Electric Energy Storage Market Analysis (2024 – 2030)

As per the findings of the research report, the global electric energy storage market achieved a valuation of USD 3.15 billion and is anticipated to reach USD 15.02 billion by 2030. Projections indicate a compound annual growth rate (CAGR) of 25% during the evaluation period (2024 - 2030).

Industry Overview

Energy stands as an indispensable requirement across various sectors including private, commercial, and industrial domains. Addressing the escalating demand for energy necessitates collaborations with innovation-driven entities, considering the imperative to curb hazardous greenhouse gas emissions detrimental to the ozone layer. Battery Energy Storage Systems (BESS) represent a significant facet in this pursuit, employing diverse battery chemistries to store surplus energy and mitigate demand spikes.

Factors propelling market growth include ongoing grid modernization initiatives, the burgeoning utilization of lithium-ion batteries in renewable energy frameworks, and the global shift towards low-carbon, fossil fuel-reduced economies. Nevertheless, the market faces constraints due to substantial capital outlay required for BESS establishment. Despite this, opportunities arise from increased rural electrification endeavors worldwide, augmented demand for uninterrupted power supply in data center operations, and declining costs of lithium-ion batteries. Challenges such as installing BESS in remote locales, battery overheating concerns, and battery aging complexities persist for industry players.

Impact of COVID-19 on the Industry

The COVID-19 pandemic has profoundly impacted the global economy and industries across the board. Stringent lockdown measures implemented by governments worldwide disrupted supply chains and precipitated a sharp decline in product demand, affecting economies at large. Notably, the energy sector witnessed a slowdown in utility applications, with the installation of BESS witnessing a decline in several projects. However, as projects resume and governments emphasize electricity sector enhancements, the adoption of BESS is expected to rebound, albeit possibly not reaching pre-pandemic levels until 2030.

Market Drivers

Increasing demand for grid energy storage systems owing to ongoing grid modernization drives the electric energy storage market

The increasing need for grid energy storage systems driven by ongoing modernization initiatives propels market growth. Renewable energy sources like solar and wind face intermittency issues, necessitating grid storage solutions to manage fluctuations in energy production. BESS play a pivotal role in enhancing grid reliability and flexibility, aiding grid operators in efficiently managing electricity surplus.

The surge in the number of rural electrification projects worldwide boosts the market growth

The surge in rural electrification projects globally stimulates market expansion. Efforts to electrify remote areas require dependable energy storage solutions, with BESS offering a viable option. The development of off-grid territories, especially in developing nations, underscores the importance of consistent power supply from renewable sources.

Market Restraints

The high capital expenditures are required for installing battery energy storage systems for market growth

High initial capital investments required for BESS installation pose a significant restraint to market growth. Technologies such as lithium-ion batteries, known for their superior performance, demand substantial upfront costs. Despite the potential for cost reductions in the future, initial investment barriers remain a challenge.

Complexities in installing battery energy storage systems on islands or in remote areas of electric energy storage hamper market growth

Complexities associated with installing BESS in remote or island locations hinder market growth. Accessibility issues, maintenance challenges, and infrastructural limitations contribute to the difficulties in deploying energy storage systems in such areas.

Global Electrical Energy Storage Market- By Battery Type

• Lithium-Ion Batteries
• Advanced Lead-Acid Batteries
• Flow Batteries
• Other Battery Types

As of 2021, lithium-ion batteries commanded the largest market share, and this trend is expected to persist in the foreseeable future. The dominance of lithium-ion batteries is attributed to their advantageous features, including high energy and power density, leading to minimized standby losses and an extended lifespan of approximately 5 to 15 years with 98% efficiency. Moreover, the versatility of lithium-ion-sulfur battery energy storage systems supports various applications such as frequency regulation, demand charge reduction, grid-buffering, and renewable integration, particularly suitable for on-grid connections.

Global Electrical Energy Storage Market- By Application

• Residential
• Commercial
• Utility

The utility segment emerged as the dominant market player in 2021. The driving force behind the expansion of the utility sector is the imperative to meet peak electricity demands. Battery Energy Storage Systems (BESS) in the utility sector offer control services for power quality, frequency, and voltage, crucial for managing abrupt changes in energy supply. Furthermore, grid operators can optimize electricity consumption during surplus renewable energy periods through battery energy storage systems. The escalating demand for these systems in the utility sector is propelled by the increasing reliance on renewable energy sources and the growing necessity for consistent and efficient electricity supply across most regions.

Global Electrical Energy Storage Market- By Geography & Region

• North America
• Europe
• Asia-Pacific
• Latin America
• The Middle East and Africa

The Asia-Pacific (APAC) region is anticipated to exhibit the highest Compound Annual Growth Rate (CAGR) from 2024 to 2030. In 2021, APAC already boasted the largest market share for battery energy storage systems. The APAC market is particularly centered on plans to electrify rural areas, predominantly off-grid in several nations. Consequently, isolated communities in the region are expected to gain improved access to electricity through the deployment of domestic energy storage technologies. Moreover, as governments in developing countries within APAC implement regulations aimed at enhancing the reliability and quality of power distribution to residential consumers, investments in energy storage are projected to surge significantly. These governmental initiatives, coupled with the region's focus on mitigating the adverse environmental impacts of the energy sector, further stimulate the adoption of battery energy storage systems across household and industrial applications.

Global Electrical Energy Storage Market- By Companies

1. GS Yuasa Corporation
2. Contemporary Amperex Technology Co. Limited
3. BYD Co. Ltd
4. UniEnergy Technologies, LLC
5. Clarionios

Noteworthy Developments in the Global Electrical Energy Storage Market:

• Government Investment: In 2021, the Central Government of India approved expressions of interest (EoI) for the installation of a 1000 MWh battery energy storage system pilot project. The Ministries of New and Renewable Energy and Power collaborated to develop a roadmap for implementing energy storage systems across the nation.
• Business Expansion: In 2020, Greenko Energies Pvt Ltd (Greenko) and NTPC VidyutVyapar Nigam Ltd. (NVVN) forged a partnership to explore the potential for developing a Renewable Energy (RE)-based RTC (Real-Time Control), offering flexible and dispatchable power supply through the integration of RE sources and Pumped Storage projects. Greenko is constructing over 40 GWh of pumped hydro storage projects across six Indian states.
• Business Partnership: Siemens Energy and EnergyNest, a Norwegian technology firm specializing in thermal energy storage equipment, established a long-term collaboration in 2020. The partnership aims to deliver modularized and standardized thermal energy storage solutions to industrial customers.