Companies Mentioned: Balqon Corporation (OTCBB: BLQN), A123 Systems Inc. (NASDAQ: AONE) and EnerSys (NYSE: ENS).
When most people think of batteries, cellular phones or car batteries are the first things that come to mind. Most consumer-end batteries are below 100 watt-hours, while most car batteries produce about 500 watts worth of power. But the real story in energy storage is in the burgeoning market for battery systems capable of storing upwards of 10 kilowatts.
These large-scale energy storage technologies are used to power or backup everything from cellular towers to university campuses to solar farms. By charging batteries during non-peak hours and utilizing the batteries during peak hours, these installations can help dramatically lower costs for operators, while they also provide valuable storage for alternative energy farms.
Enormous Market Opportunities
The U.S. energy storage market surpassed $3 billion in 2011 and is expected to exceed $5 billion by 2014, according to new estimates released by Climate Change Business Journal (CCBJ). While the majority of demand is from variable energy sources, like wind and solar power, usage is growing in cellular towers and other industries traditionally using diesel generators.
Some potential popular uses include:
- Alternative Energy Storage – Many alternative energy technologies generate electricity sporadically, which makes them difficult to effectively connect to a grid. Batteries can help store and smooth out electricity generation in these applications.
- Telecommunications – Cellular towers are required to have backup capabilities to maintain uptime, but many towers utilize old-fashioned lead acid batteries or even diesel generators. New batteries can dramatically improve these economics.
- Commercial Buildings – Commercial buildings can save money by charging batteries during off-peak hours and then using battery power during peak hours. As an added benefit, this process stabilizes demand on electricity grids.
- Oil & Gas Wells – Many oil and gas wells utilize diesel generators in order to operate pumps or at least serve as a backup. Batteries could be used to replace these costly systems in order to save money and meet environmental standards.
Growing Market for Companies
Given these growth catalysts, many public companies are beginning to develop battery technologies within this industry. For instance, electric vehicle manufacturer Balqon Corporation (OTCBB: BLQN) quietly announced in its latest 10-K that they have already developed and shipped solutions in energy storage markets include telecom and commercial buildings.
Recently, Balqon announced that it has installed a 1MW hour lithium battery storage system at the University of California Riverside that will be used to power the Bourns College of Engineering building. Balqon will be contributing more to this $2 Million award over the next couple years. This project has also paved the way for the company to enter other markets ranging from alternative energies to cellular towers.
Many Opportunities for Investors
From Balqon Corporation (OTCBB: BLQN) to battery stocks like A123 Systems Inc. (NASDAQ: AONE) and EnerSys (NYSE: ENS), there are many opportunities for investors to play the growth in the energy storage market.