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The grid-scale battery market size is estimated to grow by USD 12.25 billion at a CAGR of 20.88% between 2023 and 2028. The market's growth hinges on several key factors, notably the increasing demand for Energy Storage Systems (ESSs) from utilities, driven by the imperative for reliable power supply. Additionally, the growing emphasis on renewable power generation amplifies the need for efficient energy storage solutions to manage intermittency. Moreover, rising urbanization and escalating electricity demand propel the adoption of ESSs to ensure grid stability and meet the power needs of burgeoning urban populations. These converging trends underscore the pivotal role of ESSs in enabling sustainable energy infrastructure and facilitating the transition towards a greener, more resilient power grid.
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The market experiences robust growth propelled by investments in renewable energy, driving expanded deployment of energy storage solutions. Grid-scale batteries, including lead acid, nickel-cadmium, and nickel metal-hydride variants, offer high energy and power density, addressing the increasing demand for energy efficiency. Challenges persist, however, with costs of grid-scale batteries and ownership models like utility-owned or third-party-owned facing scrutiny. Moreover, ensuring overall grid stability remains a challenge, despite incentives encouraging adoption. Overcoming these hurdles while leveraging emerging technologies is vital for sustaining the momentum of grid-scale battery market growth.
Rising urbanization and electricity demand are notably driving the market growth. The rise in population, improvement in living standards, and the availability of better facilities and infrastructure are leading to rapid urbanization. As of May 2020, more than half of the world's population was residing in urban areas, and it is expected that more than two-thirds of the world population will be living in urban areas by 2050. The population in urban areas is growing widely in underdeveloped and developing countries. Urbanization is extremely dependent on several macroeconomic factors, such as national policymaking, governments, and development practitioners.
Moreover, the rise in power consumption creates a need for grid-scale ESSs for frequency regulation and for power backup. This will proliferate the sales of grid-scale batteries and storage systems for energy storage. Therefore, the rise in urbanization and electricity demand will significantly drive the growth of the market during the forecast period.
Declining costs of battery storage systems are an emerging trend shaping the market growth. Batteries are one of the most widely used ESSs around the world. Declining price is a key factor for the increased adoption of ESSs. The costs of battery systems have been reduced since 2010. The price reduction is due to the improvements in hardware, economies of scale, and the standardization of system design and engineering. With the increase in sales, economies of scale have increased, and consequently, the prices of battery systems have been reduced. By 2030, the cost of lead-acid battery-based ESSs will be reduced to half of the cost in 2020.
Also, by 2030, the costs of flow batteries, sodium-sulfur batteries, and lithium nickel cobalt aluminium battery-based ESSs will be reduced to 34%, 44%, and 41%, respectively, of the cost in 2020. The declining costs of battery systems will increase the sales of battery-based ESSs in utilities, which will drive the growth of the global market trends during the forecast period.
Growing competition from fuel cells is a significant challenge hindering market growth. In the past few years, fuel cells have witnessed high adoption in stationary applications. Fuel cells have emerged as a reliable and efficient alternative technology for electricity generation and other prime power applications, as they can supply power and heat with high efficiency. Several governments are also supporting fuel cell adoption through various initiatives and regulations. For instance, the South Korean government is promoting the use of clean, renewable, and alternative sources. In January 2019, the country released its hydrogen economy roadmap, which included a target of 1.5 GW of power generation by 2022 and 15 GW by 2040 using fuel cells. Such projects focus on overcoming technical challenges related to non-precious metal catalysts, fuel cell membranes, reversible fuel cells, and electrolyzes during the production of hydrogen.
Similarly, In July 2020, the US Department of Energy (DOE) issued funding of USD 64 million for 18 projects that will support the H2@Scale vision for affordable hydrogen production, storage, distribution, and use. The US DOE's H2@Scale concept focuses on enabling the affordability and reliability of large-scale hydrogen generation, transport, storage, and utilization across multiple sectors in the US. Therefore, growing investments in fuel cell technology will boost its applications in grid-scale power storage and will subsequently affect the growth of the market during the forecast period.
The market growth analysis 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 market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
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.
ABB Ltd. - The company offers a grid-scale battery energy storage system to support the integration of renewable energy sources for Universal Power Solutions Inc.
The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
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.
Investments in renewable energy have catalyzed the growth of the market, with a significant focus on enhancing energy efficiency and overall grid stability. The market sees expanded deployment of various battery types, including lead acid, nickel-cadmium, nickel metal-hydride, and nickel-iron batteries. These batteries offer high energy and power density while being lightweight, addressing concerns related to weight and standby losses. Ownership models such as utility-owned and third-party-owned models are gaining traction, driven by incentives and the highest rate of return. With their long life expectancy, grid-scale batteries play a crucial role in ensuring reliable energy storage for renewable power generation and grid stability initiatives.
The ancillary services segment is estimated to witness significant growth during the forecast period. Ancillary services refer to the range of support services required to maintain the stability and reliability of the electric grid. These services are crucial for managing imbalance in electricity supply and demand, maintaining frequency and voltage stability, and ensuring grid resilience.
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The ancillary services segment was the largest segment and was valued at USD 2.61 billion in 2018. Grid-scale batteries can also serve as backup power sources during grid outages or emergencies. These batteries can quickly supply electricity to critical loads, ensuring uninterrupted power supply to essential services such as hospitals, data centres, and data emergency response centres. Thus, increasing demand for renewable energy integration, grid modernization efforts, rising demand for reliable power supply, and supportive government regulations, coupled with the expanding deployment of grid-scale batteries, will fuel the growth of the global market through the ancillary services segment during the forecast period.
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APAC is estimated to contribute 52% 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 expected to grow rapidly during the forecast period owing to the rising energy demand driven by the growth of the population. Owing to the rapid depletion of conventional power sources such as fossil fuels, APAC countries have started using renewables for power generation. The adoption of microgrids has increased in APAC due to the growing adoption of renewable-energy power plants and the lack of reliable grid infrastructure. Microgrids are used by utilities to increase resilience. With the help of battery energy storage, microgrids can utilize the stored power for the electrification of the area where the microgrid is installed. The increasing installation of microgrids in the region is driving the growth of the market in APAC.
Furthermore, Japan is significantly contributing to the growth of the regional market. In August 2021, Tesla announced its entry into the Japanese market with its energy storage products, starting with a 6-MWh megapack project in Japan's northern island of Hokkaido. Thus, the above-mentioned projects and increasing demand for power storage solutions will drive the growth of the market in APAC during the forecast period.
The market forecasting report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market witnesses dynamic growth driven by technological advancements and government subsidies, fostering the adoption of lithium-ion, sodium-based, and other batteries. Lithium-ion batteries, renowned for their lightweight and high energy density, dominate the market share, alongside emerging options like nickel-iron batteries. These batteries offer advantages such as standby losses reduction and extended life expectancy, enhancing grid reliability and resiliency. They facilitate effective load control and enable load shifting, supporting integration with diverse renewable energy resources like solar photovoltaic and wind power. With growing demand for clean energy, grid-scale batteries play a pivotal role in power system flexibility and energy storage, addressing challenges such as renewable energy curtailment and timing discrepancies in electricity prices.
Additionally, the market boasts various key factors driving its growth, including its largest share in energy storage resources and its advantageous ownership models, such as utility-owned and third-party-owned arrangements. With a focus on grid resiliency and the integration of diverse resources, grid-scale batteries address increasing product demand and generate substantial revenue. They offer advantages like energy arbitrage and facilitate cost-effective renewable energy generation, reducing reliance on conventional generators. Emerging technologies like zinc-hybrid and sodium-based batteries enhance power capacity rating and energy capacity, enabling peak shaving and seamless integration of renewable sources, ensuring a sustainable and efficient energy landscape.
Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 20.88% |
Market Growth 2024-2028 |
USD 12.25 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
20.23 |
Regional analysis |
APAC, North America, Europe, South America, and the Middle East and Africa |
Performing market contribution |
APAC at 52% |
Key countries |
US, China, India, Australia, and South Korea |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
ABB Ltd., BYD Co. Ltd., Contemporary Amperex Technology Co. Ltd., General Electric Co., GS Yuasa International Ltd., Hitachi Ltd., Innolith Science and Technology GmbH, Leclanche SA, LG Electronics Inc., NEC Corp., NGK Insulators Ltd., Panasonic Holdings Corp., Powin Inc., Samsung SDI Co. Ltd., Siemens AG, SolarEdge Technologies Inc., Sumitomo Electric Industries Ltd., Tesla Inc., Toshiba Corp., and TotalEnergies SE |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our market 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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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Battery Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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