Analysis by Technology (Pumped Hydro Storage, Compressed Air, Battery Energy, Flywheel Storage, and Others); by Component (Sodium Sulfur, Lithium, Lead Acid, Nickel Cadmium, and Others); by Application (Grid Storage, Transportation, and Others); and by End-User (Residential, Non-Residential, and Utility) – Global Supply & Demand Analysis & Opportunity Outlook 2023-2035
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The global energy storage system market is estimated to garner a revenue of ~USD 80 Billion by the end of 2035 by growing at a CAGR of ~6% over the forecast period, i.e., 2023 – 2035. Further, the market garnered revenue of ~USD 43 Billion in the year 2022. The growth of the market can be attributed to the growing demand for energy storage and transportation, backed by the global adoption of renewable energy, and soaring investments in grids are anticipated to drive the market growth in the coming years. As per a report by the International Energy Agency (IEA), electricity grid investments were expected to reach USD 290 billion in 2021. Moreover, the radically increasing demand for energy throughout the world is also predicted to increase the growth of the global energy storage system market further in the years to come.
In addition to these, factors that are believed to fuel the market growth of energy storage system include the worldwide rise in power outages, along with the surging investments in the production of renewable energy. For instance, based on a 2019–2020 assessment of residential energy use in India, more than 55% of rural residents experienced intermittent power outages each day. Additionally, a surge in the demand for efficient grid management, coupled with the favorable governmental framework for sustainable technologies are some major factors that are anticipated to boost the market growth further over the projected time frame.
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
~6% |
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Base Year Market Size (2022) |
~ USD 43 Billion |
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Forecast Year Market Size (2035) |
~ USD 80 Billion |
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Regional Scope |
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Growth Drivers
Worldwide Growing Demand for Energy - Global energy demand is rising to meet the expanding needs of the world's population. Energy demand is rising as a result of increased economic activity and technological advancements in both developed and developing nations. Energy consumption is always increasing, generating price volatility in petroleum-based fuels as well as environmental issues linked with fossil fuels, such as greenhouse gas (GHGs) emissions, which contribute to global warming. This scenario motivates researchers to investigate and invent new approaches and sustainable technology for energy storage and biofuel production. Hence, this factor is estimated to significantly boost the growth of the global energy storage system market during the forecast period. According to the statistics of the International Energy Agency (IEA), the worldwide total final consumption of energy increased to 15.1 Etta Joule by 2019.
An Upsurge in Investments in Renewable Energy – For instance, Over the past few decades, the United States has witnessed a considerable increase in investment in renewable energy sources. Investments exceeded nearly USD 60 billion in 2019, which increased from around USD 10 billion in 2005.
Worldwide Increase in Carbon Emission – As per a report, in 2021, worldwide carbon dioxide emissions from fossil fuels and industries climbed by around 5.6%, setting a new high of nearly 39 billion metric tons (GtCO2). China and the United States were the two major contributors to total emissions that year, with approximately 12.28 and 6.05 GtCO2, respectively.
Massive Surge in the Demand for Batteries – For instance, the demand for batteries is anticipated to be increased from 188 GWh in 2020 to more than 2,000 GWh by 2030. This significant growth is mostly attributable to the rise in electric transportation, which, in terms of overall energy storage capacity is anticipated to account for the great majority of the demand for batteries by 2030.
Worldwide Expanding Count of Data Centers – For instance, there are more than 8,000 data centers worldwide. As of January 2022, there were nearly 2,802 data centers in the United States, with 488 more in Germany. Whereas, with around 460, the United Kingdom placed third among countries in terms of the number of data centers, while China had approximately 446 data centers.
Challenges
The global energy storage system market is segmented and analyzed for demand and supply by technology into pumped hydro storage, compressed air, battery energy, flywheel storage, and others. Out of these five types of segments, the pumped hydro storage segment is estimated to gain the largest market share over the projected time frame. The growth of the segment can be attributed to the worldwide exceeding demand and adoption for pumped hydro storage power generation, coupled with the growing energy consumption throughout the world. For instance, as per a report, till 2021, pumped hydro energy storage accounted for approximately 94% of total global storage power capacity and nearly 97% of total global storage energy volume. Besides this, a rising initiative by the government of nations for renewable energy generation to attain zero carbon footprint is also projected to propel the growth of the segment in the coming years.
The global energy storage system market is also segmented and analyzed for demand and supply by application into grid storage, transportation, and others. Amongst these three segments, the grid storage segment is expected to garner a significant share. The growth of the segment can be ascribed to the extensive use of grid energy storage systems across the globe, along with the radically rising demand for energy in the industrial sector is another major factor that is estimated to boost the growth of the segment in the coming years. As per the International Energy Agency (IEA) report, by the end of 2021, the total installed grid-scale battery storage capacity was up to 16 GW, the majority of which was installed over the last five years. Installations climbed significantly in 2021, jumping by 60% over 2020 as more than 6 GW of storage capacity was installed. That was the second year in a row in which the installations increased significantly. Besides this, large-scale energy storage allows for a continuous and efficient power supply. This, as a result, is also anticipated to create numerous opportunities for the growth of the segment in the coming years.
Our in-depth analysis of the global energy storage system market includes the following segments:
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By Technology |
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By Component |
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By Application |
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By End-User |
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The Asia Pacific 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 massively increasing demand for energy in the region owing to rapid urbanization. For instance, in 2021, the Asia Pacific region utilized nearly 275.50 exajoules of primary energy, an increase of more than 6% compared to the previous year. Further, the rapid growth in industrialization in the countries such as India, China, Korea, and so on is also accelerating energy consumption on a huge level that is also projected to contribute to the market growth in the region. In addition, mounting investment in rural electrification, excessive government investments in the acceptance of green energy sources, and augmented government programs to stimulate the corporate sector to implement renewable energy sources are the major factors that are estimated to further drive the growth of the Asia Pacific energy storage system market during the forecast period.
Additionally, the North American energy storage system market is also estimated to display notable market growth by the end of 2035. The growth of the market can be attributed to the expanding initiatives to lessen carbon footprint, coupled with the amplified awareness about the advantages of renewable energy sources in the region. Moreover, demand for efficient and regular power supply on utility and end-use scales is radically surging on the back of the huge adoption of electric vehicles which is thoroughly boosting the proportion of electric vehicle charging stations is also anticipated to fuel the market growth further in the region throughout the forecast period. As per the report of the U.S. Energy Information Administration (EIA), transporting people and commodities utilized around 28% of total U.S. energy usage in 2021.
LG Chem, Ltd. to make a substantial equity investment in North America’s largest battery recycling company, ‘Li-Cycle’. LG Chem and LG Energy Solution is estimated to also supply 20,000 tons of nickel for recycling, over ten years’ period starting in 2023.
Electrovaya Inc. entered into a strategic supply agreement with the Raymond Corporation for the supply of battery systems for Raymond’s energy essentials battery line.
In 2023, market players might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain.
Controlling Inflation has become the first priority for global economies from last quarter of 2022 and to be followed in 2023. With skewed economic situations, rise in interest rate by governments to control spending and inflation, spiked oil and gas prices, high inflation, geo-political issues including U.S. & China trade war, Russia-Ukraine conflict to intensify the global economic issues.
The interest rates in the U.S. may be less sensitive in 2023 as compared to 2022; sigh of relief for businesses. Positive business sentiments, healthy business balance sheets, growth in construction spending (private construction value in 2022 stood at $1,429.2 billion, 11.7 percent (±1.0 percent) above the $1,279.5 billion spent in 2021, Residential construction in 2022 was $899.1 billion, up by 13.3 percent (±2.1 percent) from $793.7 billion in 2021, non-residential construction touched $530.1 billion, 9.1 percent (±1.0 percent) above the $485.8 billion in 2021.) showcases minimal impact of recession in the country.
Similarly, spiked spending in the European and major Asia economics including, India, China & Japan to showcase less impact on the global demand.
Ans: Worldwide growing demand for energy, an upsurge in investments in renewable energy, and massive surge in the demand for batteries are the major factors driving the market growth.
Ans: The market is anticipated to attain a CAGR of ~6% over the forecast period, i.e., 2023 – 2035.
Ans: Extreme expenditure requirement for installation of battery energy storage systems, and need for high initial investments for the production of flow batteries are estimated to be the growth hindering factors for the market expansion.
Ans: 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.
Ans: The major players in the market are East Penn Manufacturing Co., Inc., Electrovaya Inc., Langley Holdings PLC, LG Chem, Ltd., Hitachi, Ltd., The General Electric Company, ABB Ltd, NEC Corporation, and others.
Ans: 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.
Ans: The market is segmented by technology, component, application, end-user, and by region.
Ans: The pumped hydro storage segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
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