Electricity Market Modernization and Cost Reductions Powering the Global Grid Battery Energy Storage Market

Electricity Market Modernization and Cost Reductions Powering the Global Grid Battery Energy Storage Market

Competitive Strategies from Optimization Services, Flexible System Designs, and Co-located Storage Capturing Growth Opportunities

RELEASE DATE
15-Mar-2021
REGION
Global
Research Code: K55D-01-00-00-00
SKU: EG02137-GL-MT_25297

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Description

Power utilities, system operators, and authorities worldwide increasingly regard grid battery energy storage as a core component of energy expansion plans. Key factors driving this consideration are increasing price competitiveness owing to declining technology costs, including for batteries and balance of plant, and the continual expansion of intermittent renewables.

Grid battery energy storage market fundamentals proved to be adequately strong against the COVID-19 turmoil. In 2020, the global market expanded 47.3% with 2.4 GW of new power capacity. A robust outlook is expected for the decade ahead. Frost & Sullivan forecasts the annual power capacity to reach 19.3 GW by 2030, amounting to 134.6 GW/437.4 GWh of cumulated capacity, and the annual investment to rise from $2 billion in 2020 to $15.94 billion by 2030.

Most grid storage active systems were created to supply quick power to frequency regulation services, requiring high-power and short-duration batteries. Frost & Sullivan expects future evolutions in regulations and market designs to acknowledge and properly compensate grid storage for other use cases, especially as capacity assets that can replace or defer gas peaker plants, new renewables generation plants, and transmission lines. Consequently, more battery energy storage systems with larger duration profiles are deemed to enter the market as capacity assets.

Market development is poised to remain uneven and highly concentrated in selected countries with supportive market dynamics and regulations. By 2030, only three countries, i.e., China, the United States, and Australia, are likely to account for almost two-thirds of the global market’s annual power additions. Meanwhile, in most countries, the economics for grid battery storage is expected to remain challenging pending further cost reductions and market design modernization.

Asia and North America are expected to be the leading regions, accounting for 46.2% and 32.4%, respectively, of the total grid battery storage power capacity by 2030. Europe’s participation is expected to fall from 25.6% in 2020 to 13.3% by 2030. With few exceptions of more progressive countries, opportunities in Latin America, Africa, and the Middle East are projected to remain limited.

This study provides regional forecasts and analyses of grid battery storage capacity and investment evolutions in the next 10 years with further details for main countries. It also presents the industry value chain and competitive analysis of key participants. Additionally, the study highlights growth opportunities for industry participants, including hybrid power plants, the use of second-hand batteries, and optimization services.

Author: Maria Benintende

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Table of Contents

Why Is It Increasingly Difficult to Grow?

The Strategic Imperative 8™

The Impact of the Top Three Strategic Imperatives on the Grid Battery Energy Storage Industry

Growth Opportunities Fuel the Growth Pipeline Engine™

Key Findings

Scope of Analysis

Scope of Analysis—Applications

Regional Segmentation

Key Growth Metrics

Value Chain Analysis

Key Companies

Growth Drivers

Growth Drivers Analysis

Growth Drivers Analysis (continued)

Growth Drivers Analysis (continued)

Growth Restraints

Growth Restraints Analysis

Growth Restraints Analysis (continued)

Forecast Assumptions

Capacity Deployment Forecast—Grid Battery Energy Storage

Investment and Annual Capacity Additions Forecast—Grid Battery Energy Storage

Capacity and Investment Forecast Analysis—Grid Battery Energy Storage

Annual Capacity Additions Forecast by Region—Grid Battery Energy Storage

Capacity Deployment Forecast by Region—Grid Battery Energy Storage

Investment Forecast by Region—Grid Battery Energy Storage

Annual Capacity Additions Forecast by Country—Grid Battery Energy Storage

Capacity Deployment Forecast Analysis by Region—Grid Battery Energy Storage

Total Cost per kWh Trends and Forecast Analysis—Grid Battery Energy Storage

Competitive Environment

Installed Capacity Share—Grid Battery Energy Storage

Installed Capacity Share Analysis—Grid Battery Energy Storage

Key Growth Metrics for Grid Battery Energy Storage—North America

Capacity Deployment Forecast—Grid Battery Energy Storage: North America

Investment and Annual Capacity Additions Forecast—Grid Battery Energy Storage: North America

Forecast Analysis—Grid Battery Energy Storage: North America

Annual Capacity Additions Forecast by Country—Grid Battery Energy Storage: North America

Capacity Deployment Forecast by Country—Grid Battery Energy Storage: North America

Forecast Analysis in Key Countries—Grid Battery Energy Storage: North America

Forecast Analysis in Key Countries—Grid Battery Energy Storage: North America (continued)

Key Growth Metrics for Grid Battery Energy Storage—Europe

Capacity Deployment Forecast—Grid Battery Energy Storage: Europe

Investment and Annual Capacity Additions Forecast—Grid Battery Energy Storage: Europe

Forecast Analysis—Grid Battery Energy Storage: Europe

Annual Capacity Additions Forecast by Country—Grid Battery Energy Storage: Europe

Capacity Deployment Forecast by Country—Grid Battery Energy Storage: Europe

Forecast Analysis in Key Countries—Grid Battery Energy Storage: Europe

Forecast Analysis in Key Countries—Grid Battery Energy Storage: Europe (continued)

Key Growth Metrics for Grid Battery Energy Storage—Asia

Capacity Deployment Forecast—Grid Battery Energy Storage: Asia

Investment and Annual Capacity Additions Forecast—Grid Battery Energy Storage: Asia

Forecast Analysis—Grid Battery Energy Storage: Asia

Annual Capacity Additions Forecast by Country—Grid Battery Energy Storage: Asia

Capacity Deployment Forecast by Country—Grid Battery Energy Storage: Asia

Forecast Analysis in Key Countries—Grid Battery Energy Storage: Asia

Forecast Analysis in Key Countries—Grid Battery Energy Storage: Asia (continued)

Key Growth Metrics for Grid Battery Energy Storage—Rest of the World

Capacity Deployment Forecast—Grid Battery Energy Storage: Rest of the World

Investment and Annual Capacity Additions Forecast—Grid Battery Energy Storage: Rest of the World

Forecast Analysis—Grid Battery Energy Storage: Rest of the World

Annual Capacity Additions Forecast by Region—Grid Battery Energy Storage: Rest of the World

Capacity Deployment Forecast by Region—Grid Battery Energy Storage: Rest of the World

Forecast Analysis by Region—Grid Battery Energy Storage: Rest of the World

Forecast Analysis by Region—Grid Battery Energy Storage: Rest of the World (continued)

Growth Opportunity 1: Solar PV-plus-Storage Drives Demand for Battery Storage

Growth Opportunity 1: Solar PV-plus-Storage Drives Demand for Battery Storage (continued)

Growth Opportunity 2: Co-located Storage for Conventional Generation Optimization

Growth Opportunity 2: Co-located Storage for Conventional Generation Optimization (continued)

Growth Opportunity 3: Second-life EV Batteries for Grid Battery Storage

Growth Opportunity 3: Second-life EV Batteries for Grid Battery Storage (continued)

Growth Opportunity 4: Adjustable Storage to Leverage Evolving Market Conditions

Growth Opportunity 4: Adjustable Storage to Leverage Evolving Market Conditions (continued)

Growth Opportunity 5: Optimization Services for Merchant Battery Storage

Growth Opportunity 5: Optimization Services for Merchant Battery Storage (continued)

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Related Research
Power utilities, system operators, and authorities worldwide increasingly regard grid battery energy storage as a core component of energy expansion plans. Key factors driving this consideration are increasing price competitiveness owing to declining technology costs, including for batteries and balance of plant, and the continual expansion of intermittent renewables. Grid battery energy storage market fundamentals proved to be adequately strong against the COVID-19 turmoil. In 2020, the global market expanded 47.3% with 2.4 GW of new power capacity. A robust outlook is expected for the decade ahead. Frost & Sullivan forecasts the annual power capacity to reach 19.3 GW by 2030, amounting to 134.6 GW/437.4 GWh of cumulated capacity, and the annual investment to rise from $2 billion in 2020 to $15.94 billion by 2030. Most grid storage active systems were created to supply quick power to frequency regulation services, requiring high-power and short-duration batteries. Frost & Sullivan expects future evolutions in regulations and market designs to acknowledge and properly compensate grid storage for other use cases, especially as capacity assets that can replace or defer gas peaker plants, new renewables generation plants, and transmission lines. Consequently, more battery energy storage systems with larger duration profiles are deemed to enter the market as capacity assets. Market development is poised to remain uneven and highly concentrated in selected countries with supportive market dynamics and regulations. By 2030, only three countries, i.e., China, the United States, and Australia, are likely to account for almost two-thirds of the global markets annual power additions. Meanwhile, in most countries, the economics for grid battery storage is expected to remain challenging pending further cost reductions and market design modernization. Asia and North America are expected to be the leading regions, accounting for 46.2% and 32.4%, respectively, of the total grid battery storage power capacity by 2030. Europes participation is expected to fall from 25.6% in 2020 to 13.3% by 2030. With few exceptions of more progressive countries, opportunities in Latin America, Africa, and the Middle East are projected to remain limited. This study provides regional forecasts and analyses of grid battery storage capacity and investment evolutions in the next 10 years with further details for main countries. It also presents the industry value chain and competitive analysis of key participants. Additionally, the study highlights growth opportunities for industry participants, including hybrid power plants, the use of second-hand batteries, and optimization services. Author: Maria Benintende
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No Index No
Podcast No
Author Maria Benintende
Industries Energy
WIP Number K55D-01-00-00-00
Is Prebook No
GPS Codes 9AFE-A4,9AFF-A4,9B00-A4,9851,9852