Distributed Energy Storage System Market Size & Share, by Capacity Type (Single-Phase Type, Three-Phase Type, Double-Phase Fire Line Type); Battery (Nickel-Cadmium, Lead Acid, Lithium-Ion); Application (Transportation, Grid Storage, Renewable Energy Storage); End-user (Commercial, Residential) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 3962
  • Published Date: Mar 06, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

Distributed Energy Storage System Market size is expected to reach USD 15 billion by the end of 2035, growing at a CAGR of 9% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of distributed energy storage system was USD 5 billion. The growth of the market can be attributed to the increasing demand for electricity throughout the world, coupled with the integration of advanced technologies with energy storage. According to the data from the International Energy Agency (IEA), the global electricity demand was estimated to increase by over 1,000 TWh in 2021. Further, increasing implementation of battery energy storage across the energy distribution infrastructure is also forecasted to assist the market growth over the projected time frame.

In addition to these, factors that are believed to fuel the market growth of distributed energy storage systems include the radically proliferating need for transportation of stored energy, backed by the growing import and export of various forms of energy across the globe, is also anticipated to drive the market growth during the forecast period. A report by the IEA stated that North America imported 76,293 GWh of electricity in 2019, while Europe imported 459,952 GWh of electricity and the Asia Pacific region imported 77,868 GWh of electricity in the same year. Additionally, the rapidly rising ratio of industrialization throughout the world is also predicted to present the potential for market expansion over the projected period.


Distributed-Energy-Storage-System-Market-scope
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Distributed Energy Storage System Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

~9%

Base Year Market Size (2022)

~ USD 5 Billion

Forecast Year Market Size (2035)

~ USD 15 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Distributed Energy Storage System Sector: Growth Drivers and Challenges

Market-Growth-Drivers

Growth Drivers

  • Increasing Deployment of Micro Grids – A microgrid is a network of interconnected loads and distributed sources of energy that operate as a unified controlled entity in regarding the grid. It can connect to and disconnect from the grid, allowing it to function in either grid-connected or island mode. The deployment of microgrids has increased as these grids can increase customer dependability and robustness to grid outages. Advanced microgrids allow local power generation assets, such as traditional generators, renewables, and storage, to maintain the local grid operational even when the main grid is disrupted. Moreover, by the integration of various renewable energy sources comprising wind, solar, and hydro, these grids have been lowering greenhouse gas emissions to a great extent. Hence, the surge in the deployment of microgrids is anticipated to spur market growth in the coming years. For instance, the installation count of operational microgrids in the United States has extended to around 465 that generate nearly 3.5 gigawatts of reliable electricity.

  • Rising Fossil Fuel Prices - The price of oil and gas has recently surged as a result of rising global demand. Prices had increased as a result of Russia's intrusion into Ukraine. Furthermore, the global decline in nuclear power output has led to a rise in the utilization of coal and oil for electricity generation. Hence, this factor is also estimated to boost the market further throughout the forecast period. For instance, in the United Kingdom, it cost more than USD 121 to fill up a normal family car with petrol in 2022.

  • Escalating Government Policies to Mitigate Carbon Emissions - It is feasible to enhance air quality and save lives by decreasing emissions of greenhouse gases. Reducing greenhouse gas emissions could save millions of premature deaths caused by air pollution over the course of the next century. The government of developed and developing nations has been prioritizing policies on a larger scale to mitigate carbon emissions. Thus, this factor is also projected to spur the growth of the global distributed energy storage system market in the coming years. As per the statistics provided by the Government of the Netherlands, the Climate Act of Dutch government targets for around 47% decrease in greenhouse gas emissions by 2030 and a 96% reduction by 2050 in the Netherlands.

  • Growing Investments in Green Energy - Green energy derived from renewable resources such as the sun and wind offer the greatest environmental advantages. The environment is not harmed by green energy, thus investments in green energy have been surging at a huge level. According to the International Energy Agency (IEA), worldwide investment in green energy was anticipated to reach USD 1.4 trillion in 2022.

  • Worldwide Upsurge in Smart Buildings – For instance, the count for smart buildings is anticipated to rise from around 44 million in 2022 to nearly 118 million in 2026, an increase of more than 152%.

Challenges

  • Thermal Runaway Issue of Batteries - Thermal runaway of batteries is a major concern for Lithium-ion batteries, posing a significant barrier to the growth of distributed energy storage system market. Internal cell faults, mechanical failures or damage, or excess voltage are the primary causes of thermal runaway, which results in high temperatures, gas accumulation, and potentially catastrophic rupture of the battery cell, ending in fire or explosion. Thermal runaway can spread from one cell to the next if not disconnected, leading to further damage. Thus, this factor is anticipated to lower the growth of the market in the coming years.
  • High Capital Investment in DES Systems
  • Increasing Cost of Lithium


Distributed Energy Storage System Segmentation

Application (Transportation, Grid Storage, Renewable Energy Storage)

The global distributed energy storage system market is segmented and analyzed for demand and supply by application into transportation, grid storage, renewable energy storage, and others. Out of these four types of segments, the transportation segment is estimated to gain the largest market share over the projected time frame. The growth of the segment can be attributed to the massive surge in the adoption of electric mobility in the form of e-bikes, cars, and so on throughout the world, along with the rising spending for eco-friendly vehicles. Based on the International Energy Agency's Global EV Outlook 2020 report, 2.1 million electric cars were sold worldwide in 2019. In addition to this, the government's venture to encourage the adoption of EVs to save the environment by lowering vehicle pollution levels is creating a huge demand for batteries, particularly lithium-ion batteries, which have a high energy density, high storage capabilities, an increased life cycle, low maintenance, and cost-effectiveness. This, in turn, has a beneficial impact on the demand for distributed energy storage technology for transportation, thus propelling the segment growth further throughout the forecast period.

Battery (Nickel-Cadmium, Lead Acid, Lithium-Ion)

The global distributed energy storage system market is also segmented and analyzed for demand and supply by the battery into nickel-cadmium, lead acid, lithium-ion, and others. The lithium-ion segment is expected to garner a significant share among these four segments. Several advantages associated with lithium-ion batteries such as high charging level, extreme power density, high voltage, and so on are propelling the demand for these batteries. Moreover, lithium-ion batteries are highly utilized in electric vehicles as their high energy efficiency is also a major factor that is anticipated to spur segment growth in the coming years. For instance, globally around USD 47,140 million in revenue was generated by lithium-ion battery sales in 2021, and that amount is expected to further increase to nearly USD 167,848 million by 2030. This, as a result, is anticipated to create numerous opportunities for the growth of the segment in the coming years.

Our in-depth analysis of the global market includes the following segments:

          By Capacity Type

  • Single-phase Type
  • Three-phase Type
  • Double-phase Fire Line Type

          By Battery

  • Nickel-Cadmium
  • Lead Acid
  • Lithium-Ion
  • Others

         By Application

  • Transportation
  • Grid Storage
  • Renewable Energy Storage
  • Others

         By End-Use

  • Commercial
  • Residential

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Distributed Energy Storage System Industry - Regional Synopsis

APAC Market Statistics

The Asia Pacific distributed energy storage system market, amongst the market in all the other regions, is projected to hold the largest market share by the end of 2035. The growth of the market can be attributed majorly to the increasing demand and consumption of electricity in countries such as China, India, Japan, and so on, coupled with the massive surge in investments in renewable energy in the region. For instance, by 2030, Asia Pacific investments in renewable energy production are estimated to be more than double to nearly USD 1.5 trillion, compared to the previous decade. In addition, the surge in the capacities of clean energy sources, along with the rapid urbanization and growing population ratio is also anticipated to boost the market growth during the forecast period.

Europe Market Forecast

The European distributed energy storage system market, amongst the market in all the other regions, is projected to grow with the highest CAGR during the forecast period. The growth of the market can be majorly attributed to the growing production and consumption of energy in the region. As per the IEA data, in the Europe region, total electricity production reached 4,112,925 GWh in 2019. In addition to this, the rising awareness regarding renewable sources, followed by the surge in governmental strategies to promote renewable power generation, and the massive adoption of electric vehicles are estimated to propel the regional growth of distributed energy storage system market in the projected time frame.

Research Nester
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Companies Dominating the Distributed Energy Storage System Landscape

top-features-companies
    • Johnson Controls International plc
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • ABB Ltd.
    • Schneider Electric SE
    • Emerson Electric Co.
    • Advanced Control Systems, LLC
    • Hitachi, Ltd.
    • LG Energy Solution Ltd.
    • NEC Corporation
    • The General Electric Company
    • Jabil, Inc.

In-the-news

In The News

  • Emerson Electric Co. launched the Oviation Green Portfolio, a new innovative technology and software portfolio designed to help power generation organizations, transition to green energy production and storage.

  • ABB Ltd. has partnered with SaltX Technology to develop a large-scale energy storage system that offsets the inconsistencies in renewable energy production.


Author Credits:  Payel Roy, Dhruv Bhatia


  • Report ID: 3962
  • Published Date: Mar 06, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Increasing deployment of microgrids, rising fossil fuel prices, and escalating government policies to mitigate carbon emissions are the major factors driving market growth.

The market is anticipated to attain a CAGR of 9% over the forecast period, i.e., 2023-2035.

Thermal runaway issues of batteries, high capital investment in DES systems, and increasing cost of lithium are estimated to be the growth hindering factors for the market expansion.

The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

The major players in the market are Johnson Controls International plc, ABB Ltd., Schneider Electric SE, Emerson Electric Co., Advanced Control Systems, LLC, Hitachi, Ltd., LG Energy Solution Ltd., NEC Corporation, and others.

The company profiles are selected based on the revenues generated from the product segment, geographical presence of the company which determine the revenue generating capacity as well as the new products being launched into the market by the company.

The market is segmented by capacity type, battery, application, end-user, and by region.

The transportation segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Distributed Energy Storage System Market Report Scope
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