Grid-Scale Battery Market Size, Share & Industry Analysis, By Battery Chemistry (Lead-acid, Sodium-based, Redox Flow, Lithium-ion, and Others), By Ownership (Third-party Owned, Utility Owned), By Application (Renewables, Peak Shifting, Ancillary Services, Backup Power, and Others), and Regional Forecasts, 2024-2032

The global grid-scale battery market size was valued at USD 10.07 billion in 2023 and is projected to grow from USD 12.78 billion in 2024 to USD 48.71 billion by 2032, exhibiting a CAGR of 18.20% during the forecast period. North America dominated the global grid-scale battery market with a share of 54.12% in 2023. The Grid-Scale Battery market in the Saudi Arabia is projected to grow significantly, reaching an estimated value of USD 19.14 billion by 2032, driven by the rising need for cost-effective grid scale battery technologies.

Grid-scale battery is a technology that enables grid operators and utilities to reserve energy for later utilization. A Battery Energy Storage System (BESS) is an electrochemical device that charges (or collects) energy from the power plant or a grid. Then, it discharges that energy to provide electricity or other grid services when needed. The rising trend of renewables is driving the grid-scale battery market growth.

The global COVID-19 pandemic was unprecedented and staggering, with grid-scale battery experiencing higher-than-anticipated demand across all regions compared to pre-pandemic levels. The COVID-19 pandemic created challenges in the market in 2020; according to the International Energy Agency, the annual grid-scale battery storage increased in 2020 and 2021. This increase implies that the market witnessed growth despite the challenges of COVID-19.

MARKET TRENDS

Significant Advancements in Battery Technology to Drive Market Growth

As production volumes increase, manufacturing costs per unit continue to decrease, making grid-scale batteries more affordable for widespread adoption. New cathode and anode materials offer higher energy density and lower production costs compared to traditional lithium-ion, further reducing the overall battery system costs. Automation and advanced manufacturing techniques optimize production efficiency, thereby contributing to cost reductions.

New materials, such as nickel-rich layered oxides and lithium iron phosphate offer higher energy density, allowing batteries to store more energy in a smaller volume, thereby reducing deployment footprint and costs. Replacing traditional graphite anodes with silicon offers even higher theoretical energy density, potentially doubling storage capacity and increasing the range for future battery systems. Stacking and packaging advancements enhance energy density without compromising on safety or stability. Advancements in battery technology are expected to continue, further driving down costs, improving performance, and expanding applications, thereby contributing to a transformative shift toward a cleaner and more resilient energy future.

Increasing Trend of Molten Salt Batteries to Create Lucrative Opportunities for the Market

Thermal storage hasn't caught the industry's attention lately, like battery storage, which is witnessing increasing deployments. Lithium-ion batteries are dominantly used in grid-scale battery, but in recent times, molten salt batteries have gained significant traction. This attention gained is attributed to its advantages compared to other types of batteries. Some of the benefits of sodium batteries are sustainability and reduced use of critical materials and frequency, sodium's larger radius, and its lower redox potential result in lower energy density than lithium-ion batteries.

GROWTH FACTORS

Advantages of Grid-Scale Battery to Propel Market Growth

Energy storage offers numerous advantages such as integrating diverse resources and improving reliability and resilience. In addition, grid-scale batteries provide the advantage of arbitrage. Arbitrage comprises charging the battery when energy prices are low and discharging it during the more expensive peak times. For the Battery Energy Storage Systems (BESS) operator, this practice can provide a revenue stream by taking advantage of electricity prices that vary throughout the day. An extension of the energy arbitrage service is the reduction of renewable energy curtailment.

Plant operators and project developers are interested in using as much cost-effective and emission-free renewable energy generation as possible. However, in systems with an increasing share of Variable Renewable Energy (VRE), the limited flexibility of conventional generators and timing discrepancies between renewable energy supply and electricity demand can cause renewable generators to throttle their output. By charging the battery with low-cost energy during excess renewable generation and discharging it during times of high demand turns out to be profitable for plant operators.

BESS can reduce the renewable energy constraint and maximize the value developers can sell to the market. Another extension of arbitrage in energy systems without electricity markets is load leveling. With load balancing, system operators charge batteries during periods of surplus generation and release energy during excess demand to more efficiently coordinate the use of generation resources.

Increased Integration of Renewable Energy with Battery Storage to Boost the Adoption of Batteries

Grid-scale battery storage can also contribute to clean energy. Battery storage is one of several technology options that can improve power system flexibility and enable a high level of renewable energy integration. Studies and real-world experience have shown that interconnected energy systems can safely and reliably integrate large amounts of renewable energy from Variable Renewable Energy (VRE) sources without new energy storage resources.

The batteries are beginning to reach a size that allows renewables to replace mid-size natural gas generators. At around 200 megawatts, batteries even reach a size that makes it possible to replace small to medium-sized natural gas generators with renewable energies. According to Wesley Cole, an energy analyst at the National Renewable Energy Laboratory, adding storage also makes renewable energy more viable. In addition, the more one puts on the grid in renewable energies, the more the value goes down. Storage helps by capturing excess energy that would have been lost in the middle of the day when power demand is lower and shifting it to a time when it is more valuable.

The electricity produced from renewable sources is supplied directly into the grid for the access of consumers, but demand from the network fluctuates. Today, battery storage systems provide a cheap and genuine solution for medium-sized renewable energy producers to capture the electricity produced. Connected to the National Grid, this allows involvement in demand-response programs and uses that deposited energy to produce the maximum rate of return.

RESTRAINING FACTORS

High Installation and Maintenance Costs to Hinder Market Expansion

Lithium-ion batteries ignite due to anomalies in their energy components - electrolytes composed of organic solvents, oxygen-rich cathode, and combustible gases. In addition, lithium-ion batteries are exceptionally sensitive to high temperatures and are essentially flammable. These battery packs damage much faster than they usually would due to heat. When a lithium-ion battery pack miscarries, it bursts into flames and can cause extensive harm.

In spite of its over-all benefits, lithium-ion has its drawbacks. It is fragile and needs protection circuitry to uphold safe operation. Safety circuitry built into each pack limits the topmost voltage of each cell throughout charging and inhibits the cell voltage from dropping too low during discharge.

Aging is an issue with most lithium-ion batteries, and many manufacturers remain silent. After a year, some degradation in capacity is noticeable regardless of whether the battery is used. The battery often fails after two or three years. It should be noted that other chemicals also have age-related degenerative effects. This is especially true for nickel-metal hydride when exposed to high ambient temperatures.

Furthermore, all-vanadium RFB is the most researched and developed RFB chemistry. However, the market acceptance of this system has been hindered by expensive chemicals. However, water-soluble organic redox species offer a potential option for low-cost materials. The synthetic processes required to tailor the molecular structure for high solubility and optimal potential, in turn, increase the material cost and limit the availability of porous membranes to reduce cross-over, further increasing capital and maintenance costs.

MARKET SEGMENTATION

By Battery Chemistry Analysis

Lithium-Ion Segment to Dominate the Market Due to Established Supply Chain

Based on battery chemistry, the market is segmented into lithium-ion, lead-acid, redox-flow, sodium-based, and others. The lithium-ion segment held the largest share in 2021 in the market. These batteries are used in various applications due to technological innovations and improved manufacturing capabilities. Lithium-ion technology accounted for more than 90% of the installed power and energy capacity of large battery storage systems operating in North America (losing much energy between charge and discharge) and fast response times.

By Ownership Analysis

Utility Owned Segment to Lead Owing to Increased Investment

Based on ownership, the market is categorized into third-party owned and utility owned. The utility owned segment holds the grid-scale battery market share in 2021 owing to increase in investment from government and non-government utilities. The segment is driven by the positive political framework of regional organizations such as the U.S. Energy Storage Association (ESA) supported. Utilities have better insight into the demands of the grid and can better locate and provision storage to meet their demands but pass all costs on to customers.

By Application Analysis

Renewables Segment to Dominate Backed by Rising Trend of Renewable Integration with Grid-Scale Battery

By application, the market is categorized into renewables, peak shifting, ancillary services, backup power, and others. The renewables segment will dominate the market during the forecast period. A combined decrease in the cost of utility-scale batteries and electricity from renewable energy sources is likely to expand the role of battery-based energy storage systems in the transition to a decarbonized world. 

REGIONAL INSIGHTS

The North American region dominated the market. The availability of favorable government policies, tax breaks for renewable energy deployment, and increasing investments from public and private companies are some of the key features driving the expansion of the regional market size.

Asia Pacific is expected to witness the highest CAGR during the forecast period. China accounted for the largest share of sales in the region due to ongoing government initiatives and investments to boost the market growth.

Europe is also trying to boost local battery manufacturing. The Just Transition Fund supports the development of energy storage facilities in fossil fuel-dependent regions. In addition, the Recovery and Resilience Facility dedicates 37% of its funds to sustainable climate spending for COVID-19 recovery. The development of energy storage should benefit from this.

Rest of the world is also expected to grow at an exceptional rate. Among various forms of energy storage, electrochemical batteries are the main candidates for use in the Latin American energy sector. On the other hand, battery deployment is facing financial challenges such as the high cost of importing them. This factor is hindering the market expansion of grid-scale battery in the rest of the world.

List of Key Grid-Scale Battery Companies

General Electric to Dominate Backed by its Wide Product Offerings and a Reputed Brand Name

General Electric addresses key aspects of its business that gives it a competitive advantage in the marketplace. Some important factors are its financial position, experienced employees, uniqueness of products, and others. In addition, extensive research & development abilities and a solid workforce are the strengths of General Electric. For instance,

• In March 2018, GE announced an innovative energy storage platform called Reservoir. The Reservoir integrates with the overall power grid to enable customers to increase renewable energy integration, improve financial performance, improve grid operations, reduce energy costs, and allow more decentralized, local generation.

LIST OF KEY COMPANIES PROFILED:

• Samsung SDI CO., LTD. (South Korea)


• NGK Insulators, LTD. (Japan)


• BYD Company Ltd (China)


• General Electric (U.S.)


• Redflow Limited (Australia)


• Ambri Incorporated (U.S.)


• VRB Energy (Canada)


• 24M Technologies, Inc. (U.S.)


• Lockheed Martin Corporation (U.S.)


• FZSONICK SA (Switzerland)


• KORE Power, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• September 2022: NGK Insulators connected an extensive sodium-sulfur (NAS) battery energy storage system at a former LNG terminal in Japan. Toho Gas, a combined utility company serving 54 cities in three prefectures in central Japan, has ordered the 11.4 MW/69.6 MWh NAS system for use at the Tsu LNG Station in Mie Prefecture. The completion is scheduled for FY2025.


• September 2022: Redflow collaborated with the University of Queensland within the Australian Research Council (ARC) Research Hub for Safe and Reliable Energy Storage, managed by Deakin University. The research project titled "Extending Flow Battery Operation" was identified to develop a deeper understanding of the electrolyte chemistry and electrode materials to expand further the Zinc Bromine Module (ZBM) operational characteristics.


• May 2021: 24M raised USD 56.8 million in Series E funding to commercialize its capital-efficient, simple, and low-cost semisolid manufacturing process and expand its technology development programs for grid storage and electric vehicle applications. Global trading company ITOCHU Corporation led the financing. As part of the financing and as part of the funding, Hiroaki Murase, general manager of ITOCHU's sustainable energy business division, will join the board of 24M.


• March 2021: NGK will supply a 600 kW/3,600 kWh NAS battery energy storage system for the Uliastai project in the western Zavkhan province of Mongolia. It is part of a broader initiative to increase the use of renewable energy in Mongolia, which is heavily dependent on coal. About 93% of all electricity needs come from the central power system, which supplies large load centers, including the capital Ulaanbaatar from a fleet of aging cogeneration plants. The project’s completion is scheduled for 2022.


• September 2019: GE Renewable Energy announced that it had been selected by Convergent Energy + Power to supply battery storage systems for three projects in California totaling 100 MWh. GE Renewable Energy's scope of services includes a long-term service contract and extended warranties. The energy storage systems support two primary goals. First, they provide targeted local capacity to improve grid reliability at peak times. Second, as fast-acting stabilizing devices, the battery energy storage systems can rapidly charge and discharge to regulate frequency and contribute to grid stability, helping to balance and facilitate the ever-growing spread of variable renewable energy. Such assets will help meet California's state goals of 33% renewable energy by 2020 and 100% by 2050.

REPORT COVERAGE

The research report highlights leading regions worldwide to offer a better understanding of the competitive landscape. Furthermore, the report provides insights into the latest industry trends and analyzes technologies that are being deployed at a rapid pace at a global level. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the industry.

Report Scope & Segmentation