The global Battery Energy Storage System (BESS) Market is forecast to reach $11.7 billion by 2026, growing at CAGR of 31.28% from 2021 to 2026 owing to the high adoption of grid energy storage system and rising demand for reliable and continuous power supply from various sectors. Over the years, BESS technology has emerged as a key product for transforming as well as storing, distributing the excess electricity for later use and for reducing the emission of CO2. Furthermore, growing population, rapid industrialization and urbanization, increasing usage of Battery Energy Storage technologies such as lithium-ion battery, flow batteries, lead-acid batteries and others have accelerated the growth of Battery Energy Storage System industry. Apart from that, Government’s stringent environmental policies also play a crucial role in the growth of Battery Energy Storage System market. Moreover, the exponentially increasing popularity of renewable energy sources for energy generation and carbon emission reduction provides a major growth factor to the market. Hence, the above-mentioned factors are set to boost the Battery Energy Storage System market size during the forecast period 2021-2026.
Battery Energy Storage System Market Segment Analysis – By Battery Type
Battery Energy Storage System Market is segmented into Lithium-ion batteries, Sodium-Sulfur batteries, Lead-acid batteries, Zinc bromine batteries, Flow batteries and others, based on battery type. The market for lithium-ion held the highest market share around 43% in 2020 and it is estimated to witness the significant market growth during the forecast period 2021-2026. High energy density, high EE, high storage capacity and longer life cycle, low maintenance and cost effectiveness of lithium-ion batteries are the key factors triggering the growth of this battery type. In addition, growing developments along with high investments and launches of lithium-ion BESS drive the growth of this segment. In January 2021, Vistra announced that its Moss Landing Energy Storage Facility, which is world’s largest utility scale battery energy storage system, is active now. The current capacity of this lithium-ion battery is 300 MW/1200 MWh, which will rise to 400MW/1600MWh by August 2021 after completing the II phase of construction. Hence, owing to the above-mentioned points, the lithium-ion segment will grow with the fastest growth rate among all the battery types of this segment during the forecast period.
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Battery Energy Storage System Market Segment Analysis – By Application
By application, battery energy storage system market is segmented into Residential, Commercial, Industrial, Utility and others. According to Battery Energy Storage System market report by IndustryARC, Residential application is estimated to grow with a significant amount of growth, at a CAGR of 14.98% during the forecast period 2021-2026. Self-consumption of rooftop solar photovoltaic generation as well as to store and use the back-up power to continue all the residential applications without any hurdles are the main drivers behind the growth of this segment. According to a report of Wood Mackenzie and US Energy Storage Association (ESA) on US Energy Storage Monitor, the deployment of BEES for residential application hit 44.4MW, which is 10% more from the final quarter of 2019, as the customers of the emerging markets deployed the storage system for resilience purpose. In addition, new technologically advanced product launches effect the demand for BESS positively. For instance, In June 2020, Tesla announced about the launch of a new solar system for residential applications with the lowest cost. Such launches enhance the growing demand for battery energy storage system in the residential sector.
Battery Energy Storage System Market Segment Analysis – By Geography
APAC region held the highest market share of 30% of global Battery Energy Storage System Market in 2020 and also estimated to witness significant market growth during the forecast period 2021-2026. Rapid urbanization, industrialization and increasing requirement for electrification in remote areas are the key factors behind the growth of this market in this region. Renewable energy is becoming more cost effective over the year, due to which developing countries of this region are investing heavily on renewable energy storage system. In July 2020, the Neyveli Lignite Corporation (NLC) India Limited announced about the confirmation of commissioning of a 20MW solar power project integrated with 8MWh BESS by the electricity department of Andaman and Nicobar. This is one of the first projects that include solar power and BESS. Apart from that, increasing environmental awareness among the people plays a major role in the growth of this market. According to a report of International Energy Agency (IEA), published on January 2020, alone in India, solar PV capacity can reach approximately 800 GW by the year 2040, which will ultimately reduce the power related CO2 emissions and air pollution. Hence, the above-mentioned factors are poised to create tremendous growth opportunities for APAC Battery Energy Storage System Market from 2021 to 2026.
Battery Energy Storage System Market Drivers
Rising Investments towards BESS Technology and Renewable Energy is driving the growth of this market:
Growing investment is one of the major driving factors behind the growth of Battery Energy Storage System Market. For instance, in October 2020, Australian Federal and Regional Governments offered $15.35 million for 50 MW/75MWh battery energy storage system (BESS) project in Western Sydney, Australia. Similarly, in April 2021, ACEN announced about their investment plan for the development of solar, wind and BESS projects in order to increase its renewable energy portfolio. Apart from this, ACEN is already investing in BESS through its renewable energy laboratory in Mariveles, Bataan and this facility is going to test various technologies in solar and battery energy storage system. Furthermore, in September 2020, the Tennessee Valley Authority acquired its first grid scale, battery energy storage system, which is installed in Vonore, Tennessee, near an industrial complex and is estimated to be active by the year 2022. Thus, these types of investments towards BESS and renewable energy fuel the adoption rate of battery energy storage system, thereby driving the Battery Energy Storage System market share in the forecast period 2021-2026.
Rising Demand for Grid Systems for Energy Storage across the world is fuelling the growth:
The growth of battery energy storage system market is mainly driven by the high demand for grid storage systems for the storage of renewable energy, especially solar and wind energy. Various reasons such as weather changes, wind fluctuations, lead to variation in the amount of energy generation which leads to growing requirement for the grid systems in order to store the energy. Battery energy storage system helps the grid to store the excess generated electricity and uses that stored energy when there is an electricity deficiency. The adoption of these storage systems offer better reliability and greater flexibility in terms of generation, transmission and distribution of electricity. All the above-mentioned factors drive the adoption of these battery energy storage systems, thereby fuelling the growth of the battery energy storage system industry during 2021-2026. In June 2020, Broad Reach Power announced about its plan of building 15utility-scale battery storage plant sites in areas near Houston and Odessa in Texas by the end of 2020 and each site will be capable of storing and distributing up to 10MW of power.
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Battery Energy Storage System Market Challenges
Thermal Runaway of Li-Ion Battery is one of the major growth harming factor for BESS market:
Thermal runaway is a major risk for Li-ion battery technology, which is a major challenge for battery energy storage system market. The major reasons behind this thermal runaway are internal cell defects, mechanical failures or damage or excess voltage, which leads to high temperatures, build-up of gas and potential explosive rupture of the battery cell, resulting in fire or explosion. If not disconnected, thermal runaway can spread from one cell to other, causing more damage. This challenge is poised to impede the battery energy storage system markets growth during the forecast period 2021-2026.
Battery Energy Storage System Market Landscape
Partnerships and acquisitions along with product launches are the key strategies adopted by the players in the Battery Energy Storage System Market. As of 2020, the Battery Energy Storage System industry outlook is consolidated with the top players. Battery Energy Storage System top 10 companies include:
In March 2021, Tesvolt, a German BESS manufacturer, launched a new commercial battery storage system TS-1 HV 80, that comes with integrated energy management system (EMS) and inverter technology. It can be used for a wide range of applications including intelligent peak load capping, optimized self-consumption, supplying back-up power and others.
In May 2020, Northvolt launched Voltpack Mobile System, a new lithium-ion battery energy storage solution. It’s a zero-emission alternative, which can replace diesel generators. This product will act as a modular power supply solution that can be used to meet the energy and power requirements of a wide range of market scenario including powering remote electricity grids, reinforcing weak grids, offering support to EV charging and delivering various other grid services such as balancing power, flexibility, or other ancillary services.
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Asian Battery Energy Storage System Market dominated the industry with a market share of more than 30% in 2020, rapid urbanization along with industrialization and growing need for electricity in remote areas of developing countries are the key factors, boosting the market growth.
The major driving factor in the Battery Energy Storage System Market is growing adoption of grid storage system and rising demand for uninterrupted power supply during the forecast period 2021-2026.
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Next Generation Energy Storage Systems Market
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