The battery energy storage system market is projected to grow from USD 2.9 billion in 2020 to USD 12.1 billion by 2025; it is expected to grow at a CAGR of 32.8% from 2020 to 2025.
The growth of this market is expected to be driven by the prevailing trend of adopting low-carbon and less fossil fuel-based economy and ongoing renewable energy revolution, surging requirement of continuous power supply from critical infrastructures in wake of COVID-19, growing adoption of lithium-ion batteries in renewable energy sector owing to their low costs and improved performance, and increasing demand for grid energy storage systems. These factors have helped the battery energy storage system market gain traction in applications, such as utilities, residential, and commercial.
Lithium-ion battery type segment held the largest share of battery energy storage system market in 2019
The battery energy storage system industry, based on battery type, is led by the lithium-ion battery segment (in terms of size). The lithium-ion battery exhibits high energy and power density, which leads to low standby losses and high life expectancy. Due to these characteristics, lithium-ion batteries are likely to account for a major share of the battery energy storage system market by 2025. The lithium-ion-based battery energy storage systems are used in the utility application to address the demand during peak time as these systems offer high response time and can store excess energy. The COVID-19 pandemic has impacted the supply of lithium-ion batteries and raw materials from China from the start of January 2020. Major battery manufacturers, including General Electric (US), Panasonic (Japan), and Samsung SDI (South Korea), have shifted their focus on making healthcare equipment such as masks and sanitizers to combat the spread of COVID-19.
The market for battery element segment led the battery energy storage system market in 2019
The battery elements used in the battery energy storage system are in the form of modules and racks. The battery element alone constitutes 60% of the total battery energy storage system. It is the major element, where the functioning is regularized by hardware and software, which increase its efficiency. Majorly used battery types in battery energy storage systems are lithium-ion and lead-acid batteries.
APAC accounts for the largest market size during the forecast period
APAC held the largest battery energy storage system market share in 2019, followed by North America and Europe. The market in APAC mainly comprises developing economies, such as China and India, which have tremendous potential for installation of energy storage projects due to increasing renewable energy integration. APAC is expected to witness plans for electrification in remote areas, which are majorly off-grid in several countries. The use of residential energy storage technology will enable to increase access to electricity for these remote and island communities in the region. The battery energy storage system market in APAC is highly competitive with the presence of established players. These players are continually upgrading their product portfolio with the launch of technologically advanced energy storage products.
Some of the major battery energy storage system manufacturers based in Asia Pacific are Samsung SDI (South Korea), LG Chem (South Korea), Hitachi (Japan), Panasonic (Japan), and NEC Corporation (Japan).
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Source: ASDReports - Market Research
Date: Oct 12, 2020