Analysis report on the causes of overcapacity in the energy storage industry

Does overcapacity exist in the PV industry?

Wang and Luo (2018) find that not only holistic overcapacity but also structural overcapacity exists in the PV industry, indicating that capacity in high-end industries is insufficient and excessive in mid- to low-end industries. Overcapacity can hinder the orderly development of renewable energy (Río and Janeiro, 2016).

Which industries report overcapacity?

Estimated results for capacity utilization ratio. The results indicate that all wind, PV, and biomass industries report overcapacity. The degree of overcapacity for the PV industry is the most serious, while that for the biomass industry is the lowest.

Is excessive energy storage a problem?

Spyros Foteinis highlights the acknowledged problem that an insufficient capacity to store energy can result in generated renewable energy being wasted (Nature 632, 29; 2024). But the risks for power-system security of the converse problem — excessive energy storage — have been mostly overlooked.

What is overcapacity in three energy system configurations?

Overcapacity in the three energy system configurations (deterministic, robust, worst-case): theoretical potential for electricity production vs. actual electricity production. Model is run n runs = 10000 times sampling parameters from the entire uncertainty range, reported in Table 3.

Why is energy storage oversupply a problem?

The expansion is driven mainly by local governments and lacks coordination with new energy stations and the power grid. In some regions, a considerable storage oversupply could lead to conflicts in power-dispatch strategies across timescales and jurisdictions, increasing the risk of system instability and large-scale blackouts.

What causes overcapacity?

Along with other factors - such as the fear of power shortages and the lack of appropriate coordination of government policies - our analysis suggests that errors in forecasts of electricity demand and fuel prices significantly contributed to generating such overcapacity.