BY BEN COOK:
The global energy storage market is set to grow in value by more than 80% in the next four years.
Projections published by Global Data this month indicated that the value of the global battery storage market would hit $11.04bn in 2025, around $5bn higher than its current level.
So, with substantial growth on the horizon, which markets will undergo the most significant expansion?
All eyes will be on the Asia-Pacific region. The value of the Asia-Pacific battery storage market is currently around $2.75bn, but this will rocket to $6.01bn in 2025, representing growth of 118%.
This means growth in Asia-Pacific will outstrip growth in Europe, the Middle East and Africa (EMEA), as well as in the Americas.
This growth will be largely driven by the markets in China, Japan, South Korea and Australia.
What is the current state of play in these four markets? Let’s take a look at them individually and, in doing so, bear in mind that cumulative global energy storage capacity stands at approximately 186.1 GW.
Approximate installed energy storage capacity: 33.1GW
Overview: The biggest energy storage market in the world. Pumped hydro represents 91.6% of its total capacity. That said, the domination of pumped hydro is in decline. Electrochemical battery storage’s share of the total market is growing and is now reached 6.8%. China’s President Xi has pledged that the country will be carbon neutral by 2060, meaning that energy storage companies will be jockeying for position as they look to grab a sizeable slice of this new market.
Approximate installed energy storage capacity: 28.5GW
Overview: The second biggest energy storage market in the world. Among recent significant trends has been the increase in private households investing in solar-plus-batteries for resilience in a country that has a tendency to experience earthquakes and typhoons. With an eye on untapped markets, it should be noted that the use of batteries for ancillary services and flexibility is pretty much unheard of in Japan so far.
Approximate installed energy storage capacity: 4.7GW
Overview: The deployment of energy storage for non-residential uses is on the rise in South Korea. Indeed, in 2018 there were higher deployment levels in the non-residential segment (compared to the residential segment) for the first time ever. Meanwhile, in 2018, South Korea accounted for around 50% of the world’s lithium-ion battery energy storage system market.
Approximate installed energy storage capacity: 2.7GW
Overview: Dispatchable energy storage has been listed as ‘high priority’ by the nation’s independent infrastructure adviser Infrastructure Australia for the first time and it is forecast that 6–19GW of new dispatchable storage will be required by 2040. You can read a more in-depth analysis of Australia here
These four nations will be hotbeds of energy storage growth between now and 2025. To put it in context, in four years’ time it is anticipated that the Asia-Pacific region will account for 54% of the value of the global energy storage market.
While the Asia-Pacific energy storage market will more than double in size to $6.01bn by 2025, in contrast, over the same period, the value of the EMEA market is expected to grow by around 58% to $3.16bn, while the energy storage market in the Americas will grow just 24% to $1.87bn.
The drive to scale up the use of energy storage is gathering pace all around the world. But it is in the Asia-Pacific market where most investors will be placing the largest bets in the next four years.