Grid connected battery energy storage market

Global Grid Connected Battery Energy Storage market was valued at US$ 1,234.1 Million in 2022, exhibiting a compound annual growth rate (CAGR) of 26.8% from 2023 to 2030.

The market for energy storage systems that is connected to the electrical grid is known as the global grid connected battery energy storage market. The energy storage systems are made to store excess power produced by renewable energy sources like solar and wind, and release the stored power back into the grid when supply runs out. There has been increasing demand for energy storage technologies that can store excess energy and release it when needed along with the usage of renewable energy sources.

Government incentives, technological advancements, and rising use of renewable energy sources are expected to drive the global grid connected battery energy storage market. Grid-connected battery energy storage systems also offer a number of advantages such as increased grid stability, increased energy efficiency, and decreased greenhouse gas emissions.

Rising use of renewable energy sources and demand for energy storage solutions to support grid stability and flexibility are expected to drive the market growth in the near future.

Global Grid Connected Battery Energy Storage Market- Regional Insights

Among region, North America had the largest market share. Lithium-ion battery storage systems are in high demand in North America as these are the region's most advanced and widely available solutions for storing power from renewable channels. Furthermore, rapid cost reductions and soaring storage demand for variable renewable power integration are expected to drive the market growth.

Moreover, Asia Pacific is expected to witness a high CAGR in the global grid connected battery energy storage system market. Rising investments in the emerging countries and increasing projects by the government for the power projects are expected to drive the market growth during the forecast period. As per the International Energy Agency, the Chinese government, announced plans to install more than 30 GW of power storage by 2025. For Instance, on Feb 1 2023,Indian Finance minister Nirmala Sitharaman announced the development of battery energy storage systems with capacity of 4,000 MWH supported with Viability Gap Funding.

Figure 1. Global Grid Connected Battery Energy Storage Market Share (%), By Region, 2022

Global Grid Connected Battery Energy Storage Market- Impact of Coronavirus (COVID-19) Pandemic

COVID-19 has severely impacted the global economy and all the industries throughout the globe. Governments of various countries have imposed lockdowns to curb the spread of the epidemic. The complete global lockdown in the initial stage of the pandemic in various countries severely impacted the livelihoods of people and quality of life. This has resulted into the disruptions in the supply chain across the globe. The economies across the world have declined as there was major decline in the demand for products. The production across industries has been limited due shortage of raw material. The decline in exports and the disruptions in the supply chain are the major factors contributing to the decline in production.

The sudden outbreak of the novel coronavirus has adversely affected the growth of utility applications. A decline had been witnessed in the installation of battery energy storage system in various projects in 2021. However, increasing installation of battery energy storage system in the operational projects and rising focus of government towards modernizing the power sector is estimated to increase adoption of batteries.

Global Grid Connected Battery Energy Storage Market- Drivers

Increasing demand for energy:

Increasing demand for electricity due to population growth, urbanization, and industrialization is expected to drive the market growth. Grid-connected battery energy storage systems can help utilities meet this demand by providing a means to store energy during periods of low demand and release it during periods of high demand.  According to the latest forecast from research company Bloomberg NEF (BNEF), in 2021, energy storage installations around the world are projected to reach a cumulative 411 gigawatts by 2030. That is 15 times the 27GW/56GWh of storage online .

Increasing Government Initiatives:

Many countries are turning to renewable energy storage to reduce dependency on energy imports, enhance the reliability and resiliency of their systems, and shift toward environmental and de-carbonization targets. For instance, India and Japan, in March 19, 2022, agreed to extend clean energy partnership to cover electric vehicles, battery storage, and green hydrogen as the two Asian economic power house pivot net zero carbon emission pathways.

Grid Modernization:

Growing battery storage along with grid modernization efforts including the transition to smart grids is expected to drive the market growth. Batteries help to unlock the full potential of smart technologies. For instance, in 5^th April, India Grid, a leading infrastructure investment trust, announced the launch of the country's first battery energy storage system that is linked to solar panels. This innovative system is designed to store excess solar power generated during the day and then distribute it during periods of high demand such as in the evening or at night.

Global Grid Connected Battery Energy Storage Market- Opportunities

Increasing Number of Rural Electrification Projects Worldwide

Rural electrification is the process of making electrical power accessible in rural or remote areas. Battery energy storage systems are effective for rural electrification. Various countries in the world are trying to develop their remote areas such as isolated rural areas and peri-urban areas, especially in developing countries; and small islands separated from the national grids. As such, they require to have a reliable and uninterrupted power supply from renewable and conventional sources of energy that increases the overall system efficiency and ensures economic savings across the system life cycle. The installation of battery energy storage systems in rural areas would act as a solution to serve the businesses and local communities with a reliable and safe power supply.

Global Grid Connected Battery Energy Storage Market- Trends

Increasing Number of Large-Scale Battery Storage Projects

Increasing number of large-scale battery storage projects is expected to drive the market growth. These initiatives support grid stability and support during peak period demand because they are frequently situated close to renewable energy sources. For Instance, on January 19, 2023, Solar Energy Corporation of India awarded JSW Energy, an energy company, two storage projects of 500 megawatts (MW), with a 1,000 megawatt-hour (MWh) output, which can provide power backup for two hours.

Extension of Energy Storage Applications:

Battery energy storage systems are being used for a variety of applications outside of grid support such as electric vehicle charging infrastructure, industrial and commercial energy management, and residential energy management. The market is expanding as a result of the expansion of applications, which is also presenting new business opportunities for battery and energy storage companies. For Instance, in 19^th feb 2022, Government of India to expand Public Electric Vehicle Charging Infrastructure across the nation.

Global Grid Connected Battery Energy Storage Market- Restraints

The high cost of investment restricts the market growth

The major restricting factor in the global market especially in terms of large-scale set-ups is the high cost of investment and pre-requirement of supporting infrastructure. Since these set-ups are not only supposed to generate electricity or energy but supply them to remote areas, the initial set-up expense is extremely high.

Figure 2. Global Grid Connected Battery Energy Storage Market Share (%), By Segment, 2022  

Global Grid Connected Battery Energy Storage Market- Segmentation

Global Grid Connected Battery Energy Storage Market report is segmented into battery type, end-user type, and region.

Based on Battery type, the market is segmented into lithium-ion battery and lead acid battery. Lithium ion battery segment is expected to drive the global grid connected battery energy storage market during the forecast period.

Based on End User, the market is segmented into residential and industrial, Utilities, Others

Global Grid Connected Battery Energy Storage Market: Key Developments

In June 2020, Panasonic, Japan-based multinational conglomerate corporation, signed a new agreement with Span.IO, Inc. (U.S.), Energy equipment and solutions in San Francisco, California to develop residential energy storage system. This system is likely to be integrated into Panasonic’s Ever Volt, paired with Span smart panel, producing a new level of control over their battery backup power with intuitive energy management for the homes.

In January 2022, Vistra, an integrated retail electricity and power generation company, announced plans to build its moss landing energy storage facility. Pacific Gas and Electric Company (PG&E) has agreed to a 15-year asset adequacy agreement for an innovative 350 MW battery system. This would be in addition to the existing 400 MW of power storage capacity at the premises.

In February 2023, The New York Power Authority (NYPA) and the New York State Energy Research and Development Authority (NYSERDA), announced their first-of-its-kind battery energy storage system (BESS) utilizing patented, high-safety, lithium-ion (Li-ion) super Cell technology. It provide energy peak-shaving capabilities to NYPA’s White Plains offices as part of a demonstration project.

Global Grid Connected Battery Energy Storage Market: Key Companies Insights

Key players operating in the global grid connected battery energy storage Market are NGK Insulators Ltd, BYD Company, NEC Corporation, Samsung SDI Co., LG Electronics Inc., Xtreme Power, Saft Groupe S.A., AES Energy Storage, Alevo, Delco, Altair Nanotechnologies Inc., EnerDel, GNB Corporation, Ecoult, and Powertree Services Inc.

*Definition: The grid connected battery energy storage system is an integration of battery with a two way power converter that connects the direct current battery to the alternate current grid, and a real-time control software that helps to balance the frequency and power flows, while optimizing the efficiency and service life of the system.

Detailed Segmentation:

• Global Grid Connected Battery Energy Storage Market, By Battery Type
• Lithium-Ion Battery
• Lead Acid Battery
• Global Grid Connected Battery Energy Storage Market, By End User
• Residential
• Industrial
• Utilities
• Others
• Global Grid Connected Battery Energy Storage Market, By Region:
• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa