Table 11.

Potential markets in the electricity sector.

Potential markets	Market description	Market outlook
Control Reserves	A very important development is the emergence of a market for control reserves, where stored short-term energy can be made available to stabilize the grid (Regelleistung.net, 2016), which is an essential element of power security (Boroojeni et al., 2016). This market is currently dominated by fossil power plants that ensure the functioning of grid balancing through large synchronal generators. In the context of the German electricity market liberalization, this function is being progressively decoupled from power plants, allowing new market entrants to offer balancing services. Liberalization of grid balancing created a market for control reservesa (Bundesnetzagentur (2011), in which HSF could participate. However, the regulatory framework underpinning this market is being shaped by political interests and important lobbies, and is currently evolving in an unfavorable direction for HSF.	Experts argue that the regulatory framework is strongly being shaped by political interests and important lobbies (including the battery lobby). The current regulatory framework is rather unfavorable to the features of HSF (Regelleistung.net, 2016) (hence the importance of R&D for high performance HSF). Furthermore, conventional LSF might suffice. Therefore, while the market for control reserve is being defined by politics in Germany, technological competition appears tremendously high and the unfavorable regulatory framework creates important uncertainties.
Island network stabilization	In island networks (in the insular context or in locations without grid connection, e.g. tests on islands in Alaska, the UK, and Greece), integration of intermittent renewable energy poses an additional difficulty (Schaede et al., 2015). In this context, storage is used to compensate for the fluctuation of intermittent renewable energy sources when those exceed about 30–40%. Below that level, diesel generators suffice to stabilize the island grid. Storage can thus allow an increase in the penetration of renewables in such grids, which is particularly interesting for remote grids where diesel supply is costly.	This market is potentially very large, considering the number of island networks. However, a difficulty might be that each island grid has different characteristics and therefore sales can only be done on a case-by-case basis, which significantly increases marketing costs and, unless a standard solution is found, reduces its commercial attractiveness.
Uninterrupted power supply (UPS)	The global UPS market is mature but still expected to grow strongly (Lauwigi and Vogt, 2013). It is dominated by a handful of international firms, among which one player uses LSF as cold-start for diesel generators to provide uninterrupted power to critical infrastructures, such as data centers, hospitals, or airports. In addition to critical infrastructures, UPS are also used in countries where grid quality is poor.	This still growing market is estimated to be worth over five billion euros (Lauwigi and Vogt, 2013). Here, HSF could have an advantage compared to LSF in applications where size matters. Next to size, another advantage is the very long lifecycle of HSF and the possibility to know the exact energy content of the device, two criteria where batteries show weaknesses but that are essential for this application. Therefore, the UPS market represents a large, promising consumer market that is less dependent on uncertain electricity grid regulations. Finally, this market could be interesting as it is independent of complex and rapidly changing energy politics.
Renewable energy home storage	Renewable energy home storage is currently emerging in Germany and Austria thanks to a government subsidy program (BSW, 2015, KfW, 2013). A growing number of energy autarchic households (currently 15,000) reportedly use only home produced wind and solar energy, relying on storage to compensate for intermittency. Home storage also has the advantage of reducing the energy bill by reducing the power purchased from the grid (BSW, 2015).	While this market appears to be a very promising consumer market, batteries are strong competition for HSF, especially the growing availability of second-hand batteries from electric vehicles. A support program was launched in Germany (BSW, 2015), which however seems to favor batteries. Furthermore, very few households expressed the desire to work with clean storage technologies. Therefore, the demand for HSF is still unclear and competition on price very high.
Leveling of solar/wind parks	In Austria, where the maximum output power of solar and wind parks is regulated, a need to level production peaks, and therefore storage at the park level, is emerging. Production levelling would allow an increase of overall generation capacity by shifting peak power to off-peak hours.	Future developments strongly depend on national regulations. At present, this market seems specific to the Austrian context and is uncertain as the regulatory framework is still developing.

^aProcurement takes place in a competitive tendering process. Based on response time, availability, and amount of energy, three types of reserves are distinguished: primary, secondary, and tertiary control reserves Regelleistung.net (2016). Characteristics of the three reserve types: primary reserves: 30 s activation time and 1 MW available for at least 15 min; secondary reserve: 5 min activation time and 5 MW for 15–60 min; tertiary reserves: 15 min activation time and 5 MW for a minimum 15 min. Given their technical characteristics, FES could provide primary and possibly also secondary control reserves. But given the size of the bids, tendering is only accessible for large storage facilities, such as the flywheel storage plants built by Beacon Power (2016) in the US.