The global battery energy storage market is forecast to grow to US$13.13bn by 2023. According to GlobalData, the Asia Pacific (APAC) and EMEA regions will be the dominant markets for battery energy storage systems over the forecast period 2019-2023. The company’s latest report ‘Battery Energy Storage Market, Update 2019 – Global Market Size, Competitive Landscape and Key Country Analysis to 2023’ reveals that the fall in technology prices and increasing pace of development in the power market are the primary driving factors for the battery energy storage market.
APAC will continue to be the largest market reaching US$6.05bn in 2023, as countries are increasing investments for improving their grid infrastructure and improving the market structure to attract foreign investments. As regards technology, lithium-ion is and will continue to be, the preferred technology for market deployment.
The US has been the largest market for Battery Energy Storage Systems (BESS) both in terms of cumulative installed capacity and by market value for projects installed up to 2018 and is likely to continue to lead the market at country level. The US market for battery energy storage is estimated to reach US$2.96bn in 2023, accounting for 23% of the global market.
Asia Pacific was the largest BESS market in 2018, accounting for 45% of the global market installed capacity and the region is also expected to maintain its top position in the forecast period. With the number of grid-connected renewable electricity generation plants increasing tremendously, countries such as China, India, Japan, South Korea and the Philippines will focus on frequency regulation in the electric grid to normalise the variation in power generation from renewables.
The EMEA battery energy storage market registered a market value of approximately US$1.73bn in 2018, accounting for 26% of the global market. The region has a strong demand for flexibility, due to technological advancements, evolving market conditions, strong research facilities and supportive policies. The Middle East and Africa are small markets with demand for storage expected to increase once renewable power generation gains significant traction in the market.
The battery energy storage market in the Americas registered a market value of approximately US$1.97bn in 2018, accounting for 28% in 2018. This region’s market is growing, with countries such as the US, Chile, Canada and Brazil promoting battery storage installations across consumer segments. Some US states have robust incentive programs, most notably California, which adopted an ambitious target for 1.3 GW of energy storage by 2020, which it has already surpassed with a new target awaiting approval.
With countries aggressively promoting the modernisation of grids and developing their capability to handle present and future demands, batteries are being deployed to support smart grids, integrate renewables, create responsive electricity markets, provide ancillary services and enhance both system resilience and energy self-sufficiency. Given this situation, the BESS market, which is estimated at 4.9 GW in 2018, is forecast to reach 22.2 GW by 2023.
Market conditions are improving and more companies are moving towards decentralised generation, leading to an increase in the on-site deployment of renewables and batteries, as well as in micro- or mini-grids. Supportive policies and high electricity charges are also nudging the market towards renewables and/or storage plus renewables at end consumer level.
As the power sector evolves to accommodate new technologies and adapt to varying market trends, energy storage will play a central role in the transition and transformation of the power sector.