Advanced Energy Storage Market is Estimated to Witness High Growth Owing to Increasing Adoption of Renewable Energy Sources
The global advanced energy storage market is estimated to be valued at US$ 21.85 Bn in 2024 and is expected to exhibit a CAGR of 9.8% over the forecast period 2024 to 2031.
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Advanced energy storage plays a vital role in allowing efficient use of renewable energy sources by storing energy to be used later when the renewable source is unavailable. Battery energy storage helps balance the fluctuations arising due to intermittent nature of renewable energy resources such as solar and wind. It allows surplus renewable energy generated during off-peak hours to be stored and used later thereby improving power grid flexibility and reliability.
The global advanced energy storage market is estimated to be valued at US$ 21.85 Bn in 2024 and is expected to exhibit a CAGR of 9.8% over the forecast period 2024 to 2031.
Key Takeaways
Key players operating in the advanced energy storage are ABB Ltd., LG Chem, Ltd., Samsung SDI Co., Ltd, General Electric Company, and Tesla Inc. These players are focused on developing innovative battery technologies and large-scale battery energy storage solutions to gain a competitive edge in the market.
The increasing installation of solar PV and wind farms across regions presents significant opportunities for advanced energy storage systems to store excess renewable energy and ensure grid reliability. Government initiatives promoting the usage of clean energy sources also augment the demand for energy storage solutions.
Technological advancements in battery chemistries such as solid-state batteries and development of recycling processes for used batteries are expected to boost the adoption of energy storage systems and drive the market growth over the forecast period.
Market Drivers
Favorable government policies and regulations providing financial incentives for integrating renewable energy with energy storage systems are a key driver for the Advanced Energy Storage Market Demand. With rising concerns about environmental pollution, many countries have formulated supportive policies encouraging investment in clean energy projects. Growing focus on decarbonization of energy generation and reduction of CO2 emissions will further accelerate the deployment of advanced energy storage technologies.
The increasing price competitiveness of renewable energy coupled with declining costs of lithium-ion batteries is prompting abundant adoption of battery energy storage in both on-grid and off-grid applications. As the levelized cost of energy from battery storage is below diesel-generated power, it promotes the widespread installation of renewable energy integrated with energy storage. This is expected to propel the advanced energy storage market during the forecast period.
Current Challenges in Advanced Energy Storage Market
The advanced energy storage market share is witnessing significant growth. However, there are a few challenges that are slowing down the growth pace. High initial installation costs make energy storage solutions unviable for small-scale users. The costs need to reduce significantly to make energy storage accessible for residential and small commercial establishments. Secondly, the energy density of current battery technologies is relatively low. This restricts the usability of batteries, especially for transportation. Battery life is another area of concern. Frequent charging/discharging cycles reduce the battery life over time. Improving cycle life without increasing costs is a technological challenge. Safety also poses risks, as thermal runaways can cause battery fires. Strict quality control and designs addressing safety are required to boost adoption.
SWOT Analysis
Strength: Rapidly declining battery costs and improving performance are making energy storage economically viable. Also, supportive government policies and regulations boost the industry.
Weakness: Current battery technologies have low energy density and short lifespans, limiting applications. High upfront capital costs also restrict market growth.
Opportunity: Increasing demand for intermittent renewable integration and need for reliable backup power drives market opportunities. Also, electric vehicles and adoption of microgrids offer scope for energy storage solutions.
Threats: Limited recyclability of batteries poses environmental risks. Traditional energy players can pose competition with new business models. Emergence of newer disruptive technologies can negatively impact established battery technologies.
Geographical Regions
North America accounts for the largest share in the advanced energy storage market currently, both in terms of volume shipped as well as value. This is attributed to supportive federal and state policies promoting clean energy solutions. China has emerged as the second largest and fastest growing regional market, driven by the world's largest investments in renewable installations coupled with efforts to develop domestic battery champion companies.
Fastest Growing Region
Asia Pacific region, exclusing China and Japan, is projected to witness the highest CAGR during the forecast period in the advanced energy storage market. This can be attributed to renewable integration targets in countries like India, extensive urbanization increasing demand for reliable backup power solutions, and initiatives towards developing local battery manufacturing capabilities.
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Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. (https://www.linkedin.com/in/ravina-pandya-1a3984191)
