The battery energy storage systems
are primarily used to reduce peak demand charges; integrate renewable
source, regulate voltage, and frequency; and provide backup power
supply. The battery energy storage system market was valued at USD 1.45
Billion in 2017 and is expected to reach USD 8.54 Billion by 2023, at a
CAGR of 33.9% between 2018 and 2023. The base year considered for the
study is 2017, and the forecast period is between 2018 and 2023. The
major factors driving the growth of the battery energy storage system
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.
The battery energy storage systems market for on-grid
connection is expected to grow at a higher CAGR between 2018 and 2023.
The on-grid battery energy storage systems use the utility grids for
supplying electricity to consumers, which also helps reduce the energy
bills. The load leveling, peak shaving, and power demand management are
the main applications of any on-grid connected battery energy storage
system installed with electrical grids. These factors contribute to the
growth of the market for on-grid battery energy storage systems.
The market for the customer-owned battery energy
storage systems is expected to grow at the highest CAGR between 2018 and
2023. The customer-owned battery energy storage systems help reduce the
electricity cost, as electricity is charged under the time-of-use (TOU)
tariff. Under the TOU tariff, the customer can easily reduce the energy
cost (electricity cost and annual investment cost) through the adoption
of battery energy storage systems.
Batteries held the largest size of the battery energy
storage system market in 2017. Battery is the major part of the battery
energy storage systems. It leads to 60% of the total cost of the
system. The different types of batteries used in the battery energy
storage systems are lithium-ion, advanced lead-acid batteries,
sodium–sulfur, and flow batteries, among others. The choice of these
batteries depends on the characteristics of these batteries and their
intended application. Availability of types of battery is driving the
growth of the market for this market.
The battery energy storage system market for
utilities is expected to grow at the highest CAGR between 2018 and 2023.
The generation and consumption of electricity need to be matched at all
times, as mismatch leads to the voltage and frequency deviations, and
causes power outages and damage to the equipment. To overcome this
problem, the utilities install battery energy storage systems with the
electric grids, which control the voltage and frequency deviations. The
battery energy storage systems used in utilities is a cost-effective
alternative to replace a conventional infrastructure, especially in
helping substations, and transmission and distribution (T&D) line to
meet growing peak demands. These factors are fostering the growth of
the battery energy storage system market.
Battery energy storage system market 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 system market
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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