Energy Storage Market - Forecasts from 2022 to 2027

Energy Storage Market - Forecasts from 2022 to 2027

The energy storage market was valued at US$20.355 billion in 2020 and is expected to grow at a CAGR of 14.43% over the forecast period to reach a total market size of US$52.297 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 witness considerable growth

The shift to a sustainable energy system is expected to require the use of battery energy storage. Voltage and frequency are controlled, peak demand costs are decreased, renewable energy sources are integrated, and a backup power supply is offered by the battery energy storage system. Energy storage systems depend heavily on batteries, which also account for the majority of the system's overall cost. Lithium-ion, lead-acid, nickel-cadmium, and flow batteries are a few of the different battery types utilized in energy storage systems. Due to their falling pricing, lithium-ion batteries have been experiencing an increase in demand in the battery energy storage sector. By 2030, the US Department of Energy set an initial pricing target of USD 125/kWh, and it is predicted that the price of lithium-ion batteries will reach USD 73/kWh by that year. Furthermore, due to their low maintenance needs, lightweight, consistent cycle life, high energy density in relation to volume, and high charge and discharge efficiencies, lithium-ion batteries are anticipated to hold a sizable share of the battery energy storage industry.

Asia Pacific to hold a dominant share in the market

Over the predicted period, Asia Pacific is anticipated to hold a sizeable share of the energy storage market. There are two main power grid types in the area, each with unique properties and prospects for energy storage devices. On one side, there are advanced countries like Japan, South Korea, New Zealand, and Australia as well as other significant cities with reliable, cutting-edge grids. On the other hand, other countries still lack adequate power grids and are still establishing their basic infrastructural systems. Rapid urbanization and population expansion are anticipated in developing nations, which is predicted to boost demand for power. For example, India plans to have 275 GW of combined wind and solar capacity, 72 GW of hydropower, and 15 GW of nuclear power by 2027. The demand for energy storage systems to address the issues linked to the intermittent nature of renewable energy generation is also anticipated to increase with the rising growth of the renewable sector.

In addition, the South Korean government reduced its projected growth in electricity demand through 2030 to 1% yearly in accordance with the 8th Basic Plan for Electricity Supply and Demand. Through energy-saving measures, the adoption of green sources of renewable energy in combination with ESS, and a reduction in fine dust particle pollution, the government plans to lower its greenhouse gas emissions. Additionally, China announced in 2021 that it would increase the total installed capacity of non-pumped hydropower storage to approximately 30 GW by 2025 and 100 GW by 2030. These plans, along with China's adoption of time-of-use power tariffs that widen the gap between peak and off-peak power rates, are anticipated to catalyze a boom in the battery storage industry. Therefore, it is anticipated that all of these aspects would contribute to the region's quick expansion.

Key Developments

October 2021: The government of India gave the go-ahead for inviting the expression of interest (EOI) for the installation of a 1000 MWh Battery Energy Storage System as a pilot project. In order to offer a blueprint for the deployment of the energy storage system in the nation, the Ministry of New and Renewable Energy and the Ministry of Power collaborated on this project.
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 goal of this deal was to collaboratively provide industrial consumers with modularized and standardized thermal energy storage solutions.

COVID-19 Impact on the energy storage market

Due to the initial financial instability that the customers experienced, the COVID-19 pandemic-induced economic slowdown limited the deployment of domestic energy storage. Additionally, the commercial and industrial sectors suffered as a result of businesses avoiding non-essential capital investments, which had a very negative effect on the market for energy storage.

Market Segmentation:

By Technology

Thermal Storage
Batteries
Pumped-Storage Hydropower
Compressed Air Energy Storage
Flywheels
By Application
Grid and Industrial
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