Multiple countries’ data shows a global surge in new installations in the energy storage industry. Europe’s residential energy storage value chain market is experiencing rapid growth. In 2022, the new residential energy storage installations in Europe reached 3.9 GWh, marking a 71% year-on-year increase, with a CAGR exceeding 60% from 2015 to 2022. Currently, Europe stands as the largest market for residential energy storage, with Germany accounting for over 70% of new energy storage installations. In 2022, the global residential energy storage installations reached approximately 20.5 GW, and it is expected to exceed 34.9 GW in 2024, representing a year-on-year increase of over 70%. Optimistic estimates suggest that the global installation capacity may reach 233 GWh by 2025, with a CAGR of 113% from 2022 to 2025.
China, the United States, and Europe actively dominate the global energy storage market as major growth markets, sustaining their competitive edge in new energy storage installations within these three regions.
What is Energy Storage?
Storing energy through media or devices and releasing it when required defines energy storage. The energy storage industry plays a pivotal role in driving energy structure transformation. Accelerating the growth of the energy storage sector holds immense importance in fostering economic development and establishing a robust energy production and consumption system.
What is the Value of Energy Storage?
The value of energy storage manifests in three aspects: power, capacity, and energy. Let’s delve into it further through the following chart.
Energy Storage Development Overview
From the point of view of the size of the installed capacity, large energy storage is the main force of the current global energy storage new installations.
From China’s point of view, in 2022, large storage new installed capacity accounted for 92% of the total new installed capacity. Currently, China’s dual-carbon goals are being pushed forward in an orderly manner, in the new energy project rigid supporting energy storage, around the development of hard development goals and other policies under the guidance of the development of a large storage business model development to the good, in the economy to get through will be a rapid release. In addition, China’s wind and light base planning a total of 450GW, the first batch of large-scale wind power photovoltaic base project (scale 95GW) was in July last year, and the construction of a full-scale is expected to be fully connected to the grid in 2024.
The United States is the global energy storage industry development earlier countries, according to the set of state consulting data, 2022, the United States large storage new installed capacity of about 4GW, accounting for about 80% of the total installed capacity, further validates the United States large storage boom. 2022, the United States part of the storage project due to the rise in raw materials/transportation costs, and other factors were delayed or canceled, is expected to improve this year, such a situation will be improved. With the further growth of U.S. PV installations in 2024 and the landing of subsidies for energy storage projects under the IRA bill, it is expected that U.S. energy storage demand will be expected to more than double the growth rate.
In Europe, in the case of soaring energy prices and an unstable supply chain, European demand showed a blowout growth, and the optical storage market was once hot. Take Germany, the main incremental market in Europe, for example, in 2022, Germany’s household storage new installations of about 1.03GW, accounting for more than 80% of the new installations. In 2022 February, Germany’s Ministry of Economy will give up the use of fossil fuels in 2035 (previously scheduled for 2040), to achieve a 100% renewable energy supply, it is not difficult to see Germany’s determination to accelerate the energy transition. In 2022 May, the EU implemented RE Power EU, which is the most advanced energy storage system in Europe. In May, the European Union implemented the RE Power EU program, which is intended to accelerate its green transition, also stimulating the growth of energy storage demand to a certain extent.
Energy Storage Value Chain
The energy storage industry chain is one of the important industries for sustainable and green development in the future, with broad market prospects and development potential. According to market research organizations, the global energy storage market size will continue to grow in the next few years and is expected to reach more than 20 billion U.S. dollars by 2025.
In the domestic market, with the continuous promotion of China’s new energy policy and the continuous expansion of application areas, the energy storage industry chain will also usher in rapid development and growth. According to the data of China Electric Power Energy Storage Industry Development Alliance, by 2025, China’s electric power energy storage market size will reach more than 40 billion yuan.
The energy storage industry chain can be divided into three parts: upstream, midstream, and downstream.
Upstream
Energy storage material manufacturers and energy storage equipment manufacturers. Energy storage materials include lithium-ion battery cathode and anode materials, electrolytes, diaphragms, etc., while energy storage equipment includes energy storage systems, energy storage controllers, energy storage inverters, and so on. Upstream companies mainly produce and supply these materials and equipment, and provide raw materials and production equipment for midstream and downstream companies.
Midstream
Energy storage system integrators and energy storage application solution providers. Midstream companies mainly integrate and assemble energy storage materials and equipment supplied by upstream to form energy storage systems, and also provide energy storage application solutions. These solutions can be industrial energy storage, home energy storage, grid energy storage, etc., to meet the needs of different customers.
From a global perspective, electrochemical energy storage has dominated since 2021, with electrochemical energy storage accounting for more than 50% of the newly installed energy storage capacity in 2021 and more than 65% in 2022.
Downstream
Energy storage product sellers and energy storage service providers. Downstream enterprises mainly sell energy storage products and services provided by midstream enterprises, including energy storage systems, energy storage solutions, and energy storage services. Downstream enterprises can be energy service companies, energy storage equipment agents, and energy storage system operators.
In general, the upstream of the energy storage industry chain is mainly manufacturers of energy storage materials and equipment, the midstream is integrators and solution providers of energy storage systems, and the downstream is sellers and service providers. The three parts are interdependent, and problems in any one of them will affect the development of the whole industry chain. As energy storage technology continues to develop and mature, the companies throughout the energy storage industry chain are also growing and enhancing their operations.
Energy Storage Battery Future Trend
Lithium-ion batteries are gradually replacing lead-acid batteries
Batteries offer a more efficient means of storing energy. Lithium-ion batteries possess benefits such as minimal environmental pollution, high energy density, extended cycle life, and robust performance as a multiplier. As its cost declines, the economy of lithium-ion batteries began to increasingly prominent, and its application in the energy storage market is becoming more and more widespread. Lithium-ion batteries are increasingly replacing lead-acid batteries in existing energy storage facilities, and this trend is expanding their usage. As a result, the future holds greater promise for the lithium-ion battery market in energy storage.
Lithium iron phosphate batteries are favored
In the energy storage lithium-ion batteries, lithium iron phosphate batteries compared to ternary material batteries have more advantages, is the mainstream direction of the future development of lithium-ion batteries, mainly because: energy storage batteries are mainly concerned about the economy of the battery production and use, and more consideration of the battery cost, cycling performance, the whole life cycle costs and other factors. Hence, manufacturers prefer lithium iron phosphate batteries due to their low production costs, extended cycle life, and other benefits.
Upgrade and optimization of battery management system
The battery management system is an important link in the energy storage industry chain, and its quality and performance will directly affect the service life and safety of energy storage equipment. Currently, the battery management system has realized automation and intelligent control, but there is still much room for improvement in system upgrades and optimization. In the future, the battery management system will be further upgraded and optimized to improve the overall efficiency and performance of the energy storage industry chain.
More intelligent energy storage technology
Secondly, energy storage technology will be more intelligent and controllable. The current energy storage equipment is mainly passive energy storage, that is, directly to the system to store energy or release energy. In the future, with the development of artificial intelligence, the Internet of Things, and other technologies, energy storage equipment will have higher intelligence and controllability. By predicting user demand, optimizing energy scheduling, and collaborating with smart grids and other interactions, energy storage systems will be able to manage and utilize energy more effectively.
Centralization and modularization
In addition, the future of energy storage technology will also show a more centralized and modular trend. Integrated energy storage systems can integrate a variety of energy storage technologies to achieve different forms of energy storage work together to improve energy conversion efficiency. Modular energy storage systems can be flexibly expanded and combined according to demand to meet various scale and performance requirements.
Energy Storage Value Chain Development Challenges
The development of the energy storage industry chain is facing some challenges, mainly in the following aspects:
1. Technical bottlenecks and cost issues
At present, there are still some bottlenecks in some technologies in the energy storage industry chain, such as the energy density and cycle life of battery technology. At the same time, the cost of the energy storage value chain industry is also high, and it is necessary to reduce costs and improve competitiveness through technological innovation scale effect and other ways.
2. Safety and environmental issues
The energy storage value chain industry involves a large number of raw materials and chemicals, some of which may have safety hazards and environmental pollution problems. Therefore, the energy storage industry chain needs to strengthen safety management and environmental protection measures to ensure the safety and environmental security of production and use.
3. Industry standards policies and regulations
The energy storage value chain industry chain also needs to establish sound industry standards policies and regulations to regulate the development and operation of the industry and protect the rights and interests of consumers.
MOKOEnergy: An Innovation-focused BMS Board Supplier
As a key monitoring system, BMS is an important part of the energy storage battery system, and the market size of energy storage BMS is close to $20 billion in 2025. However, compared with the BMS of automotive power batteries, energy storage BMS is more complex and more demanding. For this reason, MOKOEnergy has specialized battery management systems for different energy storage value chain systems, and the following are some reference guides when choosing different BMS.
- Specialized Energy Storage Frequency Regulation BMS – Designed for 2C applications in complex frequency regulation scenarios.
– Operates at ≤ 2C conditions.
– Undergoes 6 to 10 charge-discharge cycles daily.
– Rarely reaches full charge or full discharge states.
– SOC and SOH calculations are challenging but require high accuracy.
– Internal data response and data communication at the millisecond level, necessitating precise and rapid alarm and protection strategies, resulting in higher costs.
- User-Side BMS – Operates in more spartan conditions.
– Operates at a low rate (< 0.3C).
– Fixed charge-discharge times with nearly daily full charge and discharge cycles.
– SOC calculations are relatively straightforward, leading to lower costs.
- Home/Household Energy Storage – BMS requirements are unique, whether from PV or grid charging.
– Operates at a rate of 1C.
– Irregular charge-discharge times, requiring SOC accuracy within 5%.
– Requires remote upgrades and offers ultra-low-cost solutions.
- Wind/Solar + Energy Storage – Renewable energy storage with high variability.
– Operates at a rate of 0.5C to 1C.
– Irregular charge-discharge times with a need for precise SOC accuracy.
– Offers moderate-cost solutions.
Conclusion
With the acceleration of the global energy transition, the energy storage value chain industry will become one of the “new infrastructures” in the future energy sector, with broad market prospects. Energy storage technology will be rapidly developed in the next few years, including battery technology, supercapacitor technology, energy storage flywheel technology, compressed air energy storage technology, and battery management systems. At the same time, with the continuous progress of energy storage technology, the cost of energy storage equipment will be reduced, the energy storage industry chain in the future will be gradually commercialized, and continue to promote energy transformation and intelligent development. If you need a professional BMS manufacturer, welcome to contact MOKOEnergy.
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