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The global battery energy storage market size stood at USD 7.06 billion in 2019 and is anticipated to attain USD 19.74 billion by 2027, exhibiting a CAGR of 20.4% during the forecast period.
Battery energy storage systems (BESS) are widely installed at different stages of the electricity grid to deliver secure and sustainable power when needed. The rechargeable units are used to meet the energy demands in numerous conditions such as emergency backup, and load shifting, and peak shaving, along with other grid services. The storage assembles a wide range of electrochemical batteries equipped with one or more cells having cathodes, anodes, and electrolytes to provide reliable output.
Logistical Delays in Projects & Capital Deficits amid COVID-19 to Stall Market Growth
The spread of the global viral infection termed as COVID-19 has significantly impacted different countries in various respects. Nations have implemented stringent actions such as limiting operating personnel as well as the shutdown of various operations to contain the spread of this deadly outbreak within prevailing circumstances. Consequently, various businesses have undergone severe financial stress as national economies have shrunk because of the pandemic, thereby significantly impacting the battery energy storage market growth in 2020.
Furthermore, the unfavorable scenario of limiting cross-border trade to mitigate the transfer of the virus has resulted in the unattainability of several BESS components and disrupted shipments across the globe. However, financial support and targets for renewable installations to propel the ‘green wave’ to lower emissions are likely to balance the current losses faced by the energy industry. For instance, in June 2020, the Government of Germany announced the expansion of the country’s offshore wind energy targets from the initial 15 GW to 20 GW by 2030, along with a final aim to deploy 40 GW by 2040.
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Continuous Efforts by Industry Players to Introduce Advanced Products to Favor Market Dynamics
Many of the participants in the market are focusing on expanding their portfolios with innovative product lines having dedicated applications. These companies are also concentrating on introducing products & components with the ability to integrate next-generation technologies to enable customers with safe & easy installations and operations.
For instance, in March 2019, Siemens launched a new lithium-ion battery storage unit specifically designed for residential applications. The Junelight Smart Battery system is equipped with enhanced energy management features and is embedded with a mobile application to manage the device in real-time effectively.
Increasing Deployment of Renewable Power Generation Technologies to Complement Growth Pace of the Market
The growing installation of low-carbon technologies such as wind and solar is set to become a long-term driver and open up new possibilities for stationary storage units in the market. Different administrations and organizations have observed a steep increase in renewable power deployment as a result of their plans and investments to significantly increase clean energy contribution in the primary energy mix. For example, as per a report published by the International Renewable Energy Agency (IRENA), total solar energy installed capacity across the globe equaled 584.8 GW by the end of 2019 as compared to 486.7 GW in 2018, observing an annual increment of over 20.2%.
Growing Energy Demand Coupled with Favorable Government Policies to Boost Industry Landscape
Rapidly rising energy demand across developing and developed economies owing to the transforming residential, commercial, and industrial infrastructures is set to propel the market growth. In September 2019, for instance, the International Energy Agency (IEA) projected that the global energy demand is set to grow by about 50% by 2050 from 2018 levels. Additionally, encouraging a regulatory framework to support low-carbon technologies along with a positive outlook for the electrification of distant areas is likely to augment the industry outlook further. For instance, the European Union has enforced a 2030 climate & energy framework from 2021 to 2030, with a target to diminish greenhouse gas emissions by about 40% by 2030.
Regular Efforts to Reduce BESS Costs to Drive Growth Opportunities
Various government establishments are increasingly focusing on reducing installation & operational costs associated with different solid-state batteries, including lithium-ion batteries, propelling the global energy storage market. Additionally, numerous private organizations are also joining forces to incorporate new electrochemical solutions to fight climate change problems. For example, in September 2019, The Faraday Institution, an independent energy storage research facility located in the UK, allocated around EUR 55 million to five national consortia to conduct research for modifications in battery systems, chemistries, and production procedures for improved costs & applications in grid storage and transport use.
High Initial Costs for Installation May Obstruct Growth
Energy storage systems are fabricated with a wide range of battery units, which entail a considerable amount of initial deployment costs depending upon their working mechanisms. This complex and costly nature of operations may hinder the installation of BESS devices across different locations. Furthermore, increasing cases of fire accidents across different battery types, primarily lithium-ion batteries, also pose a challenge for the battery energy storage industry growth. However, industry participants are increasingly focusing on introducing advanced systems with better characteristics and prices to cope up with the increasing demand.
Lithium-Ion Batteries to Lead the Market Share
Based on battery type, the global market is divided into lithium-ion battery, lead-acid battery, flow battery, and others. The lithium-ion battery segment is projected to account for the major market share owing to the declining installation costs coupled with quick response time and high energy density of these batteries.
The lead-acid batteries segment is also anticipated to observe substantial growth due to their high specific power and easy operations at variable temperatures.
Long working life, versatile functions, less electrolyte degradation, and improved safety are the key features complementing the expansion of flow batteries.
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Off-Grid Battery Energy Storage Systems to Display Notable Growth
Based on connectivity, this market can be broadly bifurcated into on-grid and off-grid. The off-grid segment is likely to observe substantial expansion owing to the growing deployment of behind the meter units, especially in emerging economies.
On the other hand, favorable feed-in-tariff policies by governments to provide energy backup to grids, coupled with significant opportunities for electricity storage integration across transmission & distribution networks, will complement the on-grid segment outlook.
Utility Segment Growth to be Backed by Increasing Setup of Large Renewable Power Generation Facilities
Based on application, this market is categorized into residential, non-residential, utility, and others. The residential segment is anticipated to experience an extensive growth rate owing to the rising awareness among consumers regarding efficient and reliable power supply sources with a low carbon footprint. As a result, the growing installation of bulk capacity green power plants by public and private organizations is set to favor the utility segment landscape.
The non-residential application segment is favored by the supportive governmental regulations to maintain energy security and carbon discharges of commercial establishments.
Customer-owned Systems to Register the Highest CAGR
Based on ownership, the market is divided into customer-owned, third-party owned, and utility-owned. The customer-owned segment is anticipated to observe extensive growth owing to the flourishing residential sector coupled with an increasing focus on improving energy supply during peak demand durations.
The utility-owned segment is favored by the rising level of integration of renewables along with the growing need for cost-effective and flexible grid operation systems.
A mounting number of independent power producers’ presence across various regions is set to propel the third-party-owned segment size.
Asia Pacific Battery Energy Storage Market Size, 2016-2027 (USD Billion)
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The market has been analyzed across the four key regions of North America, Europe, Asia Pacific, and Rest of the World. Asia Pacific is expected to lead the battery energy storage market share both in terms of annual volume as well as revenue owing to the presence of differently-sized industry players along with rapidly rising renewable energy deployment. Additionally, the region is also backed by the developing residential infrastructures and rural electrification targets.
North America is projected to experience notable growth over the forecast period owing to the significant investments in R&D activities to lower the cost of energy storage technologies. Additionally, the robust presence of different large-scale battery energy storage plants across the region will further boost the market. Moreover, an advantageous policy framework by regional authorities to effectively integrate BESS in different applications along with significant plans to install new technologies will boost the regional industry landscape.
Europe is also likely to account for a considerable portion of global BESS installations due to numerous factors such as stringent carbon reduction norms, high building energy-efficiency targets, and increasing emphasis on low carbon energy generation, among many more. Furthermore, continuous efforts to improve existing policies to provide momentum to battery energy storage technologies, in addition to the monetary support to encourage deployment of renewables, are likely to add to the regional market growth.
Total to Concentrate on Building New Large Capacity Products and Introducing New Solutions
Total is undertaking new projects and developing its BESS offerings to fortify its portfolio and deepen its footprint in this market. For example, in March 2020, the company announced the construction of a new lithium-ion energy storage facility in Dunkirk, France, to support the stability of the national grid network. The new project, equipped with 25 MW power generated along with a storage capacity of 25 MWh, is set to be the largest in the country and will initiate operations by the end of this year.
Furthermore, the battery energy storage industry is projected to be considerably fragmented, with many players operating in the market. These organizations are shaping the competitive landscape by participating at country, regional, and global levels, depending on their product reach and application characteristics. Various companies are readily focusing on introducing advanced product lines with easy integration in different sectors at different stages to serve the high capacity requirements of customers.
An Infographic Representation of Battery Energy Storage Market
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The battery energy storage market research report presents a comprehensive assessment of the global market by offering valuable insights, facts, industry-related information, and historical data. Several research methodologies and approaches are adopted to formulate meaningful assumptions and views. Furthermore, the report offers a detailed analysis and information as per market segments, helping our readers to get a comprehensive overview of the global industry.
Volume (MW) and Value (USD Billion)
By Battery Type
Fortune Business Insights says that the global market size was USD 7.06 billion in 2019 and is projected to reach USD 19.74 billion by 2027.
In 2019, the Asia Pacific market value stood at USD 3.13 billion.
Registering a CAGR of 20.4%, the market will exhibit significant growth over the forecast period (2020-2027).
The lithium-ion battery segment is anticipated to dominate this market during the forecast period.
Growing installation of clean energy technologies and rising concerns for energy security are the major factors driving the growth of the market.
Asia Pacific dominated the market in terms of share in 2019.
Rising deployment of renewable power generation stations such as solar, wind, and hydro has created new opportunities to integrate battery storage to enable more reliable grid operations.
ABB, Total, GE Renewable Energy, Siemens Energy, and Kokam are the key participants operating across the industry.
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