Advanced Energy Storage Systems (AESS) Market Analysis APAC, Europe, North America, South America, Middle East and Africa - US, China, Japan, Germany, France - Size and Forecast 2023-2027

Advanced Energy Storage Systems (AESS) Market Forecast 2023-2027

The advanced energy storage systems (AESS) market size is estimated to increase by USD 6.70 billion and grow at a CAGR of 8.52% between 2022 and 2027. The growth of the market depends on several factors, such as the growing adoption of renewable energy sources, increasing demand for stable and reliable power supply, and inclination toward energy independence. The growing implementation of wind and solar photovoltaic (PV) installations highlights the need for sophisticated energy storage options to tackle the intermittent nature of these sources. Battery energy storage, mechanical technologies, and thermal energy storage (TES) systems are pivotal in maintaining grid reliability and optimizing the utilization of renewables, all while curbing greenhouse gas emissions.

What will be the size of the Advanced Energy Storage Systems Market During the Forecast Period?

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Segmentation

This market report extensively covers market segmentation by application (grid storage and transportation), end-user (non-residential and residential), and geography (APAC, Europe, North America, South America, and Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

By Application

The grid storage segment is estimated to witness significant growth during the forecast period. The increasing use of renewable energy sources and the need for reliable power supply are growing the demand for grid-scale storage solutions. Technologies such as lithium-ion batteries, flow batteries, and compressed air energy storage are gaining importance due to their ability to store excess energy when demand is low and release it again when usage is high.

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The grid storage segment was the largest segment and was valued at USD 6.04 billion in 2017. As utilities and governments around the world prioritize system stability and decarbonization, energy storage system technology is poised to play a key role in transforming the energy landscape, promoting sustainability, and alleviating concerns about electricity supply. Hence, such factors are expected to increase the acceptance in grid storage applications, thereby driving the growth of the market during the forecast period. 

By Regions

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APAC is estimated to contribute 36% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. In APAC, the market is experiencing strong growth driven by energy storage modernization and sustainability promotion. At the forefront of this trend are countries such as China, Japan, South Korea, and India.

Besides, the regional market is dominated by lithium-ion batteries, with major players such as CATL, Panasonic, and LG Chem. Innovative alternatives to batteries are becoming popular, such as China's Three Gorges Dam pumped-storage power plant and Japan's flywheel energy storage project. Furthermore, aggressive government initiatives, ambitious renewable energy targets, and a focus on energy security will drive the market in APAC to grow even more rapidly, providing significant support for sustainable energy during the forecast period. 

Market Dynamics and Customer Landscape

The market is experiencing remarkable growth, driven by the surge in renewable energy adoption and the rapid expansion of the global electric vehicle industry. As emphasized by the International Energy Agency (IEA), the market is witnessing increased deployment of wind and solar photovoltaic (PV) systems alongside advancements in battery energy storage technology. From microgrid to on-grid energy distribution infrastructure, diverse solutions like electrochemical and thermal technology are being employed, bolstering the battery energy storage industry. With innovations in mechanical and electrochemical technology, coupled with the growing demand for plug-in electric vehicles (PHEVs), the market is poised for substantial growth, offering solutions for grid storage and reducing greenhouse gas emissions through stored energy potential from various renewable sources such as vanadium redox and pumped hydro storage. Our researchers analyzed the data with 2022 as the base year and the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Market Driver

The market is experiencing rapid growth, propelled by the escalating adoption of renewable energy sources worldwide, particularly in the global electric vehicle industry. The increasing deployment of wind and solar photovoltaic (PV) systems necessitates advanced energy storage solutions to address intermittency challenges. Battery energy storage, mechanical technology, and thermal energy storage (TES) systems play crucial roles in ensuring grid stability and maximizing the utilization of renewable sources while reducing GHG emissions. Technologies like pumped hydro-storage and vanadium redox enhance stored energy potential and overall system efficiency, catering to diverse applications in buildings and microgrid infrastructure. With a focus on reducing carbon footprints and enhancing grid resilience, the market for advanced energy storage systems is poised for significant expansion, driven by the imperative for sustainable energy solutions.

Significant Market Trends

The increasing dominance of lithium-ion batteries is the primary trend shaping the growth of the market. Due to their excellent energy density, lithium-ion batteries can store large amounts of energy in small units, meeting the growing need for effective and space-saving solutions. Lithium-ion batteries have become more economical for a variety of applications over time due to improved manufacturing processes, economies of scale, and scientific advances.

Moreover, extensive applications in areas such as consumer electronics, renewable energy integration, and electric vehicles (EVs) have proven the adaptability and reliability of lithium-ion batteries. For example, Tesla's Gigafactory will significantly reduce the cost of manufacturing lithium-ion batteries, enable widespread deployment of electric vehicles and large-scale energy storage projects, and are expected to drive the growth of the market during the forecast period.

Major market challenge

High initial costs and uncertainty regarding the long-term returns is a challenge that affects the growth of the market. Potential users are deterred by the large upfront costs of infrastructure, equipment, and research required to deploy a new storage system. For example, despite the widespread use of lithium-ion battery systems, complex manufacturing processes and high raw material costs result in high set-up costs.

Furthermore, it is difficult for stakeholders to accurately predict the economic benefits of these systems over their lifetimes, as changing market dynamics, technological advances, and changes in energy policies contribute to the uncertainty of return on investment. is. The growth of the market is hampered by this financial ambiguity, hindering organizations in both the public and private sectors from engaging in widespread adoption. Therefore, high initial cost and economic viability are expected to create challenges for the growth of the market during the forecast period. 

Market Customer Landscape

The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Market Customer Landscape

Who are the Major Advanced Energy Storage Systems Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

TotalEnergies SE: The company offers advanced energy storage systems, such as Intensium Energy Storage Systems, through its subsidiary Saft Group.

The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• ABB Ltd.
• Aquion Energy
• BYD Co. Ltd.
• Dow Chemical Co.
• EOS Energy Enterprises Inc.
• General Electric Co.
• GS Yuasa Corp.
• Hitachi Ltd.
• Leclanche SA
• LG Chem Ltd.
• NEC Corp.
• Panasonic Holdings Corp.
• S and C Electric Co.
• Samsung SDI Co. Ltd.
• Siemens AG
• Tesla Inc.
• Toshiba Corp.
• Trane Technologies Plc
• Wartsila Corp.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Application Outlook 
  • Grid storage
  • Transportation

• End-user Outlook 
  • Non-residential
  • Residential

• Region Outlook 
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • South America
    • Chile 
    • Brazil 
    • Argentina
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa

Market Analyst Overview

The market is experiencing remarkable growth, driven by the increasing adoption of renewable energy sources like wind and solar photovoltaic (PV) systems. The rise of the battery energy storage industry and innovations in electrochemical technology are reshaping the landscape, with mechanical and thermal technology also playing significant roles. Emerging technologies such as solid-state batteries and vanadium redox are enhancing stored energy potential and contributing to the transition towards a low-carbon economy. Moreover, advancements in grid modernization and microgrid infrastructure are bolstering the market, addressing challenges related to GHG emissions and overall efficiency while meeting the demands of emerging economies for sustainable energy solutions.

The market is witnessing remarkable growth, driven by advancements in electrochemical (battery) energy storage technology and mechanical solutions such as flywheels and compressed air storage. With the rise of renewable energy sources like wind power and plug-in electric vehicles (PHEVs), there's a growing need for efficient energy storage solutions like lithium-ion (Li-ion) batteries and thermal energy storage (TES) systems. Regulatory frameworks and initiatives like the Stable Tactical Expeditionary Electric Power (STEEP) program by GM Defense and the Department of Defense (DoD) further drive innovation in microgrid and grid-level energy storage systems, ensuring reliable power generation and reducing carbon footprint. From sensible heat storage (SHS) to flow batteries, the market offers diverse solutions to meet evolving energy needs sustainably.

The International Energy Agency (IEA) has been a key player in shaping the global energy landscape, advocating for sustainable practices and innovative solutions. One area receiving increasing attention is the development of microgrid and on-grid energy distribution infrastructure. These systems offer decentralized energy management, enhancing resilience and efficiency in the face of growing energy demands and evolving grid dynamics. Within this framework, the electrochemical (battery) energy storage market has emerged as a critical component. Batteries enable the storage of excess energy generated from renewable sources such as solar power, addressing intermittency issues and facilitating smoother integration into the grid.

Furthermore, pumped hydro-power systems provide a proven method for large-scale energy storage, leveraging gravitational potential to store and release energy as needed. Entities like the Defense Innovation Unit (DIU) are actively involved in fostering technological advancements in this realm. By leveraging their expertise, DIU accelerates the deployment of innovative solutions, ensuring energy security and resilience across various sectors. Microgrids, equipped with sophisticated control systems, offer localized energy management solutions, enabling communities and industries to harness renewable-generated electricity efficiently. Lead-acid batteries, though traditional, still find applications in certain contexts, complementing the evolving landscape of electrochemical energy storage devices.

Moreover, the rise of commercial electric-drive vehicles presents opportunities for synergies between transportation and energy sectors. These vehicles can serve as mobile energy storage units, contributing to grid stability and resilience during peak demand periods. Innovation continues to drive the evolution of hybrid energy systems, combining diverse technologies to optimize energy generation, storage, and distribution. As the world transitions towards a more sustainable energy future, collaboration between public and private sectors remains essential in unlocking the full potential of these transformative technologies.

Advanced Energy Storage Systems Market Scope
Report Coverage	Details
Page number	166
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 8.52%
Market growth 2023-2027	USD 6.70 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	8.32
Regional analysis	APAC, Europe, North America, South America, and Middle East and Africa
Performing market contribution	APAC at 36%
Key countries	US, China, Japan, Germany, and France
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	ABB Ltd., Aquion Energy, BYD Co. Ltd., Dow Chemical Co., EOS Energy Enterprises Inc., General Electric Co., GS Yuasa Corp., Hitachi Ltd., Leclanche SA, LG Chem Ltd., NEC Corp., Panasonic Holdings Corp., S and C Electric Co., Samsung SDI Co. Ltd., Siemens AG, Tesla Inc., Toshiba Corp., TotalEnergies SE, Trane Technologies Plc, and Wartsila Corp.
Market dynamics	Parent market analysis, Market forecasting, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period.
Customization purview	If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2023 and 2027
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about vendors
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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