Skip to main content

Global energy storage capacity predicted to surge every year in 2020s

Research firm predicts U.S. and China will drive global growth in cumulative capacity, which should top 740 GWh by the end of the decade.

EDF battery storage project

EDF's West Burton B battery storage in Nottinghamshire is one of Europe's largest battery storage projects.

Energy storage is poised for a decade-defining boom, with capacity set to grow by almost a third worldwide every year in the 2020s to reach around 741 gigawatt-hours by 2030, according to analyst Wood Mackenzie.

The firm's latest forecasts for the burgeoning sector released last week point to a 31 percent compound annual growth rate in energy storage capacity in the 2020s. 

Growth will be concentrated in the United States, which will make up just under half of global cumulative capacity by 2030, at 365 GWh, the analysis predicts, while front-of-the-meter energy storage will continue to dominate annual deployments, accounting for around 70 percent of global capacity additions to the end of the decade.

The U.S. front-of-the-meter market is set to surge through 2021 due to significant short-term resources planned before slowing slightly through 2025. Beyond 2025, growth will become steadier as wholesale market revenue streams grow and utility investment is normalized, the report adds.

In particular, utility resource planning in the U.S. is set to take a front seat for deployments over the coming decade, it says, in line with major recent shifts in utility approaches to renewables and storage, with the majority of utilities dramatically shifting planned resources towards renewables and storage due to cost and state-driven clean-energy goals. 

"We note a 17 percent decrease in deployments in 2020, 2 GWh less than our pre-coronavirus outlook," said the consultancy's principal analyst, Rory McCarthy. "We expect wavering growth in the early 2020s, but growth will likely accelerate in the late 2020s, to enable increased variable renewable penetration and the power market transition."

Just behind the U.S. in energy storage deployment, China is expected to see exponential growth in storage capacity, accounting for just over a fifth of global cumulative capacity at 153 GWh by 2030, according to Wood Mackenzie.

Europe's growth story, on the other hand, is expected to be slower than its global counterparts, with the United Kingdom and Germany continuing to dominate the continent's front-of-the-meter market out to 2025, and the markets in France and Italy also opening up.

Wood Mackenzie senior analyst Le Xu emphasized that "storage holds the key to strong renewables growth."

"The question is whether storage can capture stable long-term revenue streams," she added. "Low-cost and longer duration storage can increasingly out-compete coal, gas and pumped hydro, enabling higher levels of solar and wind penetration. However, most lithium-ion energy storage systems economically max out at four to six hours, leaving a gap in the market."

This story first appeared on:


More on this topic