Energy Storage System Market

Energy Storage System Market Outlook (2024 to 2034)

Worldwide sales of energy storage systems are projected to increase from US$ 50.3 billion in 2024 to US$ 87.6 billion by the end of 2034. The global energy storage system market size has been analyzed to expand at a CAGR of 5.7% from 2024 to 2034. Increasing adoption of renewable energy, governmental support and incentives, decentralization tendencies, and a growing number of microgrids are key factors driving demand for energy storage systems.

In today's energy management landscape, energy storage systems (ESSs) play a crucial role, particularly in sectors such as transportation, grid stabilization, and energy integration. This technology is indispensable for collecting, storing, and later releasing energy. Examples of energy storage mediums include batteries, pumped hydro storage, compressed air energy storage, and flywheel energy storage, all of which are integral components driving growth in the energy storage system market.

Energy storage systems operate through three main processes: energy input, energy management system (EMS), and energy output. A significant portion of energy input is sourced from renewables. An EMS plays a vital role in regulating the charging and discharging of ESS to ensure optimal energy flow and effective operation.

Energy output refers to the process of releasing stored energy to power businesses, residences, and industrial operations. It also aids in grid stabilization during periods of high demand or fluctuations in renewable energy production. ESS offers many advantages, including peak shaving, grid stability, load balancing, renewable energy integration, and backup power, thereby enhancing the overall market size of energy storage systems.

Global proliferation of electric vehicles (EVs) presents a significant opportunity for energy storage system providers. ESSs are critical for establishing fast-charging stations and managing grid impacts from EV charging infrastructure expansion. Integrating energy storage devices into EV charging networks can reduce grid load during peak charging times and ensure reliable, efficient charging services. In addition, energy storage systems facilitate the implementation of smart charging technologies, optimizing the use of renewable energy sources and reducing overall power costs for EV owners.

Report Attribute	Detail
Energy Storage System Market Size (2024E)	US$ 50.3 Billion
Forecasted Market Value (2034F)	US$ 87.6 Billion
Global Market Growth Rate (2024 to 2034)	5.7% CAGR
Canada Market Growth Rate (2024 to 2034)	5.8% CAGR
China Market Value (2034F)	US$ 9 Billion
North America Market Share (2024E)	24.4%
East Asia Market Share (2034F)	22.5%
Key Companies Profiled	ABB Ltd.; BYD Company Limited; EOS Energy Storage; Evapco Inc.; Maxwell Technologies Inc.; General Electric Company; Hitachi Ltd.; LG Chem Ltd.; NEC Corporation; Panasonic Corporation; Schneider Electric SE; Siemens AG; Tesla.

Which Market Opportunities are Energy Storage System Providers Leveraging?

“Steadily Growing Usage of Grid Storage Systems”

Renewable energy sources such as solar and wind power are increasingly integrated into grid infrastructure upgrades. However, their intermittent nature can lead to fluctuations in electricity availability. Battery energy storage devices address this challenge by storing surplus energy during periods of high generation and releasing it during peak demand or when renewables are less active. This supports grid stability and ensures a consistent electricity supply, while also enabling grid operators to optimize electricity conservation when generation exceeds demand.

These technologies enhance the flexibility and reliability of distribution, transmission, and electric power production systems. Battery energy storage systems manage asset deferral, provide frequency control, suppress harmonics, support voltage stability, and ensure power quality across electricity transmission and distribution. Grid-connected battery energy storage systems facilitate energy time-shifting, level baseloads, and reduce peak loads, thereby supporting renewable energy integration and enhancing renewable capacity assurance.

“Reduction in Costs of Lithium-Ion Batteries”

Decreasing cost of lithium-ion batteries is primarily driven by improved production efficiency, economies of scale, and technological advancements. This price reduction has made energy storage systems more accessible and affordable across various applications. With lower costs per kilowatt-hour (kWh), businesses can now invest in larger, more resilient systems capable of meeting power demands during outages or peak usage periods.

Energy storage system market growth is heavily influenced by the decreasing prices of lithium-ion batteries. This trend makes ESSs increasingly competitive, attractive, and cost-effective for ensuring a stable and reliable power supply.

What is Shrinking the Profits of Energy Storage System Providers?

“High Initial Investment and Difficulty in Maintenance and Repairs in Remote Locations”

Because grid electricity is scarce or unreliable in remote regions, installing battery energy storage systems can be challenging. Establishing a reliable power supply, possibly through solar panels or other alternative sources, is essential for initial setup and ongoing maintenance.

Routine maintenance and repairs for battery energy storage systems may be difficult in remote areas due to limited local service providers and availability of replacement parts. Harsh environmental conditions like extreme heat, high humidity, or corrosive atmospheres prevalent in isolated locations can impact the longevity and performance of battery systems, necessitating additional durability and protective measures.

Battery energy storage technologies, including lead-acid batteries, flow batteries, and lithium-ion batteries, require significant upfront investment due to their higher energy density and superior performance. While lithium-ion batteries are more costly initially, they offer advantages such as low self-discharge rates, high energy density, and reduced maintenance requirements.

Although lithium-ion battery prices are predicted to decrease in the future, their adoption is also driven by their widespread use in electric vehicles (EVs) due to their large capacity, lightweight nature, and compact size. However, the high initial costs associated with flow battery production remain a substantial barrier to the expansion of the energy storage system market size.

Country-wise Insights

The market in China is forecasted to expand at a CAGR of 5.7% from 2024 to 2034. The country is evaluated to occupy an energy storage system market share of 45.7% in East Asia by the end of 2034.

How is Rising Environmental Awareness Driving Market Growth in Canada?

“Government Incentives Promoting Production and Adoption of EVs”

Attribute	Canada
Market Value (2024E)	US$ 1.2 Billion
Growth Rate (2024 to 2034)	5.8% CAGR
Projected Value (2034F)	US$ 2.1 Billion

The market in Canada holds significant growth potential due to the rising adoption of electric vehicles (EVs). Manufacturers in Canada are exploring new opportunities for expansion as consumer preference shifts towards EVs. Several factors, including government incentives, environmental awareness, and advancements in EV technology, are driving this shift. Consumers are increasingly favoring EVs as a cleaner, more environmentally friendly alternative amid growing concerns about sustainability and reducing carbon emissions.

This energy storage system market trend not only influences consumer preferences but also presents lucrative opportunities for car manufacturers to capitalize on the expanding EV market. Canadian businesses are strategically positioning themselves by investing in EV manufacturing, infrastructure, and marketing initiatives to leverage this evolving market landscape.

What is Drawing the Attention of Energy Storage System Manufacturers toward Japan?

“Grid Expansion Initiatives to Provide Cost-Effective Energy Solutions”

Attribute	Japan
Market Value (2024E)	US$ 3 Billion
Growth Rate (2024 to 2034)	6% CAGR
Projected Value (2034F)	US$ 5.3 Billion

Developed countries such as Japan are focusing on expanding their energy grids to provide their citizens with better ways of energy with minimum cost. Heightened awareness of emerging trends is drawing several manufacturers to the country's market.

Category-wise Insights

Based on technology, demand for thermal storage systems is calculated to increase at a CAGR of 5.4% from 2024 to 2034.

What Role Does Electrochemical Technology Play in Promoting Environmental Sustainability?

“Electrochemical Systems Supporting Transition to Cleaner Energy Sources”

Attribute	Electrochemical Storage
Segment Value (2024E)	US$ 34.4 Billion
Growth Rate (2024 to 2034)	5.7% CAGR
Projected Value (2034F)	US$ 60 Billion

Electrochemical technology offers several advantages, including enhanced battery performance, renewable energy generation, and efficient energy storage. It facilitates the integration of renewable energy sources, simplifies the development of advanced energy storage systems, and supports environmentally friendly transportation through electric vehicles. Moreover, electrochemical technology plays a crucial role in reducing greenhouse gas emissions and promoting environmental sustainability.

What are the Primary Benefits of Grid Energy Storage?

“Increased Power Supply Flexibility and Reduced Electricity Waste”

Attribute	Grid Storage
Segment Value (2024E)	US$ 32.9 Billion
Growth Rate (2024 to 2034)	5.7% CAGR
Projected Value (2034F)	US$ 57.2 Billion

Several advantages come with grid energy storage, such as increased power supply flexibility, less electricity waste, better grid stability, effective frequency management, voltage support, and preservation of power quality. This capability enables the shifting of electric energy timing, peak shaving, renewable energy time-shifting, and bolstering renewable capacity, marking significant advancements in the energy sector. As a result, it is emerging as a growing trend in the market.

Market Rivalry

To obtain a competitive edge in the global environment, key players in the energy storage system market are focusing on mergers, acquisitions, collaborations, and partnerships as a means of expanding the scope of application of their products and expediting their manufacturing processes. Companies are investing heavily in emerging areas such as smart grid sensors.

• Siemens AG and LG Energy Solution, a company that manufactures storage batteries, signed a Memorandum of Understanding (MoU) in December 2021. The goal of this partnership is to digitalize the battery production process.

Fact.MR provides detailed information about the price points of key energy storage system suppliers positioned across the world, sales growth, production capacity, and speculative technological expansion, in this updated market report.

Key Segments of Energy Storage System Market Research

• By Technology :

  • Electrochemical Storage
    • Lithium-Ion Batteries
    • Lead Acid Batteries
    • Sodium Sulfur Batteries
    • Flow Batteries
    • Others
  • Thermal Storage
  • Mechanical Energy Storage
    • Pumped Hydro Energy Storage
    • Flywheel Energy Storage
    • Compressed Air & Liquid Air Energy Storage
  • Other Storage Technologies

• By Application :

  • Transportation
  • Grid Storage

• By End User :

  • Residential
  • Non-residential
  • Utilities
  • Automotive

• By Region :

  • North America
  • Latin America
  • Eastern Europe
  • Western Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa