Battery Energy Storage System Market | Restraint: High capital investment required for the deployment

 According to the new market research report "Battery Energy Storage System Market by Element (Battery, Hardware), Battery Type (Lithium-Ion, Advanced Lead Acid, Flow Batteries, Sodium Sulfur), Connection Type (On-Grid And Off-Grid), Ownership, Application, and Geography - Global Forecast to 2023", the battery energy storage system market is expected to grow from USD 1.98  Billion in 2018 to reach USD 8.54 Billion by 2023, at a CAGR of 33.9% between 2018 and 2023. Factors that are driving the growth of the market include the increasing demand for grid-connected solutions, high demand for the lithium-ion technology in the renewable energy industry, and declining prices of lithium-ion batteries.

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Restraint:  High capital investment required for the deployment  

Battery energy storage technologies, including lithium-ion batteries, flow batteries, and lead-acid batteries, require high capital investment due to high-energy density and improved performance delivered by these batteries. Lithium-ion batteries cost more due to their characteristics such as high energy density, low rate of self-discharge, and less maintenance requirement. The high cost of lithium-ion batteries further increases the cost of battery energy storage systems, as lithium-ion batteries are embedded in the form of modules and packs.

The cost of battery energy storage systems depends on the types and number of batteries used, and it also varies as per the intended application (residential, non-residential, and utilities) of the systems. The integration of different batteries (in the form of packs, modules, and racks), inverter, battery management system (BMS), and wiring in the battery energy storage systems result into the increased costs of these systems. During the installation of battery energy storage systems, the required capital cost comprises storage system footprint and space requirements (energy and power density); components related to the battery energy storage systems (batteries, power converters, and BMS); and facility infrastructure (communications and control, environmental control, grid interconnection). Also, the total operating cost of battery energy storage systems is the combination of the factors such as the cost of charging the system, labor associated with the installation of these systems; maintenance in the plant; replacement and repair cost; and decommissioning and disposal cost. Thus, the installation of a battery energy storage system in a plant or any required place requires a high capital investment that acts as a restraint for the growth of the market.

Utilities to hold largest size of the battery energy storage systemmarket during the forecast period

Battery energy storage system is well suited for smoothing the variable output of renewables and controlling the rapid ramping up and down of solar as well as wind generation. The grid operators and regulators are aware of the importance of battery energy storage systems and their ability to cater through multiple services. The utility operators are using these systems in their resource planning processes, which reduces the system costs and increases storage capacity.

Battery energy storage systemmarket in APAC to grow at the highest CAGR between 2018 and 2023

APAC comprises China, Japan, India, South Korea, and the Rest of APAC (RoAPAC). APAC is gradually becoming a hub for the battery energy storage system industry. The demand for battery energy storage systems from China, India, and Japan is gradually increasing. The electricity demand in China is on rise due to the rapid population growth in the country. To fulfill the increasing demand from this population, the state-owned State Grid Corporation of China, the world’s largest utility, has deployed battery energy storage systems to provide ancillary services throughout its grid.

The major players operating in the battery energy storage systemmarket are ABB (Switzerland), LG Chem (South Korea), NEC (Japan), Panasonic (Japan), Samsung SDI (South Korea), AEG Power Solutions (Netherlands), General Electric (US), Hitachi (Japan), Siemens (Germany), and Tesla (US).

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