Global energy storage capacity to grow by one-third every year to 2030, report

Following a 17% drop in deployments in 2020, the global energy storage sector is set to boom with capacity growing at a compound annual growth rate (CAGR) of 31% through to 2030.

That is the headline finding of Wood Mackenzie’s latest global energy storage outlook.

Acknowledging the impact which Covid-19 has had on energy technology investment trends and the logistical challenge it has presented to project installations, the analysis forecasts that 2GW less capacity will be installed in 2020 than in 2019. This is equivalent to a 17% year-on-year decrease.

Wood Mackenzie believes that the impact of the pandemic on the energy storage sector will last beyond the calendar year, resulting in “wavering”, slowed growth through to around 2023. But deployment should accelerate sharply from the mid-2020s as investment returns and as national climate and renewable energy targets loom closer. As such, the world should play host to 741GWh of storage by 2030.

Around half of this cumulative capacity will be located in the US, Wood Mackenzie predicts, as the nation’s wind and solar sectors expand. The analysis states that while the Trump administration has withdrawn the US from the Paris Agreement, most US-based utility firms are planning on shifting towards renewables and storage due to higher climate ambitions of the states they operate in. Falling energy storage costs are also a key factor even for firms in states with weak climate policies. Bloomberg NEF claimed in 2019 that battery prices have fallen 87% in real terms since 2010.

China, meanwhile, will be the world’s second-largest host of large-scale energy storage in 2030, accounting for more than one-fifth of the global cumulative capacity. The nation recently introduced a mandate requiring solar and wind developers to cover the costs of ensuring that the grid can cope with more renewable generation. As such, these firms are expected to invest heavily in storage.

Wood Mackenzie sees the UK and Germany being the two largest energy storage markets in Europe in 2030 – the same as they are today. It expects slower capacity growth in France, Italy and Spain, despite the EU’s green deal package. This is largely due to historical trends with policy and infrastructure. Back in March, the European Association for Storage of Energy (Ease) published analysis charting a series of closures to large-scale schemes designed to support the sector across the continent.

Game plan

This summer, the UK Government relaxed planning rules for large-scale storage projects, in anticipation of reduced investment due to Covid-19 and as part of its plans to reach net-zero by 2050.

The changes mean that battery projects over 50MW no longer need to pass through the Nationally Significant Infrastructure Projects (NSIP) regime. This should fast-track large schemes.

For smaller schemes, oversight on local planning frameworks has been altered, in a move BEIS claims could decrease the application process from years to months.

Sarah George