Energy Storage Market - Forecasts from 2022 to 2027

The energy storage market was valued at US$196.714 billion in 2020 and is expected to grow at a CAGR of 17.65% over the forecast period to reach a market size of US$613.550 billion in 2027.

Energy storage also referred to as electricity storage, means the storage of energy. Energy storage works by capturing energy from renewable and non-renewable sources and discharging it when necessary. This gives the user greater flexibility in the use of electricity and control over its storage. The storage helps in overcoming the traditional barriers related to the continuous supply of energy, helping in self-sufficiency, and maintaining the equilibrium between the supply and demand of electricity. The storage of energy is becoming increasingly popular. This could be due to the rising demand for renewable energy, scarcity of fossil fuels and the pollution caused by its use, and various supportive government policies. These factors along with others such as increasing global power consumption, heavy public-private investment, improving energy storage economics, rapid industrialization in developing countries, increased usage of energy storage systems in transportation, and various energy storage schemes(ESS). However, the high installation costs of storage systems along with the high capital cost for deployment of energy storage technologies could be a concern for the market.

Batteries Segment to show considerable growth

Battery energy storage is considered a critical technology in the transition to a sustainable energy system. The battery energy storage system regulates voltage and frequency, reduces peak demand charges, integrates renewable sources, and provides a backup power supply. Batteries play a crucial part in energy storage systems and are responsible for around most of the system's total cost. The various types of batteries used in energy storage systems are lithium-ion, lead-acid, nickel-metal hydride, nickel-cadmium, nickel-zinc, and flow batteries, among others. Lithium-ion batteries have been observing a burgeoning demand in the battery energy storage market, owing to their declining prices. The United States Department of Energy announced an interim price target of USD 125/kWh by 2030, and the costs for lithium-ion batteries are estimated to fall to as low as USD 73/kWh by 2030. Further, lithium-ion batteries are projected to hold a significant share in the battery energy storage market, as they require low maintenance, are lightweight, have a reliable cycle life, have high energy density regarding volume, and have high charge and discharge efficiency.

Asia Pacific to hold a dominant share of the market

Asia Pacific is estimated to show its dominance in the energy storage market over the analysed period. The region consists of two main types of power grids with different characteristics and opportunities for energy storage systems. On one side there are highly developed nations, like Japan, South Korea, New Zealand, and Australia, and other major cities with advanced grids that operate reliably and utilize advanced technologies. On the other side, there are nations that are still developing their fundamental infrastructure systems and have limited power grids. The developing regions are expected to witness rapid population growth and urbanization, which in turn, is projected to increase the demand for electricity. For instance, by 2027, India aims to have 275 GW of total wind and solar capacity, along with 72 GW of hydro and 15 GW of nuclear capacity. With the rising growth of the renewable sector, the demand for the energy storage system, to address the challenges related to intermittency in renewable power generation, is also projected to grow. Further, according to the 8th Basic Plan for Electricity Supply and Demand, the South Korean government lowered its estimated electricity demand growth to 1% annually through 2030. The government also intends to cut its greenhouse gas emissions and reduce fine dust particle pollution through energy conservation measures and via the use of cleaner energy renewable energy sources coupled with ESS. Moreover, in 2021, China announced its plans to boost the cumulative installed non-pumped hydro energy storage to around 30GW by 2025 and 100GW by 2030, along with adoptions of time-of-use power tariffs that create a greater range between peak and off-peak power prices, which are expected to drive a boom in the battery storage activity. Thus, all these factors are expected to attribute to the rapid growth in the region.

Key Developments

October 2021: The government of India gave a go-ahead for inviting the expression of interest (EoI) for the installation of a 1000 MWh Battery Energy Storage System as a pilot project. This was a joint effort of the Ministry of New and Renewable energy and the Ministry of Power who had been working on this to provide a road map for the installation of the energy storage system in the country.

August 2020: Greenko Energies Pvt Ltd and NTPC Vidyut Vyapar Nigam Ltd., a wholly-owned subsidiary of NTPC Limited entered into an MOU with the intent to discover the possibility of development of Renewable Energy based RTC, flexible and dispatchable power supply offering based on the combination of RE sources and Pumped Storage projects.

June 2020: Siemens Energy, a supplier of thermal energy storage systems entered a long-term partnership with EnergyNest, a Norwegian technology company. The aim of the partnership was to jointly offer modularized and standardized thermal energy storage systems for industrial customers.

COVID-19 Impact on the Energy Storage Market

The economic downturn induced by the outbreak of the COVID-19 pandemic restrained the residential energy storage deployment due to the financial uncertainty faced by the customers during the initial phases. Further, the commercial and industrial segment also witnessed a negative impact as companies avoided non-essential capital investments, thus causing a severely negative impact on the energy storage market.

Market Segmentation:

By Technology

Thermal Storage

Batteries

Pumped-storage Hydropower

Compressed air energy storage

Flywheels

By Application

Grid-Storage

Transportation

By End-User

Residential

Commercial

Industrial

By Geography

North America

United States

Canada

Mexico

South America

Brazil

Argentina

Others

Europe

UK

Germany

France

Italy

Spain

Others

Middle East and Africa (MEA)

Saudi Arabia

UAE

Israel

Others

Asia Pacific

China

Japan

South Korea

India

Indonesia

Thailand

Taiwan

Others