Electric aircraft such as this self-driving passenger drone are set to be one of the sectors driving … [+]
Energy storage is set to take an increasingly central role in the global economy, growing almost tenfold over the next decade and a half, new research suggests.
The total energy storage market is expected to grow to $546 billion in annual revenue by 2035, up from just $59 billion in 2019, according to a report released by Lux Research.
Electric vehicles will be the main long-term driver of annual revenue and demand in the sector, with a 2035 total market share of 74% by annual revenue and 91% by demand as regulations on petrol and diesel vehicles tighten and auto makers start to ramp up demand in response.
Meanwhile, the stationary storage market will surpass the electronic devices market as early as 2023, when it is projected to become a $30 billion industry of 52 GWh in installations. The sector is driven by the need to support the rapidly growing amounts of renewable energy being deployed around the world, to meet grid storage mandates and it is also tapping into new revenue streams through application stacking. However, Lux warns, it can still be challenging to make money in this market due to uncertainties in regulation and regional differences.
The report, “Global Energy Storage Market 2019,” says that the three main drivers of energy storage – mobility applications, electronic devices, and stationary storage – will reach an annual combined deployment level of 3,046 GWh over the next 15 years, up from the current 164 GWh, with mobility applications making up the lion’s share of the growth and stationary storage growing rapidly, while the market for electronic devices sees little growth.
“The energy storage industry is poised for a massive increase in annual revenue and deployment capacity as key innovative technologies, such as solid-state batteries and flow batteries, reach commercialization,” said analyst Chloe Holzinger, one of the report’s lead authors. “We continue to expect electric mobility applications, primarily light-duty passenger vehicles, to be the principal long-term driver of energy storage annual revenue and demand, with a total market share of 74% by annual revenue and 91% by annual deployed GWh by the year 2035.”
In the near term, electric cars will dominate the market, with the market set to grow by $24 billion by the end of 2022, a 49% increase. Starting from a lower base, medium and heavy duty vehicles will grow much faster, increasing from $600 million in 2019 to $3.6 billion in 2022, a combined annual growth rate of 80%, while the $8 billion growth in the residential storage market comes at a CAGR of 76%.
Personal mobility devices such as electric bikes and scooters are set to from a $2 billion market to $43.7 billion, while Lux predicts that the stationary storage market will grow more than tenfold, from $9.1 billion in 2019 to $111.8 billion, driven by the commercialization of several key innovative technologies, including solid-state batteries and flow batteries.
However, batteries for electronic devices will remain broadly flat over the next 15 years with a CAGR of only 1.9%, as the markets for laptops, cell phones, and tablets are already saturated, leaving growth pegged primarily to population increase.
The report identifies five major technologies that are well-positioned to drive growth in energy storage markets: battery recycling, electric aviation, flow batteries, thin-film batteries, and solid-state battery improvements.
Over the next 15 years, the commercialization of key technologies will grow the global energy storage market, Lux asserts, saying that these technologies are well-positioned to impact markets both inside and outside the energy industry:
• Battery recycling will alleviate the strain on securing key feedstocks like lithium and cobalt.
• Electric aviation will reduce the carbon cost of flying, and regional operators are already transitioning to electric powertrains.
• Flow batteries will play a critical role in a future grid with a high wind and solar penetrations by providing carbon-free bulk capacity.
• Solid-state batteries offer both improved energy density and safety, making them the most likely candidate to displace today’s Li-ion batteries.
• Thin-film batteries could enable innovations in wearables, medical applications, and IoT devices.
