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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 has experienced significant technological advancements in recent years, leading to expanded deployment of various battery types for energy storage. Regulations play a crucial role in shaping the market, with a focus on energy efficiency and reducing standby losses. Lithium-ion batteries currently hold the largest share of the market during the forecast period due to their lightweight design and high efficiency. However, other batteries such as lead acid, flow, sodium-based, nickel-cadmium, nickel metal-hidride, and nickel-iron batteries also contribute to the market. The ownership model is another key factor, with utility-owned and third-party-owned models having the highest rate of adoption. Renewable energy sources, particularly solar and wind, require battery storage for overall grid stability. Incentives from governments and regulatory bodies further drive the market. The choice of battery technology depends on various factors, including life expectancy, efficiency, weight, and cost. Battery storage is essential for ensuring a reliable and sustainable energy grid.
Rising urbanization and electricity demand are notably driving the market. The market is experiencing significant growth due to technological advancements and expanded deployment of energy storage solutions in the utility sector. Utilities are increasingly turning to energy storage to balance electricity demand during peak and off-peak hours, reduce electricity costs, and optimize the use of intermittent renewable energy sources such as solar and wind power. Government subsidies, regulations, and incentives are driving the adoption of various battery technologies, including lithium-ion, lead acid, flow, sodium-based, nickel-cadmium, nickel metal-hydride, and nickel-iron batteries.
Moreover, the largest share of the market is forecast to be held by lithium-ion batteries due to their high energy density, lightweight, and long life expectancy. However, other factors such as standby losses, efficiency, weight, ownership model, and battery type are also influencing the market. Utility-owned models and third-party owned models each have their advantages, with the highest rate of growth expected in the third-party owned model. Therefore, the rise in urbanization and electricity demand will significantly drive the market during the forecast period.
Declining costs of battery storage systems are an emerging trend shaping the market growth. The market is experiencing significant growth due to technological advancements, expanded deployment, and declining prices. Lithium-ion and lead-acid batteries are expected to see price reductions of up to 50% and 50%, respectively, during the forecast period. Flow batteries, sodium-based, and other types, including nickel-cadmium, nickel metal-hydride, and nickel-iron batteries, are also anticipated to experience price decreases.
Moreover, government subsidies, regulations, and incentives are driving the adoption of battery storage for energy efficiency and grid stability. During the forecast period, utility-owned and third-party-owned models are expected to have the highest rate of growth. Lightweight batteries with longer life expectancies, higher efficiency, and lower weight are in high demand for overall grid stability. The declining costs of battery systems will increase the sales of battery-based ESSs in utilities, which will drive the global market trends during the forecast period.
Growing competition from fuel cells is a significant challenge hindering market growth. The markets have witnessed significant growth due to technological advancements and expanded deployment of energy storage solutions. However, the industry's expansion is hindered by regulatory barriers, including administrative delays in implementing new regulations and discrepancies in rules across markets. Government subsidies and incentives have played a crucial role in driving the market, particularly for lithium-ion, lead acid, flow, sodium-based, nickel-cadmium, nickel metal-hydride, and nickel-iron batteries.
Moreover, the largest share of the market is forecasted during the forecast period, with the highest demand coming from utility-owned and third-party-owned models. Battery storage systems have become essential for renewable energy integration, load supervision, and overall grid stability, reliability, and resiliency. Therefore, growing investments in fuel cell technology will boost its applications in grid-scale power storage and will subsequently affect 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.
The ancillary services segment is estimated to witness significant growth during the forecast period. The market is experiencing significant growth due to technological advancements and expanded deployment of these energy storage solutions. Government subsidies and regulations are driving the demand for grid-scale batteries, which offer energy efficiency and flexibility in managing electricity supply and demand imbalances. Lithium-ion, lead acid, flow, sodium-based, nickel-cadmium, nickel metal-hydride, and nickel-iron batteries are among the key players in this market, with lithium-ion batteries holding the largest share.
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The ancillary services segment was the largest segment and was valued at USD 2.61 billion in 2018. The forecast period for this market is characterized by increasing product demand, driven by the need for overall grid stability, incentives for renewable energy integration, and the adoption of battery storage and load supervision systems. Molten salt batteries and other clean energy storage solutions are also gaining traction due to their high efficiency, long life expectancy, and lightweight design. The highest rate of growth is expected in the third-party owned model, which offers utility companies and energy consumers greater flexibility and control over the power system. 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 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. The market in APAC is projected to expand significantly due to the increasing power demand, population growth, and the shift toward renewable power sources. Effective load control and power storage advantages are key drivers, enabling diverse resources integration, arbitrage opportunities, and the mitigation of electricity price fluctuations.
Moreover, renewable energy curtailment and timing discrepancies between conventional generators and renewable sources are addressed through power storage solutions, such as lithium-ion, flow, zinc-hybrid, and sodium-based batteries. Power capacity rating and power capacity enable peak shaving, load shifting, and renewable sources integration, while backup power ensures power resilience. Thus, the above-mentioned projects and increasing demand for power storage solutions will drive the market in APAC during the forecast period.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2023 for the following segments.
In the realm of renewable energy, the market holds significant importance. Technology, expansion, and adoption are key elements driving this sector's growth. The use of advanced batteries like Lithium-ion, Flow, and Nickel-Manganese-Cadmium is transforming the energy landscape. These batteries provide stability to the grid by storing excess energy generated during off-peak hours and releasing it during peak demand. AdvanCements in battery technology have led to increased energy density, longer cycle life, and reduced costs. Expansion of this market is seen in developing countries, where there is a growing need for reliable power sources. Regulations and incentives play a crucial role in the adoption of grid-scale batteries.
The battery market is expected to grow significantly, with estimates suggesting a CAGR of 15.2% from 2021 to 2028. Companies like Tesla, LG Chem, and Panasonic are leading players in this sector. The future of grid-scale batteries looks promising, with potential applications in electric vehicles and renewable energy integration. In summary, the market is a dynamic and evolving sector, driven by technology, expansion, and adoption. The use of advanced batteries is transforming the energy landscape, providing stability to the grid and reducing reliance on traditional power sources. Investments in renewable energy are surging, driven by the declining costs of grid-scale batteries and the promise of high energy and power density. The shift towards an ownership-model encourages a broader range of stakeholders to participate, while utility-owned projects remain a dominant force in advancing the renewable energy infrastructure.
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, Market forecasting 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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