PUBLISHER: MarketsandMarkets | PRODUCT CODE: 1836425
PUBLISHER: MarketsandMarkets | PRODUCT CODE: 1836425
The compressed air energy storage market is expected to grow from USD 0.48 billion in 2025 to USD 1.88 billion by 2030, at a CAGR of 31.4% during the forecast period.
Scope of the Report | |
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Years Considered for the Study | 2020-2030 |
Base Year | 2024 |
Forecast Period | 2025-2030 |
Units Considered | Value (USD Million) and Volume (MW, MWh) |
Segments | By Type, Expenditure Type, Capacity, Storage Form, Application, and Region |
Regions covered | Europe, Asia Pacific, North America, RoW |
The market is driven by the growing need for long-duration, emission-free energy storage solutions to support renewable integration and enhance grid reliability. Compressed air energy storage (CAES) systems enable large-scale storage of surplus renewable electricity and provide dispatchable power without direct greenhouse gas emissions, making them a feasible option for reducing reliance on fossil fuels and achieving climate targets. Rising renewable energy adoption directly increases the demand for supporting storage infrastructure such as CAES plants. Market expansion is further reinforced by laws, policies, and investment incentives that favor clean, sustainable energy storage technologies.
"Grid management segment to register highest CAGR from 2025 to 2030"
Compressed air energy storage (CAES) systems enhance operational efficiency by providing long-duration flexibility and balancing supply-demand fluctuations. They mitigate the challenges of renewable intermittency, ensuring stability against underutilized generation during low-demand periods and preventing overburdening of grids during peak loads. The technology supporting grid management through CAES is maturing, reducing development risks and encouraging large-scale investment. Furthermore, CAES systems integrate well into existing transmission and distribution networks, allowing utilities to target regions of moderate to high renewable penetration. Their versatility in scale and siting offers significant deployment opportunities, improving overall grid resilience and accessibility. Additionally, the predicted expansion of renewable capacity is well supported by the economic feasibility of CAES in grid management, particularly in terms of system lifetime, low operating costs, and provision of ancillary services.
"Underground storage form to be the fastest-growing segment during forecast period"
In the underground storage segment, compressed air energy storage (CAES) systems achieve higher efficiency and reliability by utilizing naturally occurring or purpose-built caverns, such as salt domes, aquifers, or hard-rock formations. These geological structures provide large, secure, and cost-effective storage volumes, avoiding the underutilization risks of smaller above-ground tanks and the potential cost intensiveness of alternative storage solutions. The technology for underground CAES is well established and widely proven, which reduces development risks and attracts greater investor confidence. Additionally, underground facilities are strategically suited for deployment in regions with moderate to high renewable penetration, offering long-duration capacity that strengthens grid stability and resilience. Their scalability and adaptability make them ideal for meeting growing market demand, while their economic feasibility in terms of construction, maintenance, and long operational life further reinforces their role in advancing CAES adoption globally.
"Europe to be fastest-growing compressed air energy storage market"
Europe is the fastest-growing market for compressed air energy storage (CAES), supported by several large-scale projects. In Germany, Corre Energy and Eneco are developing a major CAES facility in Ahaus using salt caverns, which is expected to provide over 300 MW of generation capacity by 2027. In the Netherlands, Corre Energy is advancing the Zuidwending project in Groningen, designed as a hydrogen-enabled CAES plant with multi-day storage capability. Alongside these, the EU is supporting innovation projects such as ASTERIx-CAESar, which integrates CAES with solar thermal systems to improve efficiency and flexibility. These initiatives highlight Europe's strong commitment to long-duration storage as part of its energy transition strategy.
In Europe, ambitious climate targets and renewable energy directives are driving strong policy support for long-duration storage solutions such as CAES. The EU's Green Deal, along with funding mechanisms like Horizon Europe and Projects of Common Interest (PCI), provides financial and regulatory backing to accelerate development. National governments in countries like Germany and the Netherlands are further supporting CAES projects through grid modernization incentives and renewable integration programs.
By Company Type: Tier 1 - 57%, Tier 2 - 29%, and Tier 3 - 14%
By Designation: C-Level Executives - 35%, Directors - 20%, and Others - 45%
By Region: North America - 20%, Europe - 15%, Asia Pacific - 30%, Middle East & Africa - 25%, and South America - 10%
Notes: The tiers of the companies are defined based on their total revenues as of 2024; Tier 1: > USD 1 billion, Tier 2: USD 500 million to USD 1 billion, and Tier 3: < USD 500 million. Others include sales managers, engineers, and regional managers.
Hydrostor (Canada), APEX CAES (US), Storelectric LTD. (UK), Keep Energy Systems (UK), Corre Energy (Netherlands), TerraStor Energy Corporation (US), ALCAES (Switzerland), Augwind (Israel), Enairys Powrtech (Switzerland), Highview Power (UK), Baromar (Israel), Powerphase International (US), Sherwood Power (UK), Brayton Energy, LLC (US), Siemens Energy (Germany), Evellence (Germany), Ingersoll Rand (US), KOBE STEEL, LTD. (Japan), Doosan Skoda Power (Czech Republic), Green-Y Energy AG (Switzerland), Shaangu (China), Atlas Copco Group (Sweden), Harbin turbine company limited (China), and MITSUBISHI HEAVY INDUSTRIES, LTD. (Japan) are some of the key players in the compressed air energy storage market. The study includes an in-depth competitive analysis of these key players in the compressed air energy storage market, with their company profiles, recent developments, and key market strategies.
The report defines, describes, and forecasts the compressed air energy storage market by type (Adiabatic, Diabatic, Isothermal), expenditure type (CAPEX, OPEX), storage form (Underground, Underwater, Above ground), capacity (Small (Below 50 MWh), Medium (50-500 MWh), Large (above 500 MWh)), Application (Grid Management, Renewable Energy Integration, Others), and region (North America, Europe, Asia Pacific, RoW). The report's scope covers detailed information regarding the major factors, such as drivers, restraints, challenges, and opportunities, influencing the growth of the compressed air energy storage market. A thorough analysis of the key industry players has provided insights into their business overview, solutions, and services; key strategies such as contracts, partnerships, agreements, expansion, Joint ventures, collaborations, and acquisitions; and recent developments associated with the compressed air energy storage market. This report covers the competitive analysis of upcoming startups in the compressed air energy storage market ecosystem.
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