From the period of 2022 to 2028, the Global Energy Storage System Market is expected to reach USD 302 Billion in terms of revenue, growing at a Compound Annual Growth Rate (CAGR) of 7.9%.
Battery energy storage is seen as a crucial technology for achieving a sustainable energy system. Battery Energy Storage System control voltage and frequency, lower peak demand costs, incorporate renewable energy sources and offer backup power. The market's expansion can be attributed to rising demand for grid Energy Storage System as a result of ongoing grid modernization, increasing penetration of lithium-ion batteries in the renewable energy sector, and the rising trend of adopting a low-carbon and fossil-fuel-free economy, as well as the ongoing renewable energy revolution. Energy Storage System are in high demand as the demand for effective grid management, regular load control, and efficient and reliable power supply grows across industries. Growing environmental concerns, carbon footprint reduction, and the development of sustainable energy sources are some of the major variables that will have a substantial impact on market growth. Furthermore, government measures to promote the adoption of renewable energy sources are likely to be a prominent driver driving market expansion.
Key Highlights from the Report
- On the basis of Technology, the market is segmented into Pumped Hydro Storage, Battery Energy Storage, Compressed Air Energy Storage, and Flywheel Energy Storage. Due to increased demand for pumped hydro storage power generation around the world, the pumped hydro storage sector held the biggest Energy Storage System Market share in 2021. Furthermore, government initiatives to promote renewable energy generation are projected to fuel market expansion over the forecast period. Furthermore, an increase in global power consumption is expected to drive market expansion in the future years.
- On the basis of End-user, the market is segmented into Residential, Non-Residential, and Utilities. In 2021, the utilities application market was prominent. The necessity to meet peak electricity needs is a fundamental factor driving the growth of the utility sector. In the event of an unexpected fluctuation in the energy supply, the utility BESS provides power quality, frequency, and voltage control services. When there is an excess of renewable energy, grid operators can save electricity by using battery energy storage systems. The strong demand for battery Energy Storage System in the utility industry is due to the rising demand for a dependable and efficient supply of electricity in most locations, as well as the growing requirement for renewable energy.
- Asia Pacific is the fastest regional segment in terms of growth. The battery energy storage system market is centered on APAC. Electrification plans for distant areas, which are primarily off-grid in various countries, are projected to emerge in APAC. The implementation of domestic energy storage technologies will allow these rural and island populations in the region to have better access to electricity. As governments in developing economies implement new rules to improve the reliability and quality of power distribution infrastructure to residential users, energy storage investments are likely to skyrocket in the APAC area.
Increasing Demand for Grid Energy Storage System Owing to Ongoing Grid Modernization
The most common renewable energy kinds that are stored in grids are solar and wind energy. However, when the sun is obscured by clouds or by changing wind currents, the energy generation process changes. Such oscillations necessitate the deployment of flexible grid solutions for energy storage. Grid modernization is increasingly using battery energy storage technology. When the electricity generated exceeds the electricity demand, these solutions assist grid operators in saving electricity. The implementation of these technologies increases the electrical supply systems' reliability and flexibility in terms of electric power generation, transmission, and distribution.
High Capital Expenditure Required for Installing Battery Energy Storage Systems
Because of the high energy density and higher performance given by battery energy storage technologies such as lithium-ion batteries, flow batteries, and lead-acid batteries, increased installation investments are required. Lithium-ion batteries are expensive because they have a high energy density, a low self-discharge rate, and require little maintenance. Lithium-ion batteries are projected to become less expensive in the future. Because they are lightweight and compact, as well as having a huge capacity, these batteries are also employed in electric vehicles (EVs). Furthermore, the high initial investment cost of manufacturing flow batteries could be a major stumbling block to the market's expansion.
Over the projection period, Asia Pacific is expected to have tremendous growth. Because of the region's fast industrialization and urbanization, Asia Pacific is seeing strong economic growth. Furthermore, the government's policies are drawing significant FDI to the region. The Asia Pacific has become a manufacturing hub due to the accessible and affordable availability of production factors in key nations such as India and China. Due to increased energy consumption, the robust growth of industries is boosting the demand for energy storage systems. Furthermore, the region's expansion is likely to be fueled by the increased need for reliable and efficient power. China is the world's largest producer and customer of energy storage systems. Furthermore, rising expenditures in electric vehicle infrastructure are projected to have a substantial impact on market growth in the future years.