Quite the opposite, grid battery contracts of impressive size have been announced over the last few months, like Southern California Edison’s (SCE) 770MW storage procurement in May, one of the largest ever seen. Temporary slowdowns in the execution will typically not lead to an abandonment of a large grid battery project given the often multi-year development cycles. Moreover, if utility-scale energy storage qualifies as “critical infrastructure” site access is granted even in times of a lockdown, as seen, for example, in California and Italy.
Behind-the-meter storage companies in general are likely to feel a stronger impact, though: Many commercial and industrial (C&I) customers will have to cut back on investments outside their core business, so the purchasing of an energy storage system might be considered non-essential for the time being. In the same spirit, homeowners might want to defer major household spending to 2021 and beyond.
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