The battery energy storage system market is expected to grow from USD 1.98 Billion in 2018 to reach USD 8.54 Billion by 2023, at a CAGR of 33.9% between 2018 and 2023. Factors that drive the growth of the market include the increasing demand for grid-connected solutions, high demand for the lithium-ion technology in the renewable energy industry, and declining prices of lithium-ion batteries.
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The lithium-ion batteries are expected to hold the largest share of the battery energy storage system market between 2018 and 2023. The lithium-ion batteries have reliable cycle life as well as high energy and power density in terms of volume, high charge/discharge efficiency, and low maintenance needs. Additionally, these batteries have lighter weight than nickel–cadmium and nickel metal-hydride batteries. These features of lithium-ion batteries are expected to drive the battery energy storage system market.
The battery energy storage systems market for on-grid connection is expected to grow at a higher CAGR between 2018 and 2023. The on-grid battery energy storage systems use the utility grids for supplying electricity to consumers, which also helps reduce the energy bills. The load leveling, peak shaving, and power demand management are the main applications of any on-grid connected battery energy storage system installed with electrical grids. These factors contribute to the growth of the market for on-grid battery energy storage systems.
The market for the customer-owned battery energy storage systems is expected to grow at the highest CAGR between 2018 and 2023. The customer-owned battery energy storage systems help reduce the electricity cost, as electricity is charged under the time-of-use (TOU) tariff. Under the TOU tariff, the customer can easily reduce the energy cost (electricity cost and annual investment cost) through the adoption of battery energy storage systems.
Batteries held the largest size of the battery energy storage system market in 2017. Battery is the major part of the battery energy storage systems. It leads to 60% of the total cost of the system. The different types of batteries used in the battery energy storage systems are lithium-ion, advanced lead-acid batteries, sodium–sulfur, and flow batteries, among others. The choice of these batteries depends on the characteristics of these batteries and their intended application. Availability of types of battery is driving the growth of the market for this market.
The battery energy storage system market for utilities is expected to grow at the highest CAGR between 2018 and 2023. The generation and consumption of electricity need to be matched at all times, as mismatch leads to the voltage and frequency deviations, and causes power outages and damage to the equipment. To overcome this problem, the utilities install battery energy storage systems with the electric grids, which control the voltage and frequency deviations. The battery energy storage systems used in utilities is a cost-effective alternative to replace a conventional infrastructure, especially in helping substations, and transmission and distribution (T&D) line to meet growing peak demands. These factors are fostering the growth of the battery energy storage system market.
Battery energy storage system market in APAC to grow at the highest CAGR between 2018 and 2023
The major players operating in the battery energy storage system market are ABB (Switzerland), LG Chem (South Korea), NEC (Japan), Panasonic (Japan), Samsung SDI (South Korea), AEG Power Solutions (Netherlands), General Electric (US), Hitachi (Japan), Siemens (Germany), and Tesla (US).
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