According to new forecasts, cumulative installed energy storage capacity globally will exceed gigawatt-hours by 2030, excluding pumped hydro, and lithium-ion batteries will provide most of this capacity.

This month, research organization BloombergNEF and quality assurance provider DNV released their respective analyses. Each analysis predicts a surge in storage deployment as renewable energy investments and government policies push energy storage to add flexibility to the global grid.

In BloombergNEF's "Energy Storage Market Outlook, Second Half 2023" report, the company predicts that global cumulative capacity will reach 1,877 gigawatt hours by the end of 2030, with 650 gigawatts of installed capacity. DNV’s annual Energy Transition Outlook predicts that lithium-ion battery energy storage alone will reach 1.6 gigawatt-hours by 2030. In other words, both are expected to break the gigawatt-hour mark before the end of this decade.

For BloombergNEF, this is the result of consecutive upward revisions to its forecast numbers. In its report for the first half of this year (released in March), the company forecast that cumulative installed capacity would reach 508 gigawatts/1,432 gigawatt hours by the end of 2030. A year ago, the figure was 411 gigawatts/1,194 gigawatt hours, compared with cumulative installed capacity of 27 gigawatts/56 gigawatt hours at the end of 2021.

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DNV said installed lithium-ion battery capacity will reach 22 gigawatt-hours by 2050, most of which will consist of lithium-ion batteries used in conjunction with large-scale solar PV, with a smaller portion being stand-alone lithium-ion battery energy storage. and long-duration energy storage (LDES) technology, which will reach approximately 1.4 gigawatt hours by then.

However, DNV predicts that pumped hydro energy storage (PHES), the traditional LDES technology, will not see much new installed capacity, remaining at around 3 gigawatt hours today.

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DNV says lithium-ion batteries are on the "edge of innovation" and despite some recent cost pressures due to supply chain challenges, the company predicts that by 2030 the cost of large-scale lithium-ion battery energy storage system (BESS) technology will to below $200 per kilowatt-hour and to about $130 around 2050.

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DNV said it also believed LDES technology, particularly vanadium oxide flow batteries (VRFBs), "looks promising" in eight to 24-hour applications and could have cost advantages. However, as regular readers of will know, there are currently few revenue models for valuing longer-term applications in global energy markets, while other newer technologies may need to rely on policy support and cost reduction. Work hard to succeed.

However, DNV does note that as energy storage capacity exceeds 0.5% of total connected electrical energy resources, energy storage demand shifts from high-power applications such as frequency regulation and other ancillary services to high-energy applications requiring longer storage periods.

In terms of the long-duration energy storage market in 2023, BloombergNEF analyst Helen Kou said that despite the large number of new projects announced in the United States and China, the case for them is "not yet clear." The company's new report finds that cumulative LDES installed capacity will reach 1.4 GW/8.2 GWh by the end of 2023.

BloombergNEF's new report examines the short-term market outlook in more detail, while DNV focuses primarily on expected trends through mid-century.

According to BloombergNEF, total energy storage deployment this year will be 34% higher than 2022 figures, with 42 gigawatts / 99 gigawatt hours expected to be deployed throughout 2023. This will then be followed by a compound annual growth rate (CAGR) of approximately 27%, an increase from the 23% CAGR forecast in March.

This means that by the end of the century, annual installed capacity of 110 GW/372 GWh may be achieved. Like DNV, BloombergNEF observes that storage time is increasing as capacity and other energy-driven storage applications become a major focus.

Energy storage is being seen as capacity - including through capacity markets - in demand in countries as diverse as Japan, Poland, Chile, the UK, Australia and US regional markets where average storage times today typically range from 2 to Between 4 hours, whereas just a few years ago it might have been an hour or less.

Regarding regions, BloombergNEF believes that the Asia-Pacific region will account for 47% of all new installed capacity in 2030. The Europe, Middle East and Africa (EMEA) region will account for 24% by then, while the Americas will be the smallest of the three major regions, accounting for 18%.

This large share of the Asia-Pacific region, perhaps unsurprisingly, is largely due to China's policy reforms and energy storage targets, which prompted BloombergNEF to increase the country's 2030 deployment forecast by 86%.