The rising requirement for reducing the reliance on gas, coal, and oil for power generation is massively pushing up the demand for energy storage systems. These systems are required in renewable-energy power plants for dealing with the variable power outputs provided by renewable energy sources. These systems smoothen out the power supply, thereby ensuring that the electricity needs are met during the peak hours. Apart from this, storage technologies also enable quick power discharge to the grid.
This rapid response is necessary for ensuring that the grid remains stable during hours of peak energy demand. Unlike the conventionally used fossil fuel-based energy production systems that take a long time to produce and deliver power, these storage technologies help utilities save time. As a result, the global energy storage market size stood at 171,039.3 Megawatts (MW) in 2019 and it is predicted to rise to 240,956.9 MW by 2030. According to the estimates of the market research company, P&S Intelligence, the market will progress at a CAGR of 3.3% from 2020 to 2030.
The other major factors driving the demand for these technologies the soaring prices of traditionally produced energy across the world, falling costs of batteries, and the escalating pollution levels because of the extensive usage of fossil fuels for power production. In several countries, power plants are operating at full capacities in order to meet the soaring energy demand.
This is propelling the cost of electricity. Additionally, several constraints such as high downstream and logistics costs and the unavailability of a regular and continuous fuel supply are also causing massive fluctuations in energy prices. This is pushing up the requirement for energy conservation, which is, in turn, fueling the growth of the energy storage market. Depending on type, the market is categorized into mechanical, thermal, chemical, and electrochemical. Out of these, the mechanical category held the largest market share between 2015 and 2019.
Geographically, the energy storage market is expected to boom in the Asia-Pacific (APAC) region in the forthcoming years. This will be because of the increasing engineering, procurement, and construction (EPC) activities in the regional countries such as China, India, and Japan. In addition to this, the burgeoning requirement for stable and smart grids and the increasing production of renewable energy are also driving the demand for energy storage systems in the region.
Hence, it can be safely said that the market will grow massively in the upcoming years, primarily because of the increasing generation of renewable energy, lack of stable grids in several countries, and fluctuating prices of conventional energy sources such as oil and coal.
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