Research firm Wood Mackenzie has approved in a recently released global energy storage outlook report that the United States is currently the leader in the global energy storage market, and it is expected that the cumulative deployment of energy storage systems will reach 600GWh by 2031. By 2031, the United States is expected to become the energy storage market with an average annual deployment of 27GW of energy storage systems.
Growth in U.S. energy storage deployment slowed from the second quarter of this year as the U.S. Commerce Department launched an investigation into complaints of dumping of PV modules in Southeast Asia. Wood Mackenzie expects U.S. storage demand to fall by about a third this year and next, as so many energy storage projects are co-located with large-scale solar.
Analysts at Wood Mackenzie said the U.S. and China would account for 75 percent of global energy storage demand. It is estimated that China will be second only to the United States in terms of energy storage deployment in the future, and it is expected that 422GWh of energy storage systems will be deployed by 2031.
In its latest Energy Storage Outlook report released July 28, Wood Mackenzie concluded that the installed capacity of energy storage systems in the United States and China is expected to continue to climb over the next decade, as the market for grid-scale renewable energy in the United States continues to rise. Development has stabilized, with relatively slow growth in energy storage deployment in Europe. Wood Mackenzie downgraded its forecast for the cumulative installed storage capacity in Europe to 159GWh by 2031.
This energy storage outlook report concludes that this has led to a slowdown in global energy storage deployment, with total deployment expected to reach 500GW/1396GWh by 2031.
Dan Shreve, head of global energy storage at Wood Mackenzie, said, “The European energy storage market has stalled due to regulatory hurdles failing to improve the economic viability of energy storage projects, limited access to electricity markets and a lack of capacity market auctions. And storage deployments in the U.S. and China will continue to increase.”
In an email, Shreve noted that, similar to the U.S. national policy, China has implemented a national policy to accelerate the deployment of energy storage, with the goal of increasing the installed capacity of the deployed energy storage system to more than 30GW by 2025.
However, the U.S. energy storage industry has taken a hit after a California solar developer filed an application by the U.S. Department of Commerce to impose anti-dumping and countervailing duties on PV modules imported from Southeast Asia because they included PV modules produced in China. Wood Mackenzie expects demand for energy storage deployments to fall 34% this year and 27% by 2023.
Storage deployment has been affected by a slowdown in the deployment of large-scale solar power generation facilities, many of which are deployed in conjunction with battery storage systems. About 35% of hybrid grid-scale solar-plus-storage installations in 2022 have been delayed, Shreve said.
According to Shreve, market additions in the U.S. are expected to be 11GW/39GWh in the second quarter.
By 2026, California and Texas will account for about half of the U.S. energy storage market. Shreve added, “Nevada, Arizona and New York are among the top five states in the U.S. for energy storage deployments by 2026 and are expected to account for about 15% of the market by 2026.”
Despite the sluggish European energy storage market, Germany is the third largest energy storage market in the world. Wood Mackenzie predicts that by 2030, the total energy storage capacity in the European energy storage market will grow to 32GWh, of which 61% will come from the residential sector.
A key growth engine is Germany's implementation of the Easter package, which aims to reach 80 percent of the electricity supply from renewables by 2030. Shreve explained that deploying battery storage in conjunction with solar power generation can mitigate excessive curtailment of solar power generation.