Energy Storage Systems Market Significantly Driven by Rising Popularity and Adoption of Electric Vehicles
The global energy storage systems market is primarily driven by the surging consumption of energy and burgeoning demand for the efficient and uninterrupted power supply. The global energy storage systems market is driven by rising popularity and adoption of electric vehicles across the globe.
The rapid industrialization and increasing economic activities across the globe is driving the demand for the energy storage systems to ensure the efficient power supply. The technological advancements in the energy storage systems and rising investments in the development of the energy storage infrastructure across the globe is expected to boost the growth of the global energy storage systems market.
The significantly rising demand for the efficient grid management, regular load management, and efficient and uninterrupted power supply across the industries is fueling the demand for the energy storage systems. The growing concerns regarding the environment protection, reduction of carbon footprint, and development of sustainable energy sources are some of the prominent factors that will have a significant impact on the market growth. Moreover, the increasing government initiatives to promote the adoption of the renewable energy sources are a major factor that is expected to drive the market growth.
The global energy storage systems market size is projected to reach US$ 435.32 billion by 2030 and it is growing at a CAGR of 8.4% from 2022 to 2030, according to Precedence Research.
Why Asia Pacific region is growing faster?
Asia Pacific dominated the global energy storage systems market in 2020. Asia Pacific is witnessing strong economic growth owing to the rapid industrialization and rapid urbanization in the region. Moreover, the government policies is attracting huge FDIs in the region. The easy and cheap availability of the factors of production in the major countries like India and China has made Asia Pacific a manufacturing hub. The strong growth of the industries is fueling the demand for the energy storage systems owing to the rising energy consumption. Moreover, the rising demand for the efficient and uninterrupted power supply is expected to drive the growth of the region. China is the highest manufacturer and the leading consumer of the energy storage systems. Furthermore, the growing investments in the infrastructure of the electric vehicles is expected to have a significant impact on the market growth in the forthcoming years.
Drivers, Restraints, and Opportunities
Increase in demand for transport applications and the growth of renewable energy industry drive the growth of the global energy storage systems market. However, high costs associated with battery energy storage systems restrain the market growth. On the other hand, rise in investments in power infrastructure network and the growth of the electric vehicle sector create new opportunities in the coming years.
- The ban on import & export activities and challenges in manufacturing & processing activities of energy storage systems during the lockdown impacted the market negatively.
- There has been a decline in demand for energy storage systems due to halt in manufacturing activities, construction activities of utility infrastructures & renewable energy structures, and production of vehicles worldwide amidst the global lockdown.
- However, the demand for energy storage systems market is expected to recover post-pandemic, as end user industries have already set about their operations.
The utilities segment to maintain its lead position during the forecast period
Based on end user, the utilities segment contributed to the highest market share in 2020, accounting for nearly 90% of the global energy storage systems market, and is projected to maintain its lead position during the forecast period. This is attributed to increase in the demand for electricity and related products and the growth of electric vehicle sector. However, the non-residential segment is projected to manifest the fastest CAGR of 8.5% from 2021 to 2030. This is attributed to rapid expansion of heavy industries such as paper mills, sugar mills, chemical plants, automobile plants, and others along with increase in demand for sustainable power for various applications in commercial & industrial sectors.
The pumped hydro storage segment to continue its lead position throughout the forecast period
Based on technology, the pumped hydro storage segment accounted for the highest market share in 2020, contributed to more than 95% of the global energy storage systems market, and is projected to continue its lead position in terms of revenue throughout the forecast period. This is due to rise in demand for power generation based on pumped hydro storage and supportive government initiatives toward renewable energy generation. However, the battery energy storage segment is projected to witness the largest CAGR of 20.1% from 2021 to 2030, owing to increase in demand for batteries from different energy storage applications such as grid energy storage and automotive applications along with the growth of the renewable energy sector.
Based on the technology, the pumped hydro segment dominated the market in 2020. This is attributed to the huge demand for the hydro pumped technology across the globe. Furthermore, the rising investments towards the research and development and upgrading the infrastructure and on-grid capacity are the major factors behind the growth of this segment.
Based on the application, the transportation is estimated to be the most opportunistic segment. This is attributed to the increased demand for the electric vehicles in the developed nations and surging government initiatives to promote the adoption of the EVs in the developing regions.
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