New York, July 11, 2023 (GLOBE NEWSWIRE) -- The global energy storage system market is expand at ~6% CAGR between 2023 and 2035. The market is expected to garner a revenue of USD 80 billion by the end of 2035, up from a revenue of ~USD 43 billion in the year 2022, owing to the increasing need for energy storage solutions that can store energy efficiently and effectively, as well as the growing demand for these systems that can be used in various applications such as residential, commercial, industrial, and transportation. Moreover, renewable energy sources, such as wind and solar, are unpredictable and require energy storage systems to store and release electricity as needed.
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Smart grids are also increasingly being adopted to manage energy demand more efficiently, and energy storage systems are needed to effectively manage the load. As such, government initiatives to promote the use of renewable energy sources and rising investments in smart grids are further expected to drive energy storage system market growth. In 2019, a total of USD 270 billion was spent on smart grids, with power equipment accounting for USD 120 billion of that total. Smart meters cost an estimated USD 20 billion. Smart grids are connected to a large number of distributed energy sources, such as solar and wind, and require energy storage to balance out the variability of these sources. Energy storage systems allow for the storage of energy when it is available and the release of energy when it is needed, thus providing a more reliable and efficient energy system.
Energy Storage System Market: Key Takeaways
- Market in Asia-Pacific region to grow at the fastest rate
- Pumped hydro storage segment to generate the highest growth over the next few years
- Energy Storage System Market in North America to propel at a highest growth
Growing Penetration of Hybrid and Electric Vehicles to Boost Market Growth
Increasing demand for electric vehicles across the globe is boosting the demand for batteries, as electric vehicles require a reliable and efficient source of energy in order to power them. Energy storage systems provide such a source, making them invaluable for electric vehicle owners. As the demand for electric vehicles increases, so too does the demand for energy storage systems. Moreover, to encourage the adoption of battery-powered and hybrid vehicles, governments in countries such as Canada and Japan provide tax incentives and subsidies to buyers of EVs. As a result, there has been a surge in the sales of electric vehicles, which in turn is expected to drive energy storage system market growth in the coming years. For instance, electric vehicle sales (EVs) doubled from 2019 to 6.5 million in 2021. Globally, electric cars accounted for nearly 10% of sales in 2021. Approximately 16.4 million electric cars are currently on the road worldwide. 2 million electric cars were sold globally in the first quarter of 2022, an increase of 75% over the same period in 2021. Moreover, electric vehicle (EV) batteries are becoming more efficient and cost-effective, which is a big driver for the energy storage systems market. As a result, EV batteries provide a reliable and cost-effective way to store and access energy, which is becoming increasingly important as more and more people move toward renewable energy sources such as solar and wind.
Energy Storage System Market: Regional Overview
The energy storage system market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Increasing Power and Electricity Consumption to Drive Market Growth in the Asia Pacific Region
The energy storage system market in the Asia Pacific region is estimated to garner the largest revenue by the end of 2035, backed by the increasing energy consumption across the region. For instance, the consumption of energy in China in 2022 increased by 3.5% over 2021, reaching 8,635 TWh. Moreover, the production of electricity in China also increased in 2022, reaching an estimated 8,400 TWh. Countries in the Asia-Pacific region have been experiencing rapid population growth, which has subsequently resulted in an increase in energy consumption. This has prompted countries to invest in energy storage systems to help combat the rising energy demands. Government initiatives to provide electricity in remote areas, coupled with the economic development of the region, are expected to create a need for reliable energy storage systems. Additionally, the increasing adoption of renewable energy in the region is expected to spur the demand for energy storage system in the coming years. Currently, China is the world's largest producer of solar and hydropower in the APAC region. IEA data shows that China contributes 40% of growth in renewable capacity. Furthermore, as businesses in the Asia Pacific region become more competitive and digitalized, they need reliable power sources to keep up with demand. Energy storage systems allow businesses to store energy when it is abundant and use it when needed, thus providing an efficient and uninterrupted power supply. This is expected to drive regional market growth in the coming years.
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Massive Urbanization and Growing Adoption of Renewable Energy Sources to Drive Market Growth in North America
The energy storage system market in the North American region is estimated to garner the highest CAGR by the end of 2035. Growing urbanization has increased the need for a reliable energy storage system that can help reduce the energy demand and carbon footprint of the region. In accordance with World Bank data, 83% of the population of the United States lives in urban areas. Smart electric meters and grids provide a way for the energy storage system to be optimized for maximum efficiency. This has resulted in the region investing heavily in the development of these systems, which is expected to drive significant growth in the regional market. Moreover, rural electrification under the Rural Electrification Act of 1936 and improved access to reliable energy sources are expected to contribute to regional market growth by reducing the energy gap between rural and urban areas. Increased government investments and initiatives are helping to incentivize more corporate entities to adopt renewable energy sources, which has resulted in an increased demand for energy storage systems such as batteries and fuel cells. This increased demand has resulted in the growth of the energy storage systems market in the North American region.
Energy Storage System Segmentation by Technology
- Pumped Hydro Storage
- Compressed Air
- Flywheel
- Redox-Flow
- Others
The pumped hydro storage segment is anticipated to hold the largest revenue by the end of 2035. Pumped hydro storage is one of the most cost-effective and reliable storage solutions available. It is also the most mature technology, with an energy efficiency of up to 80% and a long track record of successful commercial deployments. Additionally, it has the largest energy capacity and can be used for both short-term and long-term storage. This makes it ideal for a variety of applications, such as peak shaving, frequency regulation, and grid balancing. Moreover, the continuing investments in research and development in upgrading power infrastructures and grid capacity in regions such as North America and Asia Pacific are anticipated to drive segment growth in the future. For instance, U.S. power construction spending in 2021 exceeded USD 98 billion, which included projects such as electric transmission systems. Pumped hydro storage involves pumping water from a lower elevation reservoir to a higher elevation reservoir to store energy in the form of water. This stored energy can then be used to generate electricity when needed. It is one of the most cost-effective and reliable forms of energy storage and is used by both infrastructure and the commercial sector. As such, investments in upgrading the infrastructure and grid capacity are expected to increase demand for pumped hydro storage.
Energy Storage System Segmentation by End User
- Residential
- Non-Residential
- Utility
The residential segment is anticipated to hold the largest revenue by the end of 2035. Residential energy storage systems are becoming increasingly popular as they provide homeowners with a cost-effective and reliable way of storing energy. They also allow homeowners to benefit from lower electricity bills and a more reliable source of energy. Moreover, the increasing population and urbanization are driving the demand for residential projects, which require energy storage systems for efficient energy management and security. Approximately 1,645,000 housing units were authorized by building permits in the United States in 2022. A total of 1,390,000 housing units were expected to be completed in 2022, which represents an increase of 3.9% over the figure of 1,340,000 for 2021. Additionally, utility companies are increasingly recognizing the value of residential energy storage systems and are offering incentives and subsidies to homeowners who install them. This is expected to further drive the growth of the residential segment in the coming years.
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Energy Storage System Segmentation by Application
- Grid Storage
- Transportation
- Others
Energy Storage System Segmentation by Component
- Sodium Sulfur
- Lithium
- Lead Acid
- Nickel Cadmium
- Others
Few of the well-known market leaders in the global energy storage system market that are profiled by Research Nester are East Penn Manufacturing Inc., Showa Denko Materials, Co. Ltd., Electrovaya Inc., Langley Holdings plc, LG Chem Ltd., Hitachi, Ltd., The General Electric Company, Siemens AG, ABB Ltd, NEC Energy Solutions, Inc., and other key market players.
Recent Development in the Energy Storage System Market
- A significant equity investment has been made by LG Chem in North America's leading battery recycler, Li-Cycle. 20,000 tons of nickel will also be recycled over a ten-year period beginning in 2023 by LG Chem and LG Energy Solution. This will help reduce the environmental footprint of the battery industry, as well as reduce overall production costs.
- Electrovaya Inc. has entered into a strategic supply agreement with Raymond Corporation to supply Raymond Corporation's energy essentials battery line with battery systems. The agreement will allow Electrovaya to leverage its advanced battery technology to provide Raymond Corporation with reliable and cost-effective energy solutions.
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