Advanced Energy Storage Systems Market

Rising investments in renewable energy sources is driving the market growth

For instance, the International Energy Agency (IA), an independent intergovernmental agency, predicted that global investments in the electricity sector would increase by 5% from 2020 to 2021, reaching more than $820 billion. In 2021, $530 billion was invested in new power generation capacity, with 70% of that money going to renewables. Grids and storage were purchased with the balance. Due to significant technological development and cost reductions, a dollar invested in deploying wind and solar photovoltaic (PV) systems generates four times as much power as a dollar invested in the same technologies ten years ago.

Therefore, the market for sophisticated energy storage systems would expand due to the rising investments in renewable energy.

The global market for advanced energy storage is driven primarily by the rapid growth in the battery energy storage industry, the enormous increase in global microgrid and on-grid energy distribution infrastructure, and the absence of significant regulatory barriers to energy storage. The electrochemical (battery) energy storage market has expanded, benefiting the growth prospects of the global advanced battery storage market due to the excellent growth seen in the battery industry over the past few years that has significantly lowered battery prices.

The market for advanced energy storage is expected to increase significantly because of the tremendous expansion in the microgrid and on-grid energy distribution sectors that have been seen, particularly in some of the world's top developed and rising economies. Especially in nations around Europe and Asia Pacific where governments assist the industry through loan rebates and subsidies, the market is anticipated to benefit in the near future from the relaxation of tax structure and supportive government laws on energy storage.

The market for advanced energy storage systems has seen a significant improvement in technology. The market's major companies are concentrating on putting technological innovations—like software integration in sophisticated energy storage systems—into practice. These cutting-edge energy storage technologies enable efficient use of energy by enabling sophisticated features like better controls, monitoring, and forecasting capabilities. These systems can give providers of them a market advantage. For instance, Honeywell, a US-based multinational advanced technology firm, debuted its battery energy storage system (BESS) platform technology in June 2021. This technology has integrated controls, monitoring, and forecasting capabilities.

Thus, driving the advanced energy storage systems market revenue.

The rise in electric vehicle (EV) adoption is significantly influencing the Global Advanced Energy Storage Systems Market Industry. As the number of EVs on the road increases, so does the demand for efficient energy storage solutions to support charging infrastructure. This trend is particularly evident in urban areas where charging stations are becoming more prevalent. The integration of energy storage systems with EV charging stations not only enhances grid stability but also promotes the use of renewable energy. This synergy is likely to bolster market growth as the automotive industry transitions towards electrification.

The necessity for grid stability and reliability is a critical driver for the Global Advanced Energy Storage Systems Market Industry. As energy consumption patterns evolve, utilities are increasingly turning to energy storage systems to mitigate fluctuations in supply and demand. These systems provide essential services such as frequency regulation and peak shaving, which are vital for maintaining grid integrity. The growing complexity of energy systems, coupled with the rise of distributed energy resources, underscores the importance of advanced energy storage solutions in ensuring a reliable and resilient power supply.

Government initiatives and supportive policies are pivotal in shaping the Global Advanced Energy Storage Systems Market Industry. Many countries are implementing financial incentives, tax credits, and grants to encourage the adoption of energy storage technologies. For example, the United States has introduced various programs to promote energy storage deployment, which is expected to significantly contribute to the market's expansion. By 2035, the market could reach 200.1 USD Billion, driven by these favorable regulatory frameworks that facilitate investment in advanced energy storage solutions.

The Global Advanced Energy Storage Systems Market Industry is experiencing a surge in demand driven by the increasing integration of renewable energy sources. As countries strive to meet their renewable energy targets, energy storage systems play a crucial role in balancing supply and demand. For instance, in 2024, the market is projected to reach 86.4 USD Billion, reflecting the urgency to store excess energy generated from solar and wind sources. This trend is likely to continue as governments worldwide implement policies to support renewable energy adoption, thereby enhancing the market's growth potential.

Technological innovations are propelling the Global Advanced Energy Storage Systems Market Industry forward. Advances in battery technologies, such as lithium-ion and solid-state batteries, are enhancing energy density and reducing costs. These improvements not only make energy storage systems more efficient but also more accessible to a broader range of consumers. As a result, the market is expected to witness a compound annual growth rate (CAGR) of 7.93% from 2025 to 2035. This growth is indicative of the industry's potential to revolutionize energy management and consumption patterns globally.

By region, the study provides the market insights into North America, Europe, Asia-Pacific and Rest of the World. The North American advanced energy storage systems market area will dominate this market. The government subsidies for renewable energy and attempts to cut carbon emissions in the area are primarily responsible for this increase in demand for ADESS. Furthermore, several important firms are actively developing and deploying advanced energy storage systems. This technology is crucial for electrical networks and is rapidly improving.

Further, the major countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Advanced Energy Storage Systems Market Share By Region 2022 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe advanced energy storage systems market accounts for the second-largest market share due to the increased production of power via renewable energy sources. The demand for cutting-edge energy storage devices is growing as more electric vehicles are on the road. Additionally, the market is predicted to grow in response to the rising demand for greater power reliability and efficiency, providing large advanced energy storage system providers with a potential opportunity. Further, the German advanced energy storage systems market held the largest market share, and the UK advanced energy storage systems market was the fastest growing market in the European region.

The Asia-Pacific Advanced energy storage systems Market is expected to grow at the fastest CAGR from 2023 to 2032. In developing nations, in particular, the market is anticipated to be driven high by increased power demand. Government initiatives, market forces, and accessible technology have all worked together to create the conditions for an increase in the share of low-carbon energy sources in the electrical supply from 36% to 52% in 2040. Increases in energy efficiency partially balance rising digitalization and electrification.

Moreover, China’s advanced energy storage systems market held the largest market share, and the Indian advanced energy storage systems market was the fastest growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development in order to expand their product lines, which will help the advanced energy storage systems market, grow even more. Market participants are also undertaking a variety of strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, advanced energy storage systems industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics used by manufacturers in the global advanced energy storage systems industry to benefit clients and increase the market sector. In recent years, the advanced energy storage systems industry has offered some of the most significant advantages to market. Major players in the advanced energy storage systems market attempting to increase market demand by investing in research and development operations include AES Corporation (US), Tesla, Inc. (US), GENERAL ELECTRIC (US), ABB (Switzerland), Saft (France), LG Chem. (South Korea), Siemens AG (Germany), Panasonic Corporation (Japan), Electrovaya (Canada), and Hitachi, Ltd. (Japan).

A worldwide conglomerate, Hitachi Ltd. (Hitachi), is active in construction equipment, electronics, power systems, information technology, and social infrastructure. Construction equipment, automotive systems, smart life and eco-friendly systems, electronic systems and equipment, power systems, information and telecom systems, social infrastructure and industrial systems, and power systems are all produced and sold by the corporation.

Siemens Energy AG (Siemens Energy) is an energy technology supplier. This company develops, produces, sells, and installs various devices, including multi-megawatt gas turbines, steam turbines, turbines powered by gas engines, and others. The company offers various products and services for power generation, transmission, automation, smart grid, mechanical drives, compression and expansion, and renewable energy.