Different markets for storage systems In the past, the cost of storage systems was not competitive with traditional energy supply options, hence the market for storage was very limited. Numerous markets will be opened up once the cost of storage reaches parity or becomes competitive with current options available to either electricity suppliers or customers, in some peripheral markets. In some peripheral electricity markets, the cost of storage need not compete with the costs of grid supplied energy. It is sufficient to be competitive with the price of building a new grid or a capacity incease, the price of peak demand and the price of supply disruption. In these markets, the storage competes on a more level playing field with the traditional options due to capital hurdle symmetry. Supply (grid and utility) side opportunities: The storage markets on the electricity supply side are created when there is a need to increase electricity supply (with the exception of no.1 below). 1. Cost of operating peaker plants 2. Cost of building new peaker plants 3. Cost of grid upgrades to meet increased demand 4. Cost of supply interruption 5. In regions with no supply or grid, the cost of building both the grid and the power plants VS the cost of storage + wind/solar/etc VS the cost of combination of all. Peaker plants are expensive to build and run, and relatively slow to come on line. The costs of these plants are region dependent and fuel source dependent. When the cost of storage reaches parity with the cost of building and later on with the cost of running these plants, the bulk storage is likely to gain huge market share with various grids and utilities around the world. Any capacity increase solution on the supply side faces the capital investment hurdle. Whenever and wherever the need arises for supply increases, business cases will include an alternative scenario of storage system use vs building extra capacity, due to falling storage costs making storage a viable option. Economic benefits of the storage systems for various specific scenarios are quantifiable. The costs of supply capacity increases are known and vary greatly from region to region and from utility to utility. Each case will have its own economics and math. I would be surprised if storage were not already cost effective at the curent costs in some parts of the world. I see no force that can stop this dynamics in which each single utility will weigh the economics and benefits of storage against the cost of traditional options. Storage may not always prevail in these competitions, but it is likely to increasingly chip away at traditional solutions, either as a partial inclusion or as a complete substitution. Societal and environmental benefits of storage are more difficult to quantify. These also vary from region to region. It might be more valuable to have storage systems in more polluted regions. These regions might regulate for mandatory storage inclusions in some solutions. Demand (customers) side opportunities: 6. Arbitrage shifting, peak and off-peak prices 7. Differential between feed-in tariffs and grid price for net metering in some regions 8. Cost of supply interruptions, cost of diesel generators 9. Cost of supply of the most expensive grids in some regions 10. Regions with no grid, the cost of alternative energy sources + storage In most customer side markets, the requirement for capital outlay is only on the storage systems which compete with the supply from the established grid. This capital hurdle asymmetry worsens the economics of storage options and requires lower storage costs, at which storage becomes competitive with the alternative solutions available to customers. In summary, as the storage technology improvements push the cost of storage down, at some cost point the storage becomes competitive in some supply side markets listed above. Subsequent storage adoption will drive the benefits of scale and technology improvements, leading to further cost reductions, thus making storage progressively competitive with the traditional options listed above. My expectation is that the utilities and the distributors are more likely than customers to be the early adopters of storage due to more favourable economics at the same storage costs.