Worldwide energy storage deployments are set to hit 42GW/99GWh, up 34% in gigawatt hours from the previous forecast from BloombergNEF. The body said in its second half 2023 energy storage market outlook that government investments and policies are starting to bear fruit as projects grow.
Global cumulative energy storage capacity by the end of 2030 will total 650GW/1,877GWh, it said.
BNEF said lithium-ion batteries using nickel manganese cobalt (NMC) chemistries are losing market share due to their relatively higher cost, when compared to lithium iron phosphate batteries.
Beyond lithium-ion batteries, alternative technologies focused primarily on long-duration energy storage needs remain limited. It said it accounts for 1.4GW/8.2GWh of commissioned capacity worldwide. The Asia Pacific (APAC) region has accounted for 85% of new installations since 2020.
China is solidifying its position as the largest energy storage market in the world for the rest of the decade, it noted. The Asia Pacific region (APAC) will maintain its lead in building on a gigawatt basis, with 47% of the additions in 2030, it said.
China is dominating largely due to top-down compulsory requirements for storage to be paired with utility-scale wind and solar.
Europe, Middle East and Africa (EMEA) will represent 24% of annual energy storage deployments on a gigawatt basis by 2030, BNEF said. The region added 4.5GW/7.1GWh in 2022, with residential battery installations in Germany and Italy outpacing previous expectations.
Residential batteries are now the largest source of storage demand in the region and will remain so until 2025, it said. EMEA is expected to reach 114GW/285GWh cumulatively by the end of 2030, it said. This is a 10-fold growth in gigawatt terms, with the UK, Germany, Italy, Greece, and Turkey leading.
Despite the growth, market uncertainties remain. “The case for long-duration energy storage remains unclear despite a flurry of new project announcements across the US and China,” said BNEF’s energy storage analyst Helen Kou.
In its 2023 World Energy Outlook, the International Energy Agency said global EV sales rose by more than 50% in 2022, reaching a record high of more than 10 million. Deployment of utility-scale and behind-the-meter battery storage grew by 90% in 2022.
It said battery storage is attracting increasing investment to provide hour-to-hour flexibility and grid stability. Investment in unabated fossil fuel power plants, already low in recent years, will drop to a minimal level. It will be mostly focussed on natural gas-fired power for the provision of flexibility services.