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- Global Investment Research
- General Research Insights
- Energy transition
Energy storage – The great enabler
Energy storage is the world’s fastest-growing cleantech. We see it as a key enabler for the global energy transition, supporting the further rise of renewables and electrification – and we expect its explosive growth to continue.
Energy storage: the great enabler that lights up the night. We view energy storage as a key energy transition enabler that will drive transformation across power systems, buildings and industry. Battery technology has improved significantly over the past decade at the same time as costs have fallen, with a decline of more than 90% in battery pack prices, drastically improving the economics.
This has helped battery energy and storage systems (BESS) emerge as the world’s fastest-growing cleantech. Over the past five years, it has grown from a rounding error into a major area of capacity growth and investment for utilities and developers. From 2014 to 2024, global installations of battery storage grew by a 66% compound annual growth rate, around twice as fast as solar power installations.
Transport has helped to drive this transformation. The transport sector has been at the forefront of the adoption of battery technology through the growth of electric vehicles (EVs), with heavy investment in research and development. Now, other sectors stand to benefit from battery improvements, particularly the power sector. Projects combining solar and batteries are increasingly cost-competitive with other power generation options.
Could batteries make the sun shine at night? Solar power’s peak output is during the sunniest times of day, whereas peak power demand is often in the early evening. Adding batteries to a solar installation makes it possible to store excess output and release it later in the day, when it is most in demand. As battery technology continues to improve, ‘round-the-clock’ solar power could become a reality.
A decade of disruption ahead. We expect the rapid rise in BESS deployment to continue to cause broad-based disruption of the traditional energy system. Its flexibility could help to unlock the next stage of growth for solar and wind generation; displace thermal generation in providing a range of system services that support grid resilience and meet peak demand; and support the electrification of facilities such as data centres. We expect the growing capabilities of new, larger BESS projects with increased storage duration (from 2 hours to 6 hours, or more) to further enhance this disruption potential.
Battery storage to continue as the fastest growing cleantech. We expect the growth of BESS to continue, driven by further declines in the cost of energy storage, greater renewables penetration, improving policy support, electricity demand growth, and rising investment in improving grid and energy system resilience. Globally, we think cumulative BESS capacity could quadruple between 2025 and 2030. We see China, Europe and the US as the largest growth markets.
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The following analyst(s), who is(are) primarily responsible for this document, certifies(y) that the opinion(s), views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Charles Swabey, Meike Becker, Evan Li, Corey Chan, Will Cho, Ildar Khaziev, CFA, Sean McLoughlin, Puneet Gulati, CFA, Elaine Chen, Michael Tyndall, CFA and Lilyanna Yang, CFA
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