Energy Storage a $1.2 Trillion Investment Opportunity to 2040

Bloomberg New Energy Finance's Long Term Energy Storage Outlook says the battery market will grow significantly

Bloomberg New Energy Finance's Long Term Energy Storage Outlook says the battery market will grow significantly

The tumbling cost of batteries is set to drive a boom in the installation of energy storage systems around the world in the years from now to 2040, according to the latest annual forecast from research company BloombergNEF (BNEF).

That's the view offered by research company Bloomberg New Energy Finance (BNEF) in a new report, which predicts the global energy storage market will grow to a total capacity of 942GW over the next 22 years.

The report suggests behind-the-meter installations will increasingly be sited at business and industrial premises and at millions of residential properties to help balance grid demand, cut costs, store excess output and improve reliability. The outlook reveals that most capacity additions installed before 2030 are likely to be industry-scale, with meter applications set to overtake large-scale projects at some point between 2030 and 2040.

"This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology - electric vehicle (EV) charging and energy access in remote regions".

China, the US, India, Japan, Germany, France, Australia, South Korea and the United Kingdom will dominate with two-thirds of the market by 2040.

Those interested in the use of aggregated behind-the-meter energy storage in the place of utility-scale applications will have to wait for years before regulatory frameworks in some countries fully allow it, said BNEF.

In geographical terms, there will be nine markets that will lead the global battery market, having two-thirds of the overall installed capacity by 2040. In the near-term, South Korea will dominate the market, the US will take over in the early 2020s, but will be overtaken by China in the 2020s. China will then lead throughout to 2040.

"Storage becomes a practical alternative to new-build generation or network reinforcement, especially for underutilised assets in some markets".

Meanwhile, demand for batteries for stationary energy storage will be dwarfed by demand from the electrical vehicle market, BloombergNEF says, which will more materially impact supply-demand balance and prices for metals including lithium and cobalt.

Developing countries, particularly in Africa, are also forecast to see rapid growth in battery storage - again, boosted by an increase in the amount of off-grid and edge-of-grid applications.

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