strong textThe global battery energy storage systems market size is expected to reach USD 23.4 billion by 2027, ascending at a CAGR of 27.2% over the forecast period, according to a new report by Grand View Research, Inc. Increasing demand for backup power supply across various industries along with requirement for improved grid network utilization is likely to drive the market over the forecast period.
Battery energy storage systems find application in several sectors including data centers, telecommunication, industrial, medical, and marine. In addition, growing deployment of renewable energy sources such as wind or solar power generation has led to increased adoption of these storage systems. The system provides constant power supply while compensating for intermittent nature of renewables.
The market value chain comprises of raw material suppliers, equipment suppliers, the manufacturers in the industry, and end-use segment industries. Batteries form a major component of the system followed by cables, connectors, bus bars, and module packs, which are further utilized in the manufacturing process. Advantageous features such as easy recyclability, easy charging, favorable cost, and performance ratio define the competitiveness of the market.
Industry participants are largely emphasizing on commercialization of flywheel battery storage technology. Even though the technology is in its nascent stage, it is more economical when compared to lithium-ion or lead-acid batteries. The key reasons for this are the low maintenance cost and long service life of the flywheel technology, which compensates for the high initial investment required during its installation.
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Battery energy storage systems help the electricity suppliers to save excess power for later use, thereby improving the grid flexibility and reliability in terms of power generation, transmission, and distribution. Moreover, demand for uninterrupted power is expected to grow exponentially owing to continuous population growth, infrastructure development, and rapid industrialization over the coming years.
Battery Energy Storage System Market Report Highlights
The lithium-ion segment occupied the largest market revenue share in 2020 owing to its high energy density and declining cost of batteries
The flywheel segment is expected to be the fastest growing type segment over the forecast period owing to its longer lifespan and higher efficiency when compared to other energy storage technologies
Data centers accounted for a dominant market position in 2020 owing to rapid development in infrastructure along with increasing requirement of continuous power supply at these facilities
In Asia Pacific, the market was valued at USD 1.4 billion in 2020 and is expected to dominate the market over the forecast period owing to the industrial growth and rising demand for power from developing economies such as China and India.
In the U.S., the market is projected to witness prominent growth on account of an increasing number of battery energy storage system manufacturers across the country. For instance, U.S. based electric services company NextEra Energy has integrated a 10-MW capacity battery storage with a large scale solar power plant, providing clean energy through a solar-plus-storage facility.
The cost of lithium ion batteries has decreased by 80.0% between 2010 to 2020 reaching approximately $200/kWh for small installations and is predicted to reach $96/kWh within the next seven years. Lithium-ion batteries offer the best option today in terms of cost, performance, calendar and cycle life, and technology maturity.
While lead-acid batteries have a high Manufacturing Readiness Level (MRL) and Technology Readiness Level (TRL), their cycle life is limited, leading to a life of fewer than 3 years assuming one cycle per day. Flywheel batteries are comparatively new technology and advancements are being made to compete with other battery technologies. However, with further reduced cost and technological up-gradation, flywheel battery storage is anticipated to grow in the coming future.
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Flywheel battery technology is expected to witness the fastest growth on account of continuous uninterrupted power supply to the grid along with the instant response, frequency regulation, and quality improvement in terms of electricity. Flywheel batteries are more economical than other battery solutions. The main reasons for this are the long service life and low maintenance costs of the flywheel compared to the battery, which compensates for the higher purchase costs at the beginning of the installation.Key companies are indulging in organic and inorganic growth strategies to enhance their foothold in the market through diversification of their product offerings. Some of the prominent players in the battery energy storage systems market include:
LG Chem Ltd.
BYD Company Limited
Contemporary Amperex Technology Co. Limited
AES Energy Storage
Hoppecke Batteries Inc.
Grand View Research has segmented the global battery energy storage system market on the basis of application, product:
Battery Energy Storage System Application Outlook (Revenue, USD Million, 2016 - 2027)
Battery Energy Storage System Battery Type Outlook (Revenue, USD Million, 2016 - 2027)
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.
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