Battery Energy Storage Market 2023 – 2030 by Ownership (Customer Owned, Third-Party Owned, Utility Owned), Energy Capacity,Element, Battery Type (Lithium-ion, Advanced Lead Acid, Flow), Connection Type (On-Grid and Off-Grid) - Partner & Customer Ecosystem (Product Services, Proposition & Key Features) Competitive Index & Regional Footprints by MarketDigits

The estimated value of the global battery energy storage system market in 2023 is USD 5.4 billion, and it is projected to reach USD 17.5 billion by 2030, with a compound annual growth rate (CAGR) of 26.4% during the forecast period. The market is witnessing expansion due to various factors, including the increasing demand for grid energy storage systems as part of ongoing grid modernization efforts, the growing use of lithium-ion batteries, and the rising adoption of low-carbon and less fossil fuel-dependent economies. Additionally, the ongoing revolution in renewable energy is contributing to the growth of this market.

Battery Energy Storage System Market Trends
Driver: Accelerated deployment of grid energy storage systems in ongoing grid modernization on projects
Grid modernization initiatives often involve the integration of renewable energy sources like solar and wind power into the grid. However, these sources are intermittent, resulting in fluctuations in power supply. Battery energy storage systems help address this challenge by storing excess energy during periods of high generation and releasing it during times of high demand or when renewable sources are not actively generating electricity. This helps stabilize the grid and ensure a reliable power supply. These systems also enhance the reliability and flexibility of electricity supply systems by providing benefits such as asset deferral, frequency regulation, harmonic suppression, voltage support, power quality, electric energy time-shifting, baseload leveling, peak shaving, renewable energy time-shifting, and renewable capacity firming.

Restraint: High initial investment costs of installing battery energy storage systems
The installation of battery energy storage systems, including technologies like lithium-ion batteries, flow batteries, and lead-acid batteries, requires significant initial investment due to their high energy density and improved performance. Although lithium-ion batteries offer advantages such as high energy density, low self-discharge rates, and low maintenance requirements, they are costly. However, it is anticipated that the costs of lithium-ion batteries will decrease in the future. These batteries are also used in electric vehicles (EVs) due to their lightweight, compact size, and large capacity. Moreover, the manufacturing of flow batteries incurs high initial investment costs, which can hinder market growth. Additionally, supporting infrastructure like power conversion systems, control systems, thermal management systems, and safety measures further contribute to the overall cost of the system. For small- and medium-sized enterprises, the extensive investment required for flow batteries, including capital costs, component costs, material costs, installation costs, and repair and maintenance costs, poses a significant financial burden.

Opportunity: Reduction in prices of lithium-ion batteries
The cost of lithium-ion batteries has significantly decreased due to technological advancements, economies of scale, and improved manufacturing efficiency. This reduction in prices has made battery energy storage systems more affordable and accessible for various applications. The lower cost per kilowatt-hour (kWh) of energy storage enables businesses to invest in larger and more robust systems, ensuring they have sufficient capacity to meet their power needs during outages or peak demand periods. Furthermore, the declining prices of lithium-ion batteries have a significant impact on the growth of the battery energy storage system market, making them more affordable, competitive, and attractive solutions for ensuring reliable and uninterrupted power supply.

Challenge: Difficulties pertaining to installation of battery energy storage systems in remote and isolated locations
Installing battery energy storage systems in remote areas poses challenges due to limited or unreliable access to grid power. Establishing a reliable power source for initial installation and subsequent maintenance activities may be necessary, which could involve alternative energy sources like solar panels. Additionally, providing regular maintenance and servicing for battery energy storage systems in remote areas can be challenging due to the lack of local service providers and limited access to spare parts

Battery energy storage system Market: Key Trends
The leading players in the BESS market are BYD Company Limited, SAMSUNG SDI Co., Ltd., LG Energy Solutions Co., Ltd., and Panasonic Corporation. These companies demonstrate battery technology advancements with a wide range of products and a strong global presence.
Lithium-ion batteries dominated the battery energy storage systems market in 2022.

Lithium-ion batteries hold the largest market share in the battery energy storage system market due to their high energy density, enabling them to store a significant amount of energy in a compact and lightweight package. They also offer a longer cycle life compared to other battery technologies, withstanding numerous charge-discharge cycles without significant performance degradation. Additionally, lithium-ion batteries exhibit excellent efficiency, resulting in reduced energy losses and improved overall system performance, making them a cost-effective solution.
Utility-owned battery energy storage systems are expected to hold the largest market share during the forecast period.

The increasing demand to meet peak electricity requirements is driving the growth of utility application in the market. Utility-owned battery energy storage systems (BESS) play a vital role in providing power quality, frequency, and voltage control services in response to sudden fluctuations in energy supply. These systems enable grid operators to store excess electricity generated from renewable sources, ensuring efficient energy management. The growing need for reliable and efficient electricity supply in various regions, coupled with the rising demand for renewable energy, is fueling the high market demand for battery energy storage systems in the utility sector.
Battery energy storage systems with a capacity above 500 MWh are expected to contribute the largest market size from 2023 to 2028.

Battery energy storage systems with capacities exceeding 500 MWh held the largest market share primarily due to their suitability for utility-scale applications, their ability to support grid stability and reliability, and their role in efficiently integrating and balancing intermittent renewable energy sources. These larger systems can store and release significant amounts of energy, meeting the demands of large-scale power grids and enabling the efficient utilization of renewable energy. Moreover, economies of scale and the increasing focus on decarbonization and clean energy systems are driving the demand for battery energy storage systems with capacities above 500 MWh, leading to their dominant position in the market.
Asia Pacific accounted for the largest share of the battery energy storage system market in 2022.

Key Market Players
The major companies in the battery energy storage system market, including BYD Company Limited, SAMSUNG SDI Co., Ltd., LG Energy Solutions Co., Ltd., and Panasonic Corporation, have utilized organic and inorganic growth strategies such as product launches, acquisitions, and partnerships to strengthen their market position.

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In this report, the overall battery energy storage system market has been segmented based on Input energy sources, storage system, element, battery type, connection type, ownership, energy capacity, application, and region.

Segment Subsegment
 
By Element

• Battery
• Other Elements

By Battery Type

• Lithium-Ion Batteries
• Advanced Lead-Acid Batteries
• Flow Batteries
• Others

By Connection Type

• On-grid
• Off-grid

By Ownership

• Customer-Owned
• Third-Party Owned
• Utility-Owned

By Energy Capacity

 • Below 100 MWh
• Between 100 to 500 MWh
• Above 500 MWh

By Application

• Residential
• Commercial
• Utility

By Region

North America
o US
o Canada
o Mexico
• Europe
o UK
o Germany
o France
o Ireland
o Rest of Europe
• Asia Pacific
o China
o Japan
o Australia
o India
o South Korea
o Rest of Asia Pacific
• Rest of the World
o Middle East & Africa
o South America

Recent Developments
• General Electric announced in June 2022 the expansion of its renewable hybrid factory, increasing manufacturing capacity for solar and battery energy storage power electronics systems to 9 GW per year, a three-fold increase from the current capacity.
• Toshiba Corporation introduced the 125VDC SCiB Energy Storage System (ESS) in May 2022. This system combines the reliability of Lithium Titanium Oxide (LTO) battery chemistry with a flexible and expandable cabinet design, making it suitable for integration with Uninterruptible Power Systems (UPS) or DC Load applications.
• LG Energy Solution completed the acquisition of NEC Energy Solutions in February 2022. NEC Energy Solutions, a grid battery integrator based in the United States, is now part of LG Energy Solution's business portfolio. This acquisition strengthens LG Energy Solution's Energy Storage System (ESS) offerings and expands its market presence.