| Forecast Period | 2024-2028 |
| Market Size (2022) | USD 3.35 Billion |
| CAGR (2023-2028) | 21.08% |
| Fastest Growing Segment | Utility Owned |
| Largest Market | North America |
Market Overview
The global Grid Scale Battery Market was valued at USD 3.35 billion in 2022 and is anticipated to experience robust growth in the forecast period with a CAGR of 21.08% through 2028.
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Large-scale energy storage, or grid-scale batteries, is a technology that enables grid managers and utilities to store energy for later use. A battery energy storage system (BESS) is an electrochemical device that charges (or collects) energy from a grid or power plant. It then releases that energy when electricity or other grid services are needed.
In times of low demand or high supply and low cost (particularly from intermittent power sources like renewable electricity from wind, tidal, and solar power), electrical energy is stored. In times of low supply and often higher electricity costs, it is then released back into the grid.
Additionally, utility-scale battery storage systems can allow for greater integration of variable renewable energy sources into the grid by storing excess energy and smoothing the energy output through a process called capacity firming. By providing more reliable and substantially cheaper electricity in remote grids and off-grid communities that would otherwise have to rely on expensive imported diesel for their electricity generation, battery storage solutions, when combined with renewable energy generators like wind, hydro, or solar (PV), can unleash the full potential of renewable energy. The shift to renewable energy is fueling the growth of the grid-scale battery industry.
Time and resource efficiency are greatly enhanced by the use of technology. Electricity can be produced, stored, and used thanks to renewable energy sources like sun and wind. Electricity companies can save expenses and lessen their environmental effect by combining energy-saving devices with the Internet of Things (IoT). IoT device data gives them a better understanding of energy consumption, which they may use for strategic planning, demand forecasting, and load balancing. In order to ensure continuous operations in the event of unplanned grid outages, energy storage technologies also provide backup power.
Increase in Renewable Energy Production Supporting the Growth of the Global Grid-Scale Battery Market
The growing need for system flexibility and the rapid reduction in battery technology costs have allowed Battery Energy Storage Systems (BESS) to play a major role in the energy sector. The market for grid-scale batteries is growing as a result of the adoption of energy storage systems by numerous regulators, utilities, and legislators.
The depletion of fossil fuels and the rapid adoption of government policies to support renewable energy are expected to drive an increase in demand for grid-scale batteries during the next years. Microgrids are connected to renewable energy sources via power equipment. This energy is later stored in buildings, businesses, and electrical grid locations.
For example, the International Energy Agency (IEA) reports that in 2020, demand for renewable energy grew by 3%, while demand for all other fuels decreased. Wind and solar PVs are mostly to blame for the rise in the use of renewable energy. Nearly half of the global increase in renewable electricity in 2021 came from China alone, with the United States, the European Union, and India trailing closely behind. Consequently, the surge in the utilization of renewable energy is anticipated to drive growth in the global grid-scale battery market.
Rise in Demand for Energy
Rapid urbanization and industrialization have resulted in a sharp rise in the world's energy consumption. Increasing infrastructure spending is another factor contributing to Asia-Pacific's high energy usage. The International Energy Agency (IEA) estimates that power demand in Asia Pacific increased from 2% in 2020 to roughly 8% in 2021. In 2021, the demand for energy increased by 10% in both China and India.
Furthermore, natural gas is taking the place of coal in regions that have additional space for coal-fired power facilities. Many countries are trying to reduce their reliance on Russian gas supplies as a result of rising gas costs and supply problems. Rapid industrialization and population growth are causing the world's energy consumption to shift proportionately to developing nations. Throughout the projected period, this is anticipated to propel the global grid-scale battery market's expansion.
R&D in Grid-scale Energy Storage Technologies driving the market for Grid-scale Battery
Better power gadgets are now being produced by manufacturers. In the market, long-term energy storage technologies are growing in popularity. Other storage technologies that are highly sought after in the industry are thermal energy storage and mechanical energy storage.
Grid-scale battery storage companies are expected to invest in technology advancements in the future years. In order to meet client requests and address a variety of power system challenges, these enhancements mostly consist of simulation and computation technologies that are utilized during the design phase. In order to produce high-quality storage systems more quickly, automated manufacturing processes have become more popular. It is therefore anticipated that this would present industry participants with substantial growth opportunities.
Increased reliability and resilience, as well as the integration of many resources, are only a few advantages of energy storage. Arbitrage is another advantage of grid-scale batteries. Recharging the battery during less expensive off-peak times and charging it during more costly peak times is known as arbitrage. The battery energy storage systems (BESS) operator can profit from this approach by using the daily fluctuations in electricity costs. Furthermore, the reduction in curtailment of renewable energy represents an extension of the energy arbitrage business. Plant operators want to use as much inexpensive, emission-free renewable energy generation as they can. It turns out to be profitable for plant operators to charge the battery with inexpensive energy during periods of excess renewable generation and discharge it during periods of high demand. However, the limited flexibility of conventional generators and timing differences between the supply of renewable energy and the demand for electricity may force renewable generators to throttle their output in systems with an increasing share of variable renewable energy (VRE).
Recent Developments
- The British government awarded USD USD13.7 million to battery manufacturer ‘Invinity Energy Systems’ in April 2023 to construct the largest grid-scale battery storage constructed in the UK. Invinity's Vanadium Flow Battery technology, which offers long-duration, non-degrading energy storage and is perfect for the management of renewable energy systems, would be used in the grid-scale battery storage project. Invinity claims that its battery technology is nearly entirely recyclable and has a lifespan of more than 25 years. The 30 MWh system power battery system would be able to store enough energy to run 2,500 households for more than two hours and deliver more than 7 MW of electricity on demand.
- The Australian Renewable Energy Agency (ARENA) announced in December 2022 that it would conditionally fund 8 grid-scale battery projects around Australia with USD176 million. Each battery that would be purchased through ARENA's large scale battery storage funding round would be fitted with grid-forming inverter technology. This enables them to provide crucial system stability functions that fossil fuels like coal and gas previously offered. These projects represent a tenfold increase in grid-forming power storage capacity currently in use in the National power Market (NEM), with a total project value of 2.7 billion and a capacity of 2.0 GW/4.2 GWh.
Market Segmentation
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Market Players
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The main market players in the global grid scale battery market are
|
Attribute |
Details |
|
Base Year |
2022 |
|
Historic Data |
2018– 2022 |
|
Estimated Year |
2023 |
|
Forecast Period |
2024 – 2028 |
|
Quantitative Units |
Revenue in USD Million and CAGR for 2018-2022 and 2023-2028 |
|
Report Coverage |
Revenue forecast, company share, growth factors, and trends |
|
Segments Covered |
Battery Type Ownership Application Region |
|
Regional Scope |
North America, Asia-Pacific, Europe, South America, Middle East & Africa |
|
Country Scope |
United States, Canada, Mexico, China, India, Japan, South Korea, Australia, Germany, United Kingdom, France, Italy, Spain, Brazil, Argentina, Colombia, Saudi Arabia, South Africa, UAE |
|
Key Companies Profiled |
Panasonic Corporation, LG Chem Ltd., Contemporary Amperex Technology Co Ltd, Samsung SDI Co. Ltd., BYD Co Ltd, East Penn Manufacturing Company, GS Yuasa Corporation, NGK Insulators, Ltd., Toshiba Corporation, Redflow Limited |
|
Customization Scope |
10% free report customization with purchase. Addition or alteration to country, regional & segment scope. |
|
Pricing and Purchase Options |
Avail customized purchase options to meet your exact research needs. Explore purchase options |
|
Delivery Format |
PDF and Excel through Email (We can also provide the editable version of the report in PPT/Word format on special request) |
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