Transforma Insights’ recent report, 'Connected Batteries: 180 million battery devices driven by falling costs and growth in renewable energy’ estimates that by 2032, the number of connected batteries will exceed 180 million, with a CAGR of more than 30%, and Greater China, Europe, and North America will be the largest markets.
This blog focuses on different types of Connected Batteries based on their usage, the uses of connected batteries, the reasons that are driving the adoption of these batteries, and their scope across developing economies.
The size of connected batteries varies greatly, and depending on the size, they can be classified into four different types: grid-scale batteries, microgrids, in-building batteries, and portable batteries.
Grid-scale batteries are typically used by utilities to meet smaller-scale grid energy storage requirements. They allow power system operators and utilities to store energy for future use. These batteries collect and store energy from a grid or a power plant, and then, this stored energy can then be discharged at a later time to provide electricity or other essential grid services when needed. These are typically the largest in size and often share their form factor with shipping containers for transportation.
Comparatively, microgrids are smaller in size and are used to power commercial facilities such as manufacturing plants and chemical factories, or smaller businesses and homes.
In-building Connected Batteries are connected to microgenerators (such as solar panels and heat pumps), and store energy to reduce reliance on grid electricity. These batteries can be charged using both renewable energy sources and through electricity provided by the grid. They are a key component of self-powered buildings that store excess solar energy and use it at night. For example, Telsa Powerwall is a compact home battery that reduces reliance on the grid by storing solar energy.
These batteries serve a variety of use cases. They can be as small as a mobile phone and can be used for charging or powering small electrical household equipment. In more advanced cases, portable batteries with capacities of up to 1,000Wh can be used for charging AC inverters and portable refrigerators. These batteries have gained significant prominence in African and Asian countries that lack reliable electricity supply.
The use-case and application of Connected Batteries vary broadly from grid-scale storage to household energy storage devices. The onboard connection on these batteries can be used to communicate with smart meters and other grid infrastructure to enable features such as load balancing. It can also be used to communicate with the user’s smartphone to provide updates on battery power and energy dependency, especially for in-building and portable batteries.
This section of the blog explores the major reasons that are driving the growing adoption of batteries.
The falling cost of batteries at least over the last three decades has been one of the primary factors, leading to their increased adoption. Case in point, while a battery with a capacity of 1 kilowatt-hour (kWh) costed around USD7,500 in 1991, it was available for USD181 in 2018. Lithium batteries continue to be one of the key solutions for all use cases, from utility-scale storage to portable batteries, and their cost has declined by 97% in the last thirty years.
In addition to the cost, new features have been added to the connected batteries, which have also played an instrumental role in their adoption. For instance, many connected batteries are able to monitor and report about the overall health of the battery, which provides valuable insights about when they may have to be replaced. Besides, these batteries can regulate their charging processes as well, which maximises their lifespan and avoids issues like overcharging.
Despite governmental pressure, the integration of renewable energy sources into most power grids remains limited. For example, in 2021, wind and solar energy accounted for only 7% and 4% respectively of the global electricity generation. This limited penetration is primarily attributed to the variable and intermittent nature of renewables, which presents a challenge for grid operators in balancing supply and demand. Energy storage emerges as a key solution to this challenge, as it enables surplus energy to be stored for later use, ensuring a reliable energy supply despite fluctuations inherent in renewable sources.
The use of Connected Batteries is not only restricted to developed economies such as North America, Europe, and China. The applications have gained prominence in developing nations as well, including countries in Asia and Africa. Some of the prominent portable battery vendors such as M-Kopa, Azuri Technologies, d.light, and Fenix International provide portable battery rental and leasing solutions based on the pay-as-you-go model, which is a three-step process of charging the battery at a hub, distributing the batteries to the user, and ensuring timely return of the batteries. Most of these batteries come in varies sizes and forms and are used to address essential electricity needs or use-cases such as charging phones, laptops, lightning electricity bulbs and fans.
In the overall market, there are several applications of Connected Batteries, ranging from Grid-scale usage (like utility providers) to commercial purposes such as school campuses, stadiums, and offices. Their use cases can range from charging a phone or lighting a bulb to powering the roof-top solar or dealing with short-term power spikes and avoiding power outages. The demand and the variety of these devices have increased, with the growing number of vendors offering these solutions such as Tesla Megapacks, Schneider Electrics’ ‘Home’, Yoshino, and Bluetti.
