Global Energy Storage Market Booms, Enhancing Competitiveness of Chinese Companies
On the demand side, the global new energy storage market is highly prosperous, and the cumulative installed capacity will double in 2023. Energy storage is an important technology and basic equipment supporting the new power system, and is of great significance to promoting the green transformation of energy and achieving carbon peak and carbon neutrality. In recent years, policies related to energy transformation have continued to increase, and the installed capacity of renewable energy has grown explosively, driving the demand for peak and frequency regulation of power grids, and the global energy storage installed capacity has entered the fast lane of growth. By the end of 2023, the cumulative installed capacity of power storage projects put into operation worldwide was 289.2GW, a year-on-year growth rate of 21.92%. Among them, the cumulative installed capacity of new energy storage reached 91.39GW, a year-on-year growth of 99.62%, nearly doubling compared with 2022, and the cumulative installed capacity accounted for 31.6%, an increase of 12.3pct from 2022.
China, the United States and Europe are the main driving forces for growth, with a high proportion of pre-meter energy storage. In 2023, the global new energy storage installed capacity will be 45.61GW, a year-on-year increase of 121.54%, and the year-on-year growth rate has exceeded 100% for three consecutive years. From the perspective of regional distribution, China, Europe and the United States lead the development of the global energy storage market. In 2023, the three regions of China, Europe and the United States accounted for 47%, 22% and 19% of the global new energy storage installed capacity, respectively, and a total of 88%, an increase of 2pct from 2022, which is the main market increment.
From the perspective of application areas, the new installed capacity on the power supply side, the grid side and the user side accounted for 28%, 48% and 24% respectively, and the new installed capacity on the source network side accounted for 76%. China and the United States are the main driving forces for the growth of pre-meter applications (grid side + power supply side). In 2023, China’s new pre-meter installed capacity will be 22GW, and the United States’ new pre-meter energy storage installed capacity will be 7.9GW; Europe is the world’s largest household energy storage market. In 2023, the new installed capacity of new energy storage will exceed 10GW, of which household energy storage power installed capacity accounts for as high as 67%.
On the supply side, Chinese companies exhibit strong competitiveness, with several companies leading in market share. Chinese companies have advantages in technology and cost, and several Chinese firms ranked among the top global battery energy storage system integrators in 2023. In the global market, the top five battery energy storage system integrators were Tesla, Sungrow, CRRC, Fluence, and HiNa, with Chinese companies occupying three of the five spots. By region, Tesla, Sungrow, and Fluence maintained leadership in North America, collectively accounting for a 72% market share, an increase of 20 percentage points from 2022. In Europe, Nidec, Tesla, and BYD held significant market shares, together accounting for 62%. In the Asia-Pacific region, CRRC, SmartPropel Energy, and Envision Energy, with their strong presence in the Chinese market, ranked at the top, further solidifying their market position.
In the PCS sector, Chinese companies hold the majority share. According to SPIR (Startpoint Research Institute), the global energy storage PCS shipment volume in 2023 was approximately 84 GW, a 110% year-on-year growth. In terms of competition, the industry is becoming increasingly competitive as leading companies expand production, emerging players enter the market, and established solar inverter companies join the sector. Currently, the PCS competitive landscape is relatively fragmented, with small differences in market share among the top players. According to SPIR, the top ten global energy storage PCS companies in terms of shipments in 2023 were PowerElectronics, Sungrow, SMA, Kehua Data, Shandong Sungrow Electric, Shenghong Co., Soyeon Electric, SmartPropel Energy, XJ Electric, and Inovance Technology, with a combined market share of over 70%. Among the top ten companies, eight are Chinese, accounting for nearly 50% of the total market share, making them a key part of the market.
Domestic Trends: Improved Economics of Standalone Energy Storage, Industrial and Commercial Storage Poised for Growth
Cumulative Installation Capacity of New Energy Storage Sees High Growth, Increasing by About 86% in the First Three Quarters of 2024 Compared to the End of 2023. With the accelerated construction of the new power system, China’s energy storage installation capacity has maintained rapid growth in In recent years, continuously achieving historic breakthroughs. From 2017 to 2023, China’s cumulative installation capacity of new energy storage grew from 0.39 GW to 31.39 GW, with a 6-year compound annual growth rate (CAGR) of 108%, and the industry scale increased nearly one hundredfold. By the end of September 2024, China’s cumulative energy storage installation capacity reached 58.52 GW/128 GWh, a growth of about 86% compared to the end of 2023. By region, the East China region saw rapid growth in new energy storage installations, with over 9 GW of new installations this year, making it an important increment in energy storage capacity. In In terms of provinces, Jiangsu, Zhejiang, and Xinjiang saw rapid growth in installations, with new installations of approximately 5 GW, 3 GW, and 3 GW, respectively, becoming important components for the stable operation of the power system.
Benefiting from the rapid advancement of independent energy storage power stations and industrial and commercial energy storage projects, the proportion of installed capacity on the grid side and user side has increased significantly. From the perspective of application areas, in the first half of 2024, the proportion of newly installed capacity on my country’s power supply, grid, and user side will be 30%, 62%, and 8% respectively. Among them, the proportion of grid-side energy storage installed capacity will increase by 6pct compared with 2023, and the proportion of user-side energy storage installed capacity will increase by 5pct compared with 2023. The proportion of installed capacity has increased significantly, mainly due to the rapid growth of independent energy storage power stations and industrial and commercial energy storage projects.
Clear Growth in Large-Scale Energy Storage in Europe and America, with Emerging Countries Seeing Multiple Developments
United States: Strong Growth in Large-Scale Energy Storage, with Operational Capacity Expected to Accelerate
Energy storage has grown strongly, with installed capacity exceeding 8GW in the first three quarters. In the first three quarters of 2024, the United States’ newly installed capacity reached 8.35GW/24.96GWh, a year-on-year increase of 83.43%/82.11%. Among them, in the third quarter, the United States’ newly installed energy storage capacity reached 3.81GW/9.91GWh, and the installation volume hit a new high for the year. Compared with the third quarter of 2023, the newly installed power scale and energy scale increased by 80% and 58% respectively, with a significant growth rate.
From the perspective of application scenarios, large-scale energy storage in the United States is the main growth. In the first three quarters of 2024, the installed capacity of grid-level energy storage in the United States accounted for 89.17%, and the new scale significantly exceeded the same period last year; the new installed capacity of household energy storage reached a new high, reaching 827MW; industrial and commercial energy storage performed mediocrely, and the new scale decreased compared with the same period last year. Specifically, in the first three quarters of 2024, the installed capacity of grid-level energy storage in the United States reached 7444MW/23,119MWh, with a year-on-year increase of 89.03%; the installed capacity of household energy storage reached 827MW/1620MWh, with a year-on-year increase of 56.93%; the performance of industrial and commercial energy storage was mediocre, with a new installed capacity of 77MW/219MWh, and a year-on-year decrease of 10.47%.
The Federal Reserve will start a rate cut cycle in September 2024, and the commissioning of energy storage projects is expected to accelerate. Since the US interest rate cut, the export data of inverters to the United States has improved significantly. From January to November 2024, the number of inverters exported by China to the United States was 3.4907 million, a year-on-year decrease of 8.30%, and the export value of inverters to the United States was 2.041 billion yuan, a year-on-year increase of 3.51%. Overall, the export data of inverters to the United States in 2024 was average, mainly due to the high interest rates in the United States in the first half of the year, the heavy wait-and-see sentiment of energy storage manufacturers, and the slowdown in procurement. Since the US interest rate cut, as the wait-and-see sentiment of manufacturers has eased, the US inverter market has clearly heated up. In October and November 2024, the number of inverters exported by China to the United States increased by 91.66% and 26.07% year-on-year respectively, and the export value of inverters to the United States increased by 105.56% and 112.16% year-on-year respectively, showing rapid growth.
The sufficient reserve of energy storage projects will provide strong support for the installed capacity in 2025. According to EIA statistics, from January to November 2024, the newly installed capacity of grid-side energy storage projects was 8.27GW, an increase of 67.74% over the same period in 2023, maintaining rapid growth. From the perspective of EIA energy storage installed capacity targets, in December 2024, the planned operational scale of energy storage in the United States reached 4.93GW, of which 1.2GW projects have been completed and are waiting to be connected to the grid, 2.1GW has a construction progress of more than 50%, and another 1.6GW has a construction progress of less than 50%. Overall, the planned operational scale of energy storage in December 2024 is relatively certain. In addition, 8.27GW has been put into operation from January to November. In 2024, the scale of grid-side energy storage connected to the grid is expected to reach 11-13GW, achieving rapid growth. At the same time, the United States has sufficient reserves of energy storage projects. According to EIA statistics, the scale of grid-level energy storage projects planned to be put into operation in the United States in 2025 and 2026 will reach 16.23GW and 14.09GW respectively, which is expected to provide strong support for the scale of energy storage installed capacity in 2025.
Europe: Large-Scale Energy Storage Poised for Growth, While Household Storage Impact Weakens
In 2023, the scale of energy storage installed in Europe will nearly double, with household energy storage being the main growth. In 2023, the scale of energy storage installed in Europe will achieve high growth. In 2023, Europe’s new energy storage installed capacity will be 17.2GWh, a year-on-year increase of 95.45%. In terms of application scenarios, the new installed capacity of household energy storage is 12GWh, a year-on-year increase of 118.18%, accounting for 69.77% of the installed capacity; the new installed capacity of large-scale energy storage is 3.6GWh, a year-on-year increase of 50%, accounting for 20.93% of the installed capacity; the new installed capacity of industrial and commercial energy storage is 1.6GWh, a year-on-year increase of 77.78%, accounting for 9.3% of the installed capacity.
Germany/Italy/UK are the main energy storage markets in Europe, with a combined share of 71%. In terms of regional markets, Germany, Italy, UK, Austria and Czech Republic are the top five energy storage markets in Europe. In 2023, Germany’s new energy storage installed capacity will be 5.9GWh, a year-on-year increase of 156.52%; Italy’s new energy storage installed capacity will be 3.7GWh, a year-on-year increase of 85.00%; the UK’s new energy storage installed capacity will be 2.7GWh, a year-on-year increase of 92.86%. In terms of the distribution of new installed capacity, Germany, Italy and the UK accounted for 34%, 22% and 15% of the new installed capacity respectively, and the three together accounted for 71%.
Large-scale energy storage is expected to increase in volume, taking over the incremental growth of household energy storage. In 2024, the proportion of large-scale energy storage in Europe is expected to increase, taking over the incremental growth of household energy storage. In 2024, Europe’s newly installed capacity is expected to reach 22.4GWh, an increase of 30.23% over 2023. Among them, the newly installed capacity of large-scale energy storage is expected to reach 11GWh, and the proportion of installed capacity is expected to increase from 21% to 49%, an increase of 28pct, surpassing household energy storage to become the main incremental growth of European energy storage.
In terms of regions, Italy and the United Kingdom are expected to surpass Germany and become the top two energy storage markets in Europe. In 2024, the newly installed capacity of energy storage in Italy and the United Kingdom is expected to reach 7.7GWh and 4.5GWh respectively, a year-on-year increase of 108% and 67%, and the proportion of installed capacity will increase to 34% and 20% respectively.
Among them, (1) Italy: In December 2023, the European Union approved Italy’s energy storage plan of up to 17.7 billion euros, which is expected to help Italy build more than 9GW/71GWh of energy storage facilities. According to the plan, Italy will build large-scale energy storage facilities in the south and Sicily by 2030. In 2024, Italy’s new energy storage installed capacity is expected to reach 7.7GWh, a year-on-year increase of 108%, of which large-scale energy storage accounts for 67%;
(2) United Kingdom: As an island country, the United Kingdom has certain limitations in its power supply capacity and grid flexibility compared with other countries on the European continent. Based on the need to ensure power supply and enhance grid stability, the United Kingdom’s large-scale energy storage has developed rapidly and is the most mature large-scale energy storage market in Europe. In 2024, the United Kingdom’s new energy storage installed capacity is expected to reach 4.5GWh, a year-on-year increase of 67%, of which large-scale energy storage accounts for 82%.
In the long term, the European energy storage market has broad space, and pre-meter energy storage is expected to become an important incremental market. By 2030, the cumulative installed capacity of European energy storage is expected to grow to 123.5GW/258.6GWh, and the annual new installed capacity is expected to reach 17.6GW/43.2GWh. In terms of subdivided scenarios, pre-meter energy storage is expected to receive strong support from national policies, and the installed capacity will increase significantly. In 2030, the cumulative installed capacity is expected to reach 71GW/172GWh, becoming the main application scenario of the European energy storage market; the household energy storage market is expected to slow down due to the decline of subsidy policies and the stabilization of European electricity prices, and the cumulative installed capacity is expected to reach 44GW/60GWh in 2030; the industrial and commercial energy storage base is small, and it is expected to maintain steady growth, and the cumulative installed capacity is expected to reach 5GW/8GWh in 2030. In terms of countries and regions, Germany, the United Kingdom, and Italy are expected to become the main countries with energy storage installed capacity, and their installed capacity is expected to reach 38, 18.5, and 18GW respectively in 2030. At present, the cumulative installed capacity of European countries is still far from the forecast value for 2030. The European energy storage market has broad room for growth and is expected to continue to accelerate its development in recent years, driven by sustainable development policies.In the long term, the European energy storage market has broad space, and pre-meter energy storage is expected to become an important incremental market. By 2030, the cumulative installed capacity of European energy storage is expected to grow to 123.5GW/258.6GWh, and the annual new installed capacity is expected to reach 17.6GW/43.2GWh. In terms of subdivided scenarios, pre-meter energy storage is expected to receive strong support from national policies, and the installed capacity will increase significantly. In 2030, the cumulative installed capacity is expected to reach 71GW/172GWh, becoming the main application scenario of the European energy storage market; the household energy storage market is expected to slow down due to the decline of subsidy policies and the stabilization of European electricity prices, and the cumulative installed capacity is expected to reach 44GW/60GWh in 2030; the industrial and commercial energy storage base is small, and it is expected to maintain steady growth, and the cumulative installed capacity is expected to reach 5GW/8GWh in 2030. In terms of countries and regions, Germany, the United Kingdom, and Italy are expected to become the main countries with energy storage installed capacity, and their installed capacity is expected to reach 38, 18.5, and 18GW respectively in 2030. At present, the cumulative installed capacity of European countries is still far from the forecast value for 2030. The European energy storage market has broad room for growth and is expected to continue to accelerate its development in recent years, driven by sustainable development policies.
Export Data Stabilizes, Inventory Impact Weakens。Due to inventory digestion and the reduction of subsidy policies, the inverter market in Europe showed relatively weak performance in 2024. From January to November 2024, China’s exports of inverters to Europe totaled 9.3867 million units, a year-on-year decrease of 27.08%. The export value of inverters to Europe amounted to 21.543 billion yuan, a year-on-year decrease of 42.63%. Since the second half of 2024, as inventory digestion was completed, the export data of inverters to Europe has shown some improvement compared to the same period last year. From June to November 2024, China’s exports of inverters to Europe reached 5.8473 million units, a year-on-year increase of 7.04%. The export value amounted to 12.595 billion yuan, a year-on-year decrease of 16.50%.
As the inventory of household energy storage systems has been digested and its impact weakened, large-scale energy storage projects are gradually being released, providing a boost to the incremental growth in household energy storage. The European energy storage market is expected to stabilize and recover in 2025.
Emerging Markets: Vast Potential for Large-Scale Energy Storage in the Middle East, Power Shortages Driving Growth in Residential Energy Storage
Middle East: The energy consumption structure is dominated by fossil energy, and the proportion of renewable energy is low. In 2023, the primary energy consumption of oil and natural gas in the Middle East will account for 45.18% and 51.41% respectively, and the total proportion of fossil energy will reach 97.53%, which is higher than the global average of 81.47%. At the same time, the proportion of renewable energy consumption in the Middle East is low, accounting for 0.96% in 2023, far lower than the global average of 8.18%. In terms of power generation, natural gas is the main fuel for power generation in the Middle East. In 2023, the proportion of oil and natural gas in the Middle East will account for 21.11% and 70.25% respectively, and the total proportion of fossil energy will reach 92.62%, which is higher than the global average of 60.01%. The proportion of renewable energy power generation is 2.82%, which is lower than the global average of 15.87%.
The Middle East is rich in solar and wind energy resources and has great potential for the development of renewable energy. Saudi Arabia, the United Arab Emirates and other Middle Eastern countries are located in the “Solar Belt” (between 40°N and 40°S), with a tropical desert climate, dry and little rain, an average annual sunshine time of more than 3,000 hours, and an average annual ground sunshine intensity of more than 2,000 kWh/m2. They are rich in solar energy resources and suitable for the development of photovoltaic energy. At the same time, the surface wind speed in areas such as the southern coast of Oman and the coast of the Gulf of Aqaba in northwestern Saudi Arabia can reach 7-8 m/s, with high wind energy density and great development potential.
Middle Eastern countries have released their 2030 targets, and there is a lot of room for improvement in the proportion of renewable energy power generation. In recent years, the global energy transition has accelerated, the proportion of renewable energy has increased rapidly, and the installed capacity of renewable energy such as photovoltaic and wind power has continued to grow. Under this trend, the Middle East is actively seeking energy transformation, changing its economic development model, and trying to get rid of its dependence on the oil industry. Saudi Arabia, the United Arab Emirates, and Oman all plan to increase the proportion of renewable energy power generation to more than 30% by 2030, and Qatar and Kuwait plan to increase the proportion of renewable energy power generation to more than 15% by 2030. As of 2023, among the major countries in the Middle East, the proportion of renewable energy power generation in the UAE is 8.4%, and the proportion of other countries is less than 4%. There is a lot of room for improvement in the proportion of renewable energy power generation in various countries. According to Rystad Energy’s forecast, the renewable energy capacity in the Middle East will increase significantly in the next few years. By 2030, the proportion of renewable energy power generation in the Middle East is expected to increase to 30%, by 2040, the proportion of renewable energy power generation in the Middle East is expected to exceed fossil energy, and by 2050, the proportion of renewable energy power generation is expected to rise to 75%. Solar energy is expected to become the most important energy source in the Middle East and the main increment of renewable energy installed capacity.
South Africa: Power shortage eases, household storage demand declines. In 2022, due to the unplanned shutdown of large-scale coal-fired power units, South Africa’s power supply capacity dropped significantly. The number of power outages in 2022 exceeded 200 days. The load reduction in 2023 (requiring industrial users and residents to reduce electricity consumption) exceeded the total of the past decade, and the country fell into a serious power shortage dilemma. In response to the power shortage, South Africa’s household energy storage demand has grown rapidly, resulting in a rapid increase in the number and amount of inverter exports from my country to South Africa in 2023. According to statistics from the General Administration of Customs of China, in 2023, my country exported 1.7938 million inverters to South Africa and exported 3.573 billion yuan in inverters to South Africa. In 2024, as South Africa’s power shortage eased, inverter export data fell. From January to November 2024, the number of inverters exported by my country to South Africa was 300,700, a year-on-year decrease of 83.02%, and the export value of inverters to South Africa was 1.114 billion yuan, a year-on-year decrease of 68.05%.
Southeast Asian countries: The demand for household storage has increased significantly in recent years. On the one hand, Southeast Asian countries are short of fossil energy resources, have a gap in electricity supply and high electricity prices. In addition, the numerous islands have led to weak grid infrastructure and off-grid mode, which makes residents and enterprises urgently need a stable and reliable power supply; on the other hand, the support of policies in Southeast Asian countries, the reduction of energy storage costs and the rapid development of renewable energy have further promoted the widespread application and demand growth of household storage systems in Southeast Asia. According to statistics from the General Administration of Customs of China, from January to November 2024, my country exported 2.7754 million inverters to Thailand, Vietnam and the Philippines, a year-on-year increase of 39.54%, and the export value of inverters was 1.991 billion yuan, a year-on-year increase of 19.76%.
The contradiction of global electricity supply and demand imbalance continues to intensify, and household energy storage demand is expected to maintain steady growth. On the one hand, the tight global energy supply has led to a surge in fuel prices, exacerbating the problem of power supply shortages in developing countries. Since the outbreak of the Ukrainian crisis, fossil fuel prices have been high in the international market. Some Asian and African countries have not only suffered from large price fluctuations in fossil fuels, but also failed to solve the instability of renewable energy, falling into a vicious cycle of energy structure being difficult to upgrade and the more economic development, the more severe the energy crisis. On the other hand, in recent years, extreme weather has occurred frequently around the world, causing impacts on power systems in various regions. Developing countries have weak power systems and generally backward infrastructure, which are easily affected by extreme weather and frequently fall into the dilemma of “power shortage”. The world’s power-deficient countries are mainly located in relatively backward economic regions such as Asia, Africa and Latin America. The problem of power supply not only affects the quality of life of residents, but also restricts local economic development. At present, the problem of power shortage in developing countries around the world is still severe and it will take some time to improve. The global demand for household energy storage is expected to maintain steady growth.
