Several companies in the energy sector are striving to launch advanced technologies to fulfill the ever-increasing electricity demand across several end-user industries worldwide. Moreover, the constantly soaring levels of Green House Gas (GHG) emissions have resulted in the increased adoption of a low carbon system for power generation, i.e., energy storage system.
Energy storage systems are amongst the key components of clean energy generation. They are a series of modular blocks that can store energy produced from renewable sources with greater efficiency. Renewable power is gaining immense popularity and is becoming one of the crucial parts of the world’s energy mix. Hence, rapid developments in new renewable power capacities worldwide are driving the need for energy storage systems.
The Global Energy Storage Market is anticipated to grow at a CAGR of around 5.5% during the forecast period, i.e., 2021-26. The mounting demand for continuous power supply & energy storage systems in residential, commercial, & industrial infrastructures is the most prominent factor driving the energy storage market. In addition to this, rising efforts for grid modernization and snowballing adoption of grid energy storage solutions also boost the market. The increasing usage of lithium batteries in energy storage systems owing to their excellent features is among other crucial factors augmenting the market growth.
According to International Energy Agency (IEA), the total investment in energy storage spurred by around 40% to USD 5.5 billion in 2020. Due to the surge in renewable investments in grid-scale batteries increased by more than 60%. However, due to the Covid-19 pandemic, investments in behind-the-meter storage fell by around 12% since they were mainly through small companies & households.
|Study Period||Historical Data: 2016-19|
|Base Year: 2020|
|Forecast Period: 2021-26|
|Regions Covered||North America: US, Canada, Mexico|
|Europe: Germany, UK, France, Netherlands|
|Asia-Pacific: China, India, Japan, South Korea, Australia|
|Key Companies Profiled||Greensmith Energy (Wartsila), NEC Energy Solutions Inc., Fluence Energy LLC, Contemporary Amperex Technology Co. Limited, Convergent Energy and Power LP (Energy Capital Partners), Tesla Inc., LG CNS, Duke Energy Corporation, NextEra Energy Inc., etc.|
|Unit Denominations||USD Million/Billion|
Moreover, the market is experiencing lucrative growth owing to the continuously increasing demand for energy storage systems based on renewable resources. Furthermore, the surging inclination towards electrification in the transportation sector is also paving the way for a significantly growing demand for energy storage systems in the coming years. Moreover, the rapid expansion of the electric vehicle industry also promotes the use of battery energy storage systems and contributes to the overall market growth.
Rapid transformations in the power sector due to rising concerns over climate changes & the volatility of fuel import prices have facilitated the proliferation of renewable energy sources worldwide. Therefore, increasing adoption of renewables and the need to decarbonize end-user verticals like the transport and building & construction sectors are likely to encourage the usage of energy storage technologies to develop a sustainable & resilient power network.
Impact of Covid-19 on the Global Energy Storage Market
The Covid-19 pandemic in 2020 severely affected several nations across the globe in an unprecedented manner. The abruptly rising number of Covid-19 cases drastically impacted the economies of different countries, and the Global Energy Storage Market was no exception. The imposition of lockdown & stringent movement restrictions to curb the spread of disease significantly impacted the global supply chain logistics of the market. The major components of energy storage systems are manufactured mainly in Asia-Pacific, especially in China. As a result, the pandemic exposed the over-dependency on the region for key raw materials and, in turn, consequently affected the market growth.
Besides, the leading market players faced several challenges associated with the transportation of raw materials and deliveries of end-products. The global pandemic put a temporary halt on the production of energy storage systems, which, in turn, led to their increased prices & reduced market growth.
However, with the ease of norms, the market is rapidly resuming to normal and experiencing a steady expansion, especially across the industrial sectors. In the coming years, the demand for energy storage systems across different end-user verticals shall significantly upsurge owing to various government initiatives towards promoting the adoption of renewables.
Of them all, Lithium Batteries hold the largest share in the Global Energy Storage Market. The lightweight & low-maintenance lithium-ion batteries are experiencing burgeoning demand in the market, owing to their better efficiency, lower prices, higher energy density & voltage capacity, and lower self-discharge rate than other batteries. Due to these excellent properties, Lithium batteries are being used commonly in electric vehicles & portable electronics.
Moreover, the surging need for heavy-duty vehicles for infrastructural developments and the mounting adoption of electric vehicles are other crucial aspects fueling the demand for lithium batteries in energy storage systems. In addition, the rising inclination of governments of different countries worldwide towards promoting the use of e-buses & hybrid vehicles to reduce carbon emissions shall also accelerate the demand for lithium batteries for energy storage systems in the coming years.
Here, the Utility sector accounts for the largest share in the Global Energy Storage Market, owing to the rising efforts toward modernizing grid infrastructures, increasing plans for electrification, and the surge in energy generation station networks. Besides, the surging demand for energy storage in the utility sector has led to a wide spectrum of application developments for advanced batteries.
On the other hand, the commercial & industrial sectors are increasingly adopting renewable power generation sources like solar & wind energy. However, renewable energy is an intermittent power source, and these sectors are not utilizing these resources to their fullest potential.
As a result, to increase the utilization rate of renewable power sources, they are anticipated to adopt intelligent energy storage systems in the future owing to their declining costs & increasing resilience, which, in turn, would create lucrative growth opportunities for the global market during 2021-26. Furthermore, the exponentially increasing solar power installations in homes shall favor the increasing demand for energy storage systems in the residential sector over the forecast years.
Key Trends in the Global Energy Storage Market
With growing energy demand across developed & emerging nations, coupled with rapid energy transition from fossil-based energy systems to renewable energy sources, are expected to positively influence the Global Energy Storage Market growth in the coming years. In addition to this, increasing integration of new power generation technologies and renovating existing infrastructure to augment the energy output shall also offer profitable opportunities for new grid systems with effective backup & peak load characteristics. Furthermore, with the aging of electric infrastructure, there's an increasing need for grid modernization to make it smart & more resilient.
Globally, of all regions, Asia-Pacific acquires the largest share in the Energy Storage Market and is likely to maintain its dominance in the market during the forecast period. Asia-Pacific is the hub for energy storage system production & utilization, owing mainly to China, i.e., rapidly transiting from demonstrated projects to commercially operating energy storage systems. Several electrification plans are proposed across the remote areas of various nations that are majorly off-grid.
Using energy storage systems in Asia-Pacific's residential areas shall surge the electricity access for these remote communities across the region. Besides, governments of different countries with developing economies are making new norms to improve the reliability & quality of power distribution facilities, which would result in substantial investments in the energy storage industry and boost the regional market over the forecast years.
On the other hand, in Europe, the energy storage market is expected to experience substantial growth over the forecast years, owing to regional authorities like the European Commission increasingly adopting battery energy storage systems to promote the use of renewable energy sources and reduce dependency on fossil fuels. In addition, Europe is supported by massive deployment objectives and energy security policies regarding renewable energy generation, thereby witnessing increasing demand for energy storage systems.
Key Driver: Integration of Renewable Energy Technologies into Storage Systems and Stringent Carbon Emission Norms
Various nations across the globe are promoting the installation of clean energy storage technologies that are likely to drive the energy storage market. The energy storage units are integrated into the residential, industrial, & commercial sectors to maintain peak power usage supply. Furthermore, with the growing population, governments worldwide are taking various initiatives for increasing electrification. Also, with a favorable policy framework toward fueling the establishment of low carbon technologies to curb Green House Gas (GHG) footprints, the market shall expand significantly in the years to come.
Possible Challenge: Significant Initial Investments associated with Energy Storage Systems
Deploying large-scale battery storage facilities requires a significant amount of initial investment. As a result, the rapid adoption of alternate low-carbon power generation technologies like carbon fiber energy storage and the fuel cell might restrain investments in energy storage projects and negatively impact the market growth during 2021-26
According to MarkNtel Advisors’, the key players with a considerable market share in the Global Energy Storage market include Greensmith Energy (Wartsila), NEC Energy Solutions Inc., Fluence Energy LLC, Contemporary Amperex Technology Co. Limited, Convergent Energy and Power LP (Energy Capital Partners), Tesla Inc., LG CNS, Duke Energy Corporation, NextEra Energy Inc. etc.
Key Questions Answered in the Market Research Report:
Market Outlook, Segmentation and Statistics
Frequently Asked Questions
A. The Global Energy Storage Market is forecast to grow at a CAGR of around 5.5% during 2021-26.
A. The Utility sector holds the largest share in the Global Energy Storage Market, and it would create remunerative growth opportunities for the leading market players in the coming years.
A. The mounting demand for clean energy storage systems and stringent carbon emission norms are the key factors projected to drive the Global Energy Storage Market during 2021-26.
A. In the coming years, the Global Energy Storage Market is expecting lucrative growth, owing primarily to the increasing energy demand from the industrial sector.