Li-ion BESS Market: Jumps in Demand and Key Trends
2024 8월7일
Conrad Nichols
Demand for battery energy storage systems (BESS) will continue to increase over the coming decade across key countries as the volume of renewable energy sources (RES) penetrating electricity grids continues to increase. Governments have continued to announce incentives and schemes to promote the growth of BESS, as well as announce and increase targets for both RES and battery and energy storage. As shown in IDTechEx's newly updated market report, "Batteries for Stationary Energy Storage 2025-2035: Markets, Forecasts, Players, and Technologies", the Li-ion BESS market will reach US$109B in value by 2035.
Li-ion battery demand by sector
The EV sector has dominated Li-ion battery demand for the last few years. The rapid adoption and increased demand for Li-ion batteries in this sector have led to its improved performance, continued development, and rapid cost reduction. This has also benefited the energy storage system (ESS) market and helped to facilitate its growth. In 2023, ~960 GWh of Li-ion batteries were in demand globally across EV, ESS, and consumer electronics sectors. While the EV market dominated, the ESS sector saw 10% of this demand, up from 6% in 2021 and only 2% in 2015. While the EV sector will continue to form the majority of global Li-ion battery demand, the annual volumes in demand, by GWh, are to increase significantly in both EV and ESS sectors.
Li-ion Battery Demand by Sector (GWh) (left) and (%) (right). Source: IDTechEx
Li-ion BESS demand by country
IDTechEx estimates a 4x increase in Li-ion BESS installations made globally from 2021 to 2023. This is equivalent to 23.1 GWh made in 2021 and 92.3 GWh made in 2023. Chinese and US installations represented 49% and 22% of the installations made in 2023, respectively, emphasizing the continued market activity of players in these countries. Other countries are expected to continue contributing to the global BESS market, and demand will grow here too. Incentives and schemes being established will be key in driving growth in other countries, such as the UK, Italy, Germany, Australia, India, and Chile. For example, the Capacity Investment Scheme (CIS) in Australia will provide investment in renewable capacity and clean dispatchable capacity such as battery storage. In 2024, the first tender for Western Australia's wholesale energy market was announced via the Scheme, with an initial target of 500 MW / 2 GWh of "clean dispatchable energy". This will be key to growing Australia's grid-scale BESS market in the short term. For more information on regional developments, schemes, incentives, and global battery storage market data, please refer to IDTechEx's report.
Future technology and players' outlook
While Chinese players have contributed to significant growth of their domestic BESS market, they have continued to offer BESS at lower costs. This has given rise to a price war on Li-ion BESS in China, making domestic competition fierce. This is a key driver causing Chinese BESS integrators to start shifting some focus on playing more in overseas markets. Therefore, integrators in these markets are likely to face increasing competition over the coming years. Moreover, several Chinese BESS manufacturers have launched new and larger Li-ion BESS, reaching capacities of 5 MWh or greater for a single 20ft 'containerized' system. This has been achieved by using cells with larger form factors, which typically have a higher energy density, while also utilizing more of the space within containers. Offering Li-ion BESS with higher energy densities is likely to become more important for BESS manufacturers, especially with the global Li-ion BESS market now being dominated by LFP cells, which exhibit lower energy densities than NMC cells. Moreover, higher energy density BESS could offer cost reductions for customers at both transportation and project levels, given that fewer systems would be needed for a given project capacity.
In the past, the difference in BESS cost and other performance characteristics were more extreme between technologies using LFP rather than NMC cells. This allowed companies selling these systems to more easily express the advantages of their technology. Today, the majority of players are adopting LFP cells in their BESS technologies, and thus, it is becoming more challenging for players to differentiate or express their technologies' advantages. Therefore, more players outside China are slowly starting to launch their own 5+ MWh BESS technologies to at least stay in line with higher energy density technologies being offered by Chinese players. IDTechEx's market report benchmarks Li-ion BESS players' technologies and provides thorough analysis and discussion on Li-ion BESS technology trends related to chemistry, safety, cost and energy density.
In their new market report, "Batteries for Stationary Energy Storage 2025-2035: Markets, Forecasts, Players, and Technologies", IDTechEx brings readers a holistic overview of this market, including the following information:
Market Forecasts and Analysis
- Granular 10-year Li-ion BESS market forecasts by country (GWh), by sector (grid-scale, C&I, residential) and FTM vs BTM, and by value (US$B) for the 2016 - 2035 period. Li-ion BESS chemistry outlook for the 2016 - 2035 period is also provided.
Battery Storage Technologies
- Battery storage technologies, trends and comparisons, including Li-ion batteries, sodium-ion (Na-ion), redox flow batteries (RFB), metal-air batteries, lead-acid batteries, thermal batteries. Trends in Li-ion BESS technologies (cost, chemistry, energy density, etc.). Key discussion and analysis on 'zero-degradation' BESS, e.g., CATL TENER 6.25 MWh BESS.
Li-ion BESS Safety and Thermal Management
- Deep dive into Li-ion BESS safety, BESS fire incident case studies, root causes of BESS failures, thermal runaway explanations, cell design impact on safety, Na-ion safety, materials and systems to mitigate battery hazardous events, battery fire tests and regulations.
- Further analysis and discussion on BESS thermal management; forced air cooling versus liquid cooling technologies, players in this sector, pros and cons - cost, energy density, noise, operation and maintenance, installation times, etc.
Applications, Business Models, Revenue Streams
- Discussion on BESS used in front-of-the-meter and behind-the-meter applications.
- Comprehensive coverage on business models and revenue streams for battery storage through the value chain. Explanation of revenue generation mechanisms; price arbitrage, provision of ancillary services, and winning capacity market contracts. Other revenue generation mechanisms are also discussed, e.g. Power Purchase Agreements (PPA), flexibility optimization PPAs, revenue stacking, virtual power plants (VPP), etc.
Li-ion BESS markets, players and regional analysis
- Granular analysis and discussion on the global residential battery storage market. Includes updates on key player activity, key market drivers, residential battery storage market forecasts for the 2016 - 2035 period by country. Granular data analysis on residential battery storage installed in 2023 and 2022 by region, player market share by revenues generated and GWh residential BESS deployed, and residential battery storage chemistry trends. Data analysis collated from ~50 players' technologies on battery capacities, modularity of designs, energy density, cycle life, and warranties.
- Comprehensive and granular analysis on players deploying utility-scale (FTM) and C&I-scale Li-ion BESS, i.e., Li-ion BESS integrators, BESS manufacturers, and Li-ion cell suppliers. Key analysis on Li-ion BESS costs, integrators' installed volumes of BESS (GWh) for 2021 - 2023, key BESS integrator future project pipelines by GWh, year, and region, trends in player activity and market dynamics.
- Leading Li-ion BESS manufacturers' grid-scale technology benchmarking, business developments and key player activity, including BESS projects, manufacturing developments, cell suppliers, customers, partnerships, and strategic decisions.
- 20+ company profiles including Li-ion BESS integrators and manufacturers, and Li-ion cell suppliers.
Regional Analysis
- Regional analysis on leading countries in global BESS market including China, US, UK, Italy, Germany, Australia, India, Chile, as well as South Korea, Japan, and Africa. Includes detailed coverage, discussion and analysis on energy supply mixes, the emergence of Li-ion batteries for long-duration energy storage (LDES), regional policy developments and incentives for stationary battery storage (e.g., Inflation Reduction Act), tender announcements, schemes, renewable energy source (RES) and battery and energy storage targets, end-user electricity costs, capacity markets and de-rating factors, and notable GWh-scale BESS projects.
To find out more about the new IDTechEx report, including downloadable sample pages, please visit www.IDTechEx.com/SES.
For the full portfolio of energy storage market research available from IDTechEx, please see www.IDTechEx.com/Research/ES.
Upcoming free-to-attend webinar
IDTechEx Discusses Trends in Li-ion Battery Storage Markets and Technologies
Conrad Nichols, Senior Technology Analyst at IDTechEx and author of this article, will be presenting a free-to-attend webinar on the topic on Thursday 29 August 2024 - IDTechEx Discusses Trends in Li-ion Battery Storage Markets and Technologies.
This webinar will cover:
- Applications of BESS for grid-scale and residential battery storage markets.
- Overview of global Li-ion battery storage market growth, regional activity, market dynamics and trends.
- Comparisons across battery storage technologies (Li-ion, Na-ion, RFB, metal-air), and discussion on the current and future position of Li-ion in the energy storage market.
- Trends observed and analysis on these trends, including cell chemistry, energy density, safety, and thermal management in Li-ion battery storage technologies.
- IDTechEx's outlook and conclusions on the global Li-ion BESS market.
We will be holding exactly the same webinar three times in one day. Please register for the session that is most convenient for you.
Click here to check the timings and register for your specific time zone.
If you are unable to make the date, please register anyway to receive the links to the on-demand recording (available for a limited time) and webinar slides as soon as they are available.
About IDTechEx
IDTechEx provides trusted independent research on emerging technologies and their markets. Since 1999, we have been helping our clients to understand new technologies, their supply chains, market requirements, opportunities and forecasts. For more information, contact research@IDTechEx.com or visit www.IDTechEx.com.