According to the International Energy Agency (IEA), to achieve net-zero emissions by 2030, energy storage systems will play an expanded role in maintaining flexibility in the grid as power generation gradually transitions away from gas and coal.
Back in 2021, the IEA released "Net Zero by 2050: A Roadmap for the Global Energy Sector," and later updated it in the "Net Zero Roadmap 2023 Update," in which the benchmarks for photovoltaic capacity, stationary battery capacity, and electric vehicle sales were all raised. The increase in battery storage capacity was the most notable. As the growth of solar power generation drives the demand for stationary energy storage systems, the battery capacity requirement in the updated roadmap was increased by 73% compared to that in the 2021 version.
As a result of this significant growth in demand, the global energy market has seen the fastest growth when it comes to behind-the-meter (BTM) energy storage, even though the sector currently only takes up 20-30% of the global energy storage market compared to front-the-meter (FTM) energy storage.
With its large electronics and semiconductor manufacturing industry, BTM energy storage has become a focus for Taiwan. According to Sabrina Yu, a DIGITIMES Analyst specializing in green technology, there has been growing interest in the BTM energy storage market as the FTM energy storage market experiences a slight cooldown. Currently, the BTM market in Taiwan is dominated by large electricity consumers and businesses with net-zero goals or those joining the RE100 initiative, indicated Yu.
Between 2021 and 2022, there was a general enthusiasm for FTM energy storage among market participants in Taiwan. However, by 2023, it waned in the aftermath of excessive bids submitted to Taipower - the state-owned company that's also the sole electricity provider - causing the utility provider to suspend application acceptance.
In 2021, Taiwan's Ministry of Economic Affairs implemented a clause for large electricity consumers that required users with a contract capacity of 5,000 kW or more to install renewable energy capacity equivalent to 10% of their contract capacity. Setting up energy storage facilities was one of the four options provided (the other three options being purchasing green energy, installing solar photovoltaic systems, or paying a fee). However, only 3.38% of users have chosen to install energy storage facilities, mainly due to the limited ability to use the stored energy on-site and the lack of economic incentives.
Fast forward to April 2023, Taiwan's National Science and Technology Council announced that future large electricity consumers (with contracts of 800 kW or more) in newly established industrial parks must install renewable energy capacity equivalent to 20% of their contracted capacity. On the other hand, semiconductor manufacturers must obtain 20% of their electricity consumption from renewable sources each year, reaching 100% renewable energy by 2050.
Meanwhile, according to Yu, two types of players are involved in the Taiwanese BTM market. The first category involves traditional energy-consuming industrial conglomerates that seek to diversify into green energy businesses, and the second category involves electronics companies seeking to gain a foothold in green energy, often via new business units or subsidiaries.
Taiwan Cement Corporation (TCC), a previously state-owned company that became privatized in 1954, embodies the trend in the first category. The TCC stepped into the energy storage sector in 2017 and has since built Taiwan's largest FTM 100MW energy storage system and connected it to the national grid in October 2023. Regarding BTM-related deployment, the company's energy storage systems can also serve as power backups, replacing diesel generators to reduce carbon emissions. When integrated with charging stations, it can decrease the load on the power grid during charging and reduce the required increase in contracted capacity.
Notably, TCC has independently developed the EnergyArk, an Ultra-High Performance Concrete (UHPC) energy storage container, and offers corporate clients the option to lease instead of purchasing the solution, paying only the rental fee. TCC is responsible for supervising and maintaining the system, thus reducing the initial equipment setup costs for businesses.
Delta Electronics, meanwhile, exemplifies the second category of companies: with power electronics as its core, Delta Electronics offers comprehensive energy storage solutions, including power conversion systems (PCS), battery energy storage systems (BESS), control systems, and energy management systems (EMS). Delta's energy storage systems assist businesses in responding to regulations and industry demands with applications such as peak shaving, grid support, renewable energy integration, and emergency backup power.
For BTM energy storage, Delta Electronics provides solutions for various sectors, including large industrial and commercial electricity consumers, small and medium-sized commercial offices, and microgrids. Technological challenges regarding industrial and commercial applications include energy management, frequency regulation, electric vehicle charging stations, and microgrids. For large industrial and commercial electricity consumers, Delta Electronics can offer peak shaving, optimized contracted capacity, demand response, solar self-consumption, or backup power source solutions for factory facilities.
Apart from Delta, PC maker Acer Group, through its subsidiary Smart Frequency Technology, also introduced in August 2023 its household and commercial energy storage solution, Acer Power Bar. However, it remains to be seen how it performs on the market.
Despite some optimism toward the BTM energy storage market in Taiwan, it is still necessary to incentivize end-users and drive the development of BTM storage applications through initiatives such as government subsidy programs and developing energy storage equipment leasing models.
Sabrina Yu received her Technology Management MBA from the National Tsing Hua University and a bachelor's degree in Business Administration. She has more than 10 years of research and project management experience at Taiwan-based Chung-Hua Institution for Economic Research (CIER) and AECOM. Her research areas mainly focus on Net Zero/ESG, renewable energy, energy storage, and carbon reduction technologies.