New York, Dec. 05, 2023 (GLOBE NEWSWIRE) -- The global battery energy storage market size is slated to expand at ~28% CAGR between 2023 and 2035. The market is poised to garner a revenue of USD 212.8 billion by the end of 2035, up from a revenue of ~USD 11 billion in the year 2022.Increasing investments in solar and wind power, creating intermittent energy generation patterns, and substantial transition towards low-carbon energy generation solutions will contribute to a substantial expansion of industry size. In 2022, global investment in battery storage was over USD 20 billion with most investments concentrated on grid-wide deployment, representing almost 65% of overall expenditure. The growth of electric vehicles (EVs) has created a demand for charging infrastructure and battery energy storage solutions. Electric car sales have more than tripled in three years, from roughly 4% in 2020 to 14% in 2022.
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EV sales are predicted to remain strong through 2023. Over 2.3 million electric vehicles were sold in the first quarter, representing a 25% increase over the same period last year. The demand for battery energy storage has been driven by the increasing adoption of renewable energy sources, such as solar and wind power. BESS helps address the intermittency and variability of these sources by storing excess energy for use during periods of low generation. Battery energy storage is used in various applications, including grid support, frequency regulation, peak shaving, and backup power. Additionally, it plays a crucial role in supporting electric vehicle (EV) charging infrastructure.
Reduced Emissions across the Globe to Boost Market Growth
Battery energy storage systems contribute to reduced greenhouse gas emissions by enabling greater integration of renewable energy sources and reducing the need for fossil fuel-based peaking power plants. To meet the goal of reducing greenhouse gas emissions by 55% by 2030, batteries are the fastest-growing storage technology. Many governments around the world are implementing policies and incentives to promote the transition to clean energy sources and reduce greenhouse gas emissions. Battery energy storage is often a key component of these initiatives, further driving market growth. The developments in battery technology are leading to improvements in energy density, cycle life, security, and cost-effectiveness. As batteries become more efficient and affordable, adopting energy storage systems is likely to accelerate the market for battery energy storage. In research conducted by our analysts, over the next five years, capacity for energy storage worldwide is expected to grow by 55 % and reach 260 GW in 2026. Advances in battery technologies, such as lithium-ion batteries, have contributed to the growth of the market. Lithium-ion batteries are widely used for their high energy density, longer cycle life, and relatively low maintenance requirements. The cost of battery energy storage has been declining, making it more economically viable. This cost reduction is attributed to economies of scale, technological advancements, and increased manufacturing efficiency.
Battery Energy Storage Market: Regional Overview
The market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Expanding Renewable Energy Integration to Drive the Market Growth in Asia Pacific Region
The battery energy storage market in Asia Pacific region is estimated to garner the largest revenue by the end of 2035. Asia Pacific, home to rapidly expanding economies, is experiencing a significant shift towards renewable energy sources. Governments across the region are implementing ambitious renewable energy targets, prompting an increased need for energy storage solutions to manage the intermittency of renewable generation. Asia Pacific is expected to dominate global energy storage installations, reaching 45% of the total market by the year 2040. As countries in the APAC region, including China and India, aggressively invest in renewable energy, the integration of variable energy sources like solar and wind necessitates effective energy storage. Battery energy storage systems provide the flexibility required to balance supply and demand, ensuring a stable and reliable power grid. Governments in the Asia Pacific region are playing a pivotal role in fostering the growth of the battery energy storage market. Incentive programs, subsidies, and supportive policies are creating a favorable environment for investments in energy storage projects.
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Electric Vehicle (EV) Charging Infrastructure Expansion to Propel the Growth in the North America Region
The North America battery energy storage market is estimated to garner the highest CAGR by the end of 2035. The rapid growth of the electric vehicle market is driving the demand for robust EV charging infrastructure. Battery energy storage systems play a vital role in supporting fast and reliable charging, ensuring grid stability, and managing peak demand. The Edison Electric Institute (EEI) estimates that the number of electric vehicles on U.S. roads is expected to exceed 18 million by 2030, necessitating substantial investment in charging infrastructure. As the electrification of transportation gains momentum, the demand for efficient and scalable EV charging solutions grows. Battery energy storage, when integrated with charging stations, enables quick charging, grid balancing, and load management, contributing to the widespread adoption of electric vehicles. Ongoing advancements in battery chemistry, manufacturing processes, and economies of scale contribute to a steady decline in the cost of energy storage. This cost reduction makes battery energy storage economically attractive, spurring investment and deployment across a broad range of applications.
Battery Energy Storage, Segmentation by Battery Type
- Lithium-Ion Battery
- Lead-Acid Battery
- Flow Battery
Amongst these segments, the lithium-ion battery segment in battery energy storage market is anticipated to hold the largest share over the forecast period. The increasing deployment of new high-capacity grid infrastructure, as well as continual developments in Li-ion BESS devices, will fuel market expansion. The primary benefit of Li-ion batteries is their high specific energy, which can reach up to 250 kWh/kg for commercially accessible products. Furthermore, multiple companies are investing in developing operational capabilities of various types, such as vanadium redox (VRB) flow batteries, to meet the growing demand across a wide range of applications. The lithium-ion battery segment is experiencing an unparalleled surge in demand, primarily propelled by the booming electric vehicle market. The global shift toward sustainable transportation is driving the need for high-performance and energy-dense lithium-ion batteries. The automotive industry's transition to electric mobility is a chief catalyst for the demand surge in lithium-ion batteries. With automakers committing to electrification and governments incentivizing EV adoption, lithium-ion batteries have become the de facto standard, owing to their high energy density, lighter weight, and longer cycle life. The push for renewable energy integration is a pivotal growth driver for the lithium-ion battery segment. As renewable energy sources like solar and wind become more prevalent, the need for efficient energy storage solutions, such as lithium-ion batteries, to manage intermittency and ensure grid stability is on the rise.
Battery Energy Storage, Segmentation by Connection
- On Grid
- Off Grid
Amongst these segments, the off-grid segment in battery energy storage market is anticipated to hold a significant share over the forecast period. One of the primary growth drivers for the off-grid segment is the concerted effort to bring electricity to remote and underserved areas. Governments and organizations globally are spearheading initiatives to extend energy access, fostering socio-economic development in off-grid regions. According to the International Energy Agency (IEA), as of 2021, approximately 759 million people still lacked access to electricity, with a substantial portion residing in rural and off-grid areas. Off-grid solutions play a pivotal role in addressing the electrification gap. Solar home systems, mini-grids, and other off-grid technologies provide a decentralized and cost-effective means to deliver reliable power to communities beyond the reach of traditional grid infrastructure, catalyzing improvements in education, healthcare, and economic opportunities. Improved solar efficiency and declining costs make off-grid solar solutions more accessible. Coupled with advancements in battery energy storage, these technologies ensure a continuous and reliable power supply, even in areas with irregular sunlight patterns, reinforcing the viability of off-grid energy systems.
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Few of the well-known industry leaders in battery energy storage market that are profiled by Research Nester are Delta Electronics, Inc, Hitachi, Ltd, General Electric, SAMSUNG SDI CO., LTD., Siemens, Panasonic Holdings Corporation, AEG Power Solutions, and other key market players.
Recent Development in the Battery Energy Storage Market
- Delta introduces a portable skid-mounted energy storage system on Industrial and Commercial premises, as well as EV recharging stations
- The next generation of the mesh (1) portfolio of energy storage and digital automation solutions was launched by Hitachi Energy.
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