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The global battery energy storage market size was USD 7.81 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with battery energy storage systems witnessing a positive demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a stellar growth of about 33.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 9.21 billion in 2021 to USD 26.81 billion in 2028 at a CAGR of 16.5% in the 2021-2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Energy is a quintessential need required to conduct daily life operations across residential, commercial, industrial, and many other verticals. Various companies and nations are continuously striving to introduce new technologies to cater to the rapidly increasing electricity needs in different sectors. Furthermore, continuously rising harmful greenhouse gases (GHG) emissions have also inclined the administrations to adopt low carbon systems to generate power. Consequently, one such majorly developing technology is battery energy storage systems (BESS) that utilize different battery chemistries to store energy to serve the excessive demand.
Disruptions in Supply Chains amid COVID-19 Pandemic to Act as a Hurdle for Market Growth
The sudden outbreak of COVID-19, or coronavirus viral infection, has impacted various nations across the globe in an unprecedented manner. The economies of different countries have been drastically impacted by the abrupt increase in the number of cases with Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2). Furthermore, limited global interactions to curb the spread of the deadly virus across the population have significantly hindered the global supply chain logistics, adversely impacting the market.
However, the national administrations have also implemented significant targets to propel the ‘green wave’ caused by interruptions of industrial processes favoring the industry landscape. Furthermore, numerous governments' supportive economic stimulus packages coupled with industry players' continuous efforts are set to counterbalance the demand for BESS units. For instance, in August 2020, ABB declared to join forces with Zenobē Energy Limited, a BESS manufacturer, to provide an advanced traction power solution for UK railways. The partnership aims to fabricate a 25 kilovolt (kV) rail traction power system designed to deliver output by converting power from batteries to continue an uninterrupted power supply to trains.
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Introduction of New and Efficient BESS Devices to Play a Vital Role in Industry Dynamics
Different industry participants are continuously striving to initiate new organic and inorganic expansion plans to boost their product acceptability across the globe. Besides, various players are also introducing new and advanced BESS units to maintain their position across the industry. For instance, in March 2021, Tesvolt, a German storage system manufacturer, launched a novel product line known as TS-I HV 80 battery mainly fabricated to shave load peaks and comply with the demands from commercial and industrial customers.
Continuously Expanding Grid Infrastructure to Unveil New Opportunities for Industry Growth
Rapidly growing energy demand across various emerging and developed nations coupled with increasing measures to ensure energy security is set to propel the market positively. Besides, the rising integration of new power generation technologies and refurbishing existing infrastructure to boost the output is set to generate the need for new grid systems with effective backup and peak load characteristics. For instance, in June 2020, National Thermal Power Corporation (NTPC) Limited, an India-based independent power producer (IPP), declared its plans to deploy about 1 GWh BESS across the prevailing grid-scale generation facilities.
Growing Integration of Renewable Energy Technologies to Boost BESS Demand
Different administrations have introduced substantial targets to augment the installation of clean energy storage technologies to foster the market for battery energy storage. BESS units are readily integrated into residential, commercial, and industrial-scale solar energy and wind energy generation methods to maintain the peak power usage supply. For example, in June 2020, the energy company BP published the Statistical Review of World Energy 2020 stated the global renewable power generation was equaled at 2,805.5 Terawatt-hours (TWh) in 2019, observing around 13.7% increase from 2,468.0 TWh in 2018.
Stringent Carbon Reduction Norms and Rising Peak Energy Demand to Propel Market Size
Rapid population outbursts across nations and new initiatives to propel the electrification rate, especially in remote areas, are likely to boost the demand for BESS units. Furthermore, a favorable policy framework to boost the deployment of low carbon technologies to curb the greenhouse gas (GHG) footprint is likely to add to the industry size. For example, in April 2021, the Prime Minister of Japan announced revising its carbon emission reduction goals to 46% by 2030 from the previous target of 26%, compared to the 2013 levels.
Significant Initial Investment May Hinder the Market Pace
Large-scale battery storage facilities are equipped with a high-power BESS unit which requires a substantial amount of initial expenditure that may obstruct the industry outlook. Furthermore, the rising rate of commercialization of alternate low carbon power generation technologies such as fuel cell systems powered with hydrogen fuel pumped hydro storage projects, and carbon fiber energy storage also diverts the investments from new projects impacting the battery energy storage market growth.
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Lithium-ion BESS Technology to Dominate the Industry Size
Based on battery type, the market can be majorly categorized into lithium-ion battery, lead-acid battery, flow battery, and others. The lithium-ion battery segment is projected to hold the leading position in terms of volume and value over the forecast period. Dedicated programs to reduce the overall installation and operational costs, high energy density, and quicker response time to emergencies are some of the key features promoting the adoption of the technology.
Flow batteries are also set to hold considerable growth owing to their diversified functioning capabilities, extended operational life, and enhanced safety characteristics, among other parameters. Furthermore, the efficient recycling process, long-standing installation acceptability, and new technological advancement initiatives are some of the key factors complementing the lead-acid batteries segment size.
On-grid Segment Size to Underpin Substantial Growth
Based on connectivity, the market for Battery Energy Storage can be primarily bifurcated into off-grid and on-grid. Continuous launch of expansion projects by various large and small scale utility companies is set to favor the on-grid BESS market size. Additionally, encouraging financial programs such as feed-in-tariff (FiT) schemes for different solar power generation systems to favor the off-grid segment outlook.
Utility Segment is Backed by Increasing Grid-expansion Plans and Large Power Generation Facilities
The four key segments present across this industry are based on application, residential, non-residential, Utility, and others. Encouraging directives to propel the installation of storage devices across solar power units and exponentially increasing solar power installation in homes are set to favor the residential segment size.
Growing electrification initiatives, the setup of new grid infrastructure, and the continuous rise in energy generation station networks are some of the key factors adding to the Utility application landscape. Furthermore, the non-residential BESS segment outlook is favored by the continuous establishment of new & advanced industrial and commercial infrastructure with growing concerns to maintain reliable power sources.
Customer Owned Segment to Observe Significant Growth over the Forecast Period
Based on ownership, the market for battery energy storage can be predominantly trifurcated into customer-owned, third-party-owned, and utility-owned. Mounting investments from the public and private utility organizations and government support is likely to add to the utility-owned BESS units demand.
Besides, the residential segment outlook is backed by the growing inclination of customers to integrate new renewable systems to enhance their grid independence to support peak energy demands. Furthermore, new collaborative efforts between various participants to set up various scale BESS networks and the rising number of independent power producers (IPPs) are set to complement the third-party-owned segment growth.
Asia Pacific Battery Energy Storage Market Size, 2020 (USD Billion)
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The market has been analyzed geographically across four main regions: Europe, North America, Asia Pacific, and the Rest of the World. Asia Pacific market size was estimated at USD 3.29 billion in 2020 and is anticipated to account for the lion’s share in terms of value and volume. Rapidly increasing renewable energy generation capacity, continuous rate of urbanization & industrialization, new electrification targets, and the presence of various industry players are some of the factors complementing the regional outlook.
Furthermore, favorable research & development initiatives to outline cost reduction plans, detailed BESS installation guidelines, and economic funding programs & rebates are some of the major parameters complementing the North American market. For instance, in February 2021, scientists from the United States National Renewable Energy Laboratory (NREL) declared to utilize advanced Machine-Learning (ML) techniques to fortify their horizons in comprehending innovative battery chemistries, materials, and cell designs. The complex algorithms from physics-based ML technology are projected to aid in the characterization of battery safety, lifetime, and performance.
Besides, the European market size is backed by the vast carbon reduction objectives by the regional authorities such as the European Commission along with national governments. The region is also supported by a wide range of encouraging renewable deployment objectives and energy security policies stimulating demand for BESS devices.
ABB is Concentrating on Acquiring New Contracts through its Branches to Fortify its Position
The global battery energy storage market is considerably divided into different players providing a variety of products, services, and solutions to maintain their position. Besides, the industry has also observed the introduction of new strategies by major global and regional participants and a wide number of small & medium scale system integrators.
ABB, a Swedish multinational conglomerate, is continuously striving to deliver its strong BESS products & solutions portfolio for different plants all across the globe. For instance, in May 2021, the company’s joint venture organization, Hitachi ABB Power Grids, declared a smart industrial park in Thailand with its innovative BESS units and controls technology. Battery storage and other distributed generation technologies such as rooftop and floating solar PV and co-generation gas turbines are set to be integrated to power 214 MW capacity collectively.
An Infographic Representation of Battery Energy Storage Market
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The global battery energy storage market research report offers an in-depth analysis of the industry. It further provides details on the adoption of BESS systems across several regions. Information on trends, drivers, opportunities, threats, and market restraints can further help stakeholders gain valuable insights into the market. The report offers a detailed competitive landscape by presenting information on key players and their strategies in the market.
Volume (MW) and Value (USD Billion)
By Battery Type; By Connectivity; By Application; By Ownership; and By Region
By Battery Type
Fortune Business Insights says that the global market size was USD 7.81 billion in 2020 and is projected to reach USD 26.81 billion by 2028.
In 2020, the region stood at USD 3.29 billion.
Registering a CAGR of 16.5%, the market is projected to exhibit staggering growth during the forecast period (2021-2028).
The on-grid connectivity segment is anticipated to hold the leading share in this market during the forecast period.
The increasing deployment of renewable energy, growing installation of residential solar systems, and rising concerns to enhance grid stability are some of the major factors driving the market growth.
Siemens Energy, ABB, Fluence, Total, Samsung SDI, and GE are the key players operating across the industry.
The Asia Pacific dominated the market in terms of share in 2020.
BESS devices are designed to integrate with different technologies to counter the demand during peak periods and ensure backup power needs. Consequently, the growing requirement to fortify the grid network with more extended duration backup & peak power demand is set to complement the deployment of advanced BESS units.
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