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Energy storage market to grow 15-fold by 2030

Energy storage market to grow 15-fold by 2030

3 November 2023

Energy storage capacity is on track for exponential growth globally. This is what the latest projections from research firm BloombergNEF point to. Energy storage facilities are expected to reach a total accumulation of 411 gigawatts (or 1,194 gigawatt-hours) by the end of 2030. This figure represents an impressive 15-fold increase from the 27GW/56GWh of storage that was online at the end of 2021.

BNEF's second half 2022 report on the energy storage market predicts an increase of 13%. This would be the projected capacity growth by 2030 compared to previous estimates. This increase, which equates to an additional 46GW/145GWh, is mainly driven by recent policy developments. 

One of the key developments is the US Inflation Reduction Act. This is a landmark initiative that earmarks more than $369 billion for clean technologies. The European Union's REPowerEU plan, which sets ambitious targets to reduce dependence on Russian gas, also plays a key role.

In the US, the passage of the Inflation Reduction Act in August 2022 has significantly accelerated the market. This legislation earmarks large volumes of funds for tax credits for wind, solar and storage. According to BNEF, this law will drive the construction of around 30GW/111GWh of energy storage between 2022 and 2030. It is true that the new tax credits promise continued long-term growth. However, supply chain constraints may impact deployment expectations until 2024.

In Europe, the Russian invasion of Ukraine has had a marked effect on the deployment of energy storage. Historically high electricity prices are driving consumers to consider new sources of energy supply, driving the residential storage market in the short term. A significant increase in utility-scale storage installation is expected from 2025, aligned with the ambitious renewable energy targets of the REPowerEU plan and the renewed focus on energy security in the UK.

BNEF forecasts indicate that most of the energy storage built up to 2030, equivalent to 61% of megawatts, will be used for energy transfer, i.e. to frontload or delay the dispatch of electricity. Projects combining renewables with storage, especially those involving solar power, are becoming commonplace around the world.

Steady growth in customer installation of batteries is anticipated, both in homes and in commercial and industrial settings. Germany and Australia currently lead the field, with significant markets in Japan and California. BNEF forecasts that residential and business energy storage will account for a quarter of all storage installations globally by 2030.

Conclusions

The rapid evolution of battery technology is a key driver of the energy storage market. Although several different technologies exist, such as compressed air and thermal energy storage, lithium-ion batteries currently dominate. They are expected to continue to lead the market until at least the 2030s, mainly due to their price competitiveness, established supply chain and proven track record. However, if new technologies overtake lithium-ion, total energy storage consumption could be even higher.

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