Global energy storage markets will together grow 15-fold to 411GW (1.19TWh) by the end of the decade boosted by recent policy shifts in the US and Europe, although supply chain constraints might slow additions, according to the latest forecast from BloombergNEF (BNEF).
The research house sees 13% more capacity – 46GW (145GWh) – than previously estimated being built, given extra drive by the US Inflation Reduction Act (IRA), which has earmarked $369bn for clean technologies, and EU’s REPowerEU plan, which has raised ambitions to cut reliance on gas from Russia.
BNEF’s 2H 2022 Energy Storage Market Outlook estimates roughly 30GW (111GWh) of energy storage build through to 2030, although supply chain bottlenecks “cloud deployment expectations until 2024”.
In the utility-scale sector, significant storage additions expected from 2025 onwards align with raised renewable targets outlined in the REPowerEU plan and a renewed focus on energy security in the UK, according to BNEF, which has more than doubled its estimates for deployments in the second half of this decade across Europe.
In Europe, Russia’s invasion of Ukraine has impacted on energy storage developments with record electricity prices forcing consumers to consider new forms of energy supply, supporting near-term growth in the residential segment.
While scale-up of global energy storage capacity is imminent, BNEF cautions that supply chain hurdles remain an impediment for the industry.
On top of pandemic-related issues, inflation, high transport costs and raw material prices have made battery cells more expensive over the last year. Meanwhile, projects face long lead times to finance, develop, and commission.
So far in 2022, supply chain disruptions have resulted in lower utility-scale storage additions, said BNEF, noting that while a lot of these pressures would ikely ease next year, scaling up for a vastly larger market in 2030 “will certainly come with challenges”.
“The energy storage industry is facing growing pains. Yet, despite higher battery system prices, demand is clear,” said Helen Kou, lead author of the report and an energy storage associate at BNEF.
The US and China are set to remain the two largest energy storage markets through 2030, representing more than half of global installations.
“Europe, however, is catching up with a significant ramp-up in capacity fuelled by the current energy crisis,” said Kou.
Regionally, Asia Pacific will lead storage build on a megawatt-basis by 2030, with momentum underpinned by the rapidly scaling market in China. The Americas will add more capacity on a megawatt-hour basis as storage plants in the US usually have more hours of storage.
Africa, Europe, even with additional upside from recent policy advances, and the Middle East are all set to lag Asia Pacific and the Americas, according to BNEF.
The firm’s forecast suggests the majority of energy storage build by 2030, equivalent to 61% of total megawattage, will be to provide so-called energy shifting – advancing or delaying the time of electricity dispatch.
Co-located renewables-plus-storage projects, in particular solar-plus-storage, are becoming commonplace globally.
BNEF noted that rapidly evolving battery technology is also driving the energy storage market. Lithium-ion batteries presently account for the majority of installations, but many non-battery technologies are under development, such as compressed air and thermal energy storage.
Still, it expects that batteries will dominate the market at least until the 2030s, in large part due to their price competitiveness, established supply chain, and significant track record.
“If new technologies can successfully outcompete lithium-ion, then total energy storage uptake may well be larger,” said Kou.