500GW of Energy Storage Will Be Globally Available By 2031: Wood Mackenzie

UK-based data provider Wood Mackenzie has released its Global Energy Storage Outlook today. According to this report, market growth for global energy storage has been uneven, with cumulative storage deployments anticipated to reach 500GW by 2031.

Only 159-gigawatt hours (GWh) are projected for the region by 2031, compared to 422 GWh for China and 600 GWh for the United States, as the region’s grid-scale market struggles to stabilise.

Despite this, the German energy storage business is still expanding and is expected to overtake the US and China as the third-largest energy storage market by 2030. 32 GWh are anticipated for the nation, with the residential sector accounting for 61% of that amount.

The EU energy storage industry will grow as a result of the European Commission’s REPowerEU initiative, which pushes for a greater proportion of renewable supply in the EU Member States. Since the plan’s May 2022 introduction, which outlined a 600GW objective for the solar PV sector and claimed to simplify the approval process for both storage and PV plants, Europe has already experienced a 12 GWh growth.

With average annual installations of 54 GWh through 2031, the US will continue to lead the energy storage market; 83 percent of that volume will be grid-scale. But according to Wood Mackenzie’s US projection, demand will decline by 34% and 27%, respectively, in 2022 and 2023. This is because a tariff complaint involving antidumping and countervailing tariffs (AD/CVD) from Q2 of this year has caused interruptions in the grid-scale and dispersed segments.

The most recent prognosis from Wood Mackenzie also emphasises China’s continuous domination of the Asia Pacific market, with demand for more than 400GWh anticipated until 2031.

Dan Shreve, Global Head of Energy Storage at Wood Mackenzie, stated, “Approximately 35% of 2022 hybrid grid-scale installations were delayed as a result of the AD/CVD pricing petition, which had a significant negative impact on the US solar and storage business. China’s Fourteenth Five-Year New Energy Storage Development Implementation Plan, which reaffirmed the crucial role of energy storage in its decarbonization objectives, has been the key driving force behind this.” The AD/CVD investigation by the US department of commerce has subsequently been dropped with a 2 year window for continued imports kept open for now.

The plan states that system costs will drop by more than 30% as a result of increased technology performance by the year 2025 when energy storage will have reached the large-scale development stage. Twelve Chinese provinces and cities have declared cumulative 2025 energy storage deployment objectives totaling roughly 40GW since the plan’s announcement.