Battery energy storage systems are used to store the energy generated by power plants. The energy storage systems store the energy generated from renewable energy power plants to ensure a smooth flow of electricity despite fluctuations in power generation by renewable energy plants. 
The battery energy storage systems market is expected to expand at a fast-paced CAGR due to the increase in usage of renewable energy plants as well as electric and hybrid cars.
Valuing nearly US$ 20.4 Bn in 2023, ‘Battery Energy Storage Systems Market is anticipated to expand at a CAGR of 12.7% from 2023 to 2031.
A new report titled ‘Battery Energy Storage Systems Market – Global Industry Analysis, Size, Share, Growth, Trends, and Forecast, 2023-2031, by Transparency Market Research (TMR) has revealed these statistics.
The growth is considered to come mainly Increase in number of renewable energy power plants is a major driver of the market, while lack of industry standards is affecting market growth
Various countries are initiating development programs to raise funds for battery energy storage systems. Governments are also entering into public-private partnerships to increase the use of renewable energy. Battery energy storage system is a cost-effective way of providing electricity to the population living off-the-grid. Companies are launching hybrid and electric automobiles to help lower greenhouse emissions. On the other hand, the lack of industry standards is hampering the market. For instance, currently, there does not exist any consensus on the precise method of extinguishing a lithium-ion battery fire. Lack of standards can cause safety and regulation issues in various applications, especially in the automotive sector.
The residential sector is expected to create lucrative opportunities
Implementation of various government policies such as net zero export limitations, net metering 2.0, tax credits for standalone energy storage systems, and devaluation of exported solar PV has boosted the demand for battery energy storage systems in the residential sector. There is a growing shift in Europe as well as the U.S. to install rooftop solar systems in order to lower global warming through the usage of limited energy.
Constant technological upgrade to result in substantial threat to manufacturers
Manufacturers of battery energy storage systems are likely to face challenges from the consistent introduction of new technologies. This is estimated to increase the possibility of internal substitution. For instance, lithium-ion batteries are facing competition from newer types of batteries such as sodium sulfur batteries, sodium ion batteries, and flow batteries.
Lithium-ion batteries are estimated to be a major segment
Lithium-ion batteries are highly preferred, as they have been used for a long time in various industries such as automotive and electronics. The global battery energy storage systems market can be segmented based on technology, application, and region. In terms of technology, the market can be classified into lithium-ion batteries, nickel-cadmium batteries, sodium sulfur batteries, sodium-ion batteries, flow batteries, and other batteries. In terms of application, the market can be divided into on-grid connected systems, off-grid connected systems, automotive, and others.
Asia Pacific dominated battery energy storage systems market in terms of demand in 2017
In terms of region, global battery energy storage systems market can be segregated into North America (the U.S. and Canada), Latin America (Chile and Rest of Latin America), Europe (Germany, the U.K., France, Italy, Spain, Russia & CIS, and Rest of Europe), Asia Pacific (China, India, Japan, Australia, ASEAN, and Rest of Asia Pacific) and Middle East & Africa (Israel and Rest of Middle East & Africa). Asia Pacific dominated the market in 2017. It was closely followed by North America. This trend is expected to continue during the forecast period.
Limited number of players
Significant expertise and investment are required to develop the technology required for battery energy storage systems. As a result, the barrier to entry is high in the market. Thus, a small number of players account for a large share of the market. These players include Tesla, Panasonic, and LG Chem. However, several new companies are emerging in the market. The market share of these new companies is expected to increase during the forecast period. These companies include General Electric and Fluence, a joint venture between AES Corporation and Siemens.
Battery Energy Storage Systems Market, by Technology
- Lithium-ion Batteries [Lithium Cobalt Oxide, Lithium Manganese Oxide, Lithium Nickel Manganese Cobalt Oxide (NMC), Lithium Iron Phosphate (LFP), Lithium Nickel Cobalt Aluminum Oxide, and Lithium Titanate]
- Nickel Cadmium Batteries
- Sodium Sulfur Batteries
- Sodium-ion Batteries
- Flow Batteries [Redox Flow Batteries, Iron-chromium Flow Batteries, Vanadium Redox Batteries, Hybrid Flow Batteries (Zinc Hybrid Cathode, Other Hybrid Batteries), Other]
- Other
MR Fluid Market, by Application
- On-grid Connected Systems
- Off-grid Connected Systems
- Automotive
- Others
These insights are based on a report on Battery Energy Storage Systems Market by TMR.
