China and the United States lead the way! The global energy storage market will grow at a compound annual growth rate of 21% by 2030, reaching 137GW/442GWh

Bloomberg New Energy Finance (BNEF)'s latest Global Energy Storage Outlook report for the first half of 2024 estimates that global energy storage deployment will add more than 100GWh of capacity this year for the first time ever.

In 2023, excluding pumped storage, the global new capacity is 45GW/97GWh, which means that the new capacity is mainly the deployment of battery energy storage.

This growth will be driven primarily by China, which once again became the world’s largest energy storage market, and where prices are also at record lows. Turnkey energy storage system costs fell 43% in February from last year to an all-time low of $115 per kilowatt-hour.

The report predicts that the global energy storage market will grow at a compound annual growth rate of 21% to 137GW/442GWh by 2030. During the same period, the global solar and wind energy markets are expected to grow at a compound annual growth rate of 9% and 7%, respectively.

The second largest market for ESS is the United States, where government targets, utility procurement and attractive commercial economics in places like Texas are likely to be driving forces. In Europe, the Middle East and Africa, residential batteries will continue to be the largest source of energy storage demand, especially in Germany and Italy, as well as markets such as Austria, Switzerland, Belgium, Sweden, Spain and the United Kingdom.

The Bloomberg New Energy Finance report noted that much of the growth in energy storage investment was driven by mandates and targeted subsidies, from China’s solar and wind power hosting mandates to the Inflation Restraint Act (IRA) and state-level policies in the U.S. New support programs have also emerged in Europe, Australia, Japan, South Korea and Latin America.

Regarding the decline in energy storage costs in China, the report identifies lithium iron phosphate (LFP) batteries as the main driver, as these batteries do not use nickel and continue to take market share from lithium-ion batteries that use nickel manganese cobalt (NMC). By 2030, nickel manganese cobalt (NMC) is expected to account for only 1% of the global market share.

In addition, the expansion of LFP battery manufacturing capacity, led by Chinese battery companies, is also considered an important reason for the global cost reduction.

The report noted that manufacturers outside of China that have traditionally specialized in nickel-based lithium-ion batteries are also seeking to start using lithium iron phosphate (LFP) to produce ESS products, with LG Energy Solution, Samsung SDI, Panasonic and Freyr representing this trend.

According to a new report from the International Energy Agency (IEA), rapid expansion of batteries is critical to achieving the goals outlined at COP28, with batteries needing to lead a six-fold increase in global energy storage to help the world meet the 2030 goals outlined at COP28.

(Source: BNEF Global Energy Storage Network, New Energy Network Comprehensive)