Posted: June 9, 2008

Nearly three million plug-in hybrid and pure electric vehicles per year will be sold by 2012. The market for the lithium-ion batteries in these vehicles will surge to $16.9 billion in 2012 compared with $6.8 billion in 2007.

Also by 2012, fuel cells “will return from the dead,” commercial sales rising to $1.8 billion from just $92 million in 2007, growth driven almost entirely by new applications in residential combined heat and power (CHP) systems, and distributed generation uses.

Those are the headlines of a new report from energy technology research firm Lux Research. Overall, the report indicates that for investors with a five-year or longer time horizon, there should be numerous opportunities to make a great deal of money investing in companies whose technologies enable power to be stored.

The report singles out a number of companies that investors should watch. Matsushita and LG Chem are mentioned as likely beneficiaries of the transportation energy storage market, while Ballard Power Systems and Ceramic Fuel Cells are cited in the area of fuel cells. Privately-held lithium-ion battery developer A123 Systems, which is rumored to be going public as early as this fall, is another in the spotlight.

The Lux report comes on the heels of a panel discussion on energy storage at the recent Merriman Curhan Ford investor conference during which top executives at four firms in the energy storage sector also predicted sharp growth. (For more see How Execs at 30 Top Cleantech Firms Expect to Make Lots of $ (Part 5 of 7) ‘Energy Storage’ Systems Becoming Indispensable.

The Lux report states, “The energy storage landscape will change over the next five years as new technologies enter in earnest from 2011 onward. Flywheels will branch out from data center backup power to grid frequency regulation; fuel cells will finally achieve scale in stationary applications; and new battery types including zinc-bromide and vanadium redox flow batteries, silver-zinc batteries, and zinc-air batteries will stake out valuable niches. Opportunities abound for investors . . . .”