The world’s energy storage capacity is set to grow at a compound annual growth rate (CAGR) of 31% according to new research, Kallanish Energy reports.
New analysis from Wood Mackenzie, published on Wednesday, found cumulative capacity will top 741 gigawatt-hours (GWh) over the next decade. Front-of-the-meter (FTM) installations, such as large power generation facilities connected to electricity grids, will account for up to 70% of annual total capacity additions by 2030.
The U.S. will account for over 49%, or 365 GW, of global cumulative capacity by 2030, while China is expected to see its cumulative storage capacity grow exponentially. The Asian giant will account for 21% or 153 GW of global cumulative capacity by the end of the decade, the report forecasts.
In Europe, the UK and Germany are expected to lead FTM energy storage growth until 2025, although at a much slower rate than in the U.S. or Asia. France, Italy and Spain are all set to follow suit as new capacity and ancillary service markets are opened, often through the aid of the European Commission.
Wood Mackenzie recorded a 17% decrease in deployments so far this year, representing a 2 gigawatt (GW) decline on its estimates before the Covid-19 pandemic. The report forecasts “wavering growth” throughout the early 2020’s, with growth likely to accelerate in the latter half of the decade, enabling increase variable renewable penetration and the power market transition.
“Investment decisions are likely to be pushed back in some cases, but the general trajectory of the power market transition and the need for energy storage to enable this has not changed,” said Wood Mackenzie principal analyst, Rory McCarthy.
“If anything, the transition may be accelerated as governments around the world grapple with how to recover their economies more sustainably than in the past with upside for the energy storage industry,” added McCarthy.
In September, a similar report published by Florida-based Lux Research found that the global energy storage market is projected to grow to $546 billion by the year 2035. (See related article)
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