Influenced by various factors like the rapid expansion of new energy capacity, the evolution of power trading models, the decrease in raw material costs, and backing from national policies, the global new energy storage market is undergoing swift development. Over the past two years, the energy storage market has experienced explosive growth.
Looking ahead to 2024, TrendForce anticipates the global energy storage installed capacity to reach 71GW/167GWh, marking a 36% and 43% year-on-year increase, respectively, and maintaining a robust growth trajectory. However, in comparison to the remarkable growth rates of 115% and 133% seen in 2023, the growth pace of installed capacity has noticeably decelerated. Across continents, Asia and Europe continue to exhibit high growth, whereas the Americas are experiencing a slowdown. The most substantial growth is observed in the Middle East and Africa.
Examining market segments, the market share in major markets such as China, the United States, and Europe remains unchanged, while Israel, the United Kingdom, and South Africa show improved growth rates.
In the past year, new installed capacity around the world skyrocketed to 71GW/167GWh.
China, the United States, and Europe collectively dominated the global landscape, comprising 84% of total installations.
From 2021 to 2023, the global energy storage installation base remained at a low ebb, but with burgeoning market demand, annual installed capacity doubled. TrendForce projects that the global demand for energy storage will sustain high growth in 2024. Nevertheless, the anticipated new installed capacity of 71GW/167GWh for 2024 reflects a more moderate year-on-year increase of 36% and 43%, a significant slowdown from the robust 115% and 133% growth rates witnessed in 2023.
Forecasts on Global Installed Capacity in 2024
As the primary drivers of global growth, China, the United States, and Europe are expected to commandeer 84% of new installations in 2024, continuing to spearhead the global surge in energy storage market demand. Furthermore, Asia-Pacific and Europe demonstrate consistent growth in installed demand, while the Americas experience a decline. The Middle East and Africa emerge as robust growth performers, fueled by their low installation base and impending grid connection projects.
The four regional markets are experiencing simultaneous growth, with ongoing high demand for energy storage.
Currently, leading countries in Asia have set clear installed capacity targets and implemented a range of progressive policies to drive capacity growth. Additionally, addressing the challenges associated with wind and solar power consumption is a common focus for many nations. Consequently, the overall demand for energy storage capacity is anticipated to maintain a robust growth rate in 2024.
TrendForce projects that in 2024, new energy storage installations in Asia will soar to 34.3 GW/78.2GWh, marking a substantial 40% and 47% year-on-year increase, with China continuing to dominate the incremental demand.
Forecasts on the Installed Capacity in Asia Pacific Area in 2024
In the Americas, energy storage subsidy policies largely hinge on tax credits and additional feed-in tariff incentives. The imperative to develop energy storage in North America, coupled with the economic viability of storage projects, surpasses that in Latin America. Challenges persist in Latin America, including limited available land and the absence of a regulatory system, suggesting a delayed uptick in installed demand for energy storage. The forecast for 2024 indicates that new installed capacity in the Americas will reach 15.6GW/48.9GWh, reflecting a year-on-year growth of 27% and 30%, signaling a deceleration in growth. Notably, the demand for energy storage in the U.S. continues to dominate the Americas market.
Forecasts on the Installed Capacity in Americas in 2024
The European region leads the world in planning for the new energy transition, and TrendForce projects that the fresh installed energy storage capacity in Europe will hit 16.8 GW/30.5 GWh in 2024, marking a robust year-on-year growth of 38% and 53%. Currently, subsidized energy storage policies in key European nations are predominantly facing budget exhaustion or declining subsidy amounts. The deceleration in household energy storage growth is causing a dip in installations in countries where household storage dominates. However, in the United Kingdom, where large-sized energy storage dominates, there's a notable increase in installed capacity. The demand for large-sized energy storage is being driven by government tenders and market-based projects, sustaining its strong growth momentum. Notably, Germany, Britain, and Italy lead in installed demand within Europe.
Forecasts on the Installed Capacity in Europe in 2024
Turning to the Middle East and Africa market, South Africa and Israel, as two major contributors to incremental growth, have outlined clear plans for energy storage installed capacity and possess well-defined subsidy policies. Fueled by strong demand in these two countries, the energy storage market in the Middle East and Africa is poised for significant growth. The expected new installed capacity of energy storage in the region is projected to reach 3.8GW/9.6GWh in 2024, reflecting a year-on-year growth of 36% and 62%. Currently, government bidding projects are the main drivers of market demand in the Middle East and Africa. However, the substantial growth in PV installed capacity is underscoring consumption challenges. With favorable policies and a thriving bidding market, it is anticipated that the demand for distributed PV and large-sized energy storage will experience simultaneous and robust growth, setting the stage for a strong upward trend.
Forecasts on the Installed Capacity in the Middle East and Africa in 2024
China and the U.S. Continue to Lead the Charge.
Positive demand is evident across various scenarios.
Since 2022, China has emerged as the world's largest energy storage market. Notably, the demand for commercial, industrial, and large-sized energy storage in China has been escalating, with their share steadily on the rise. Reflecting on 2023, China's new energy storage installations for the period from January to October reached an impressive 13.1GW/27.1GWh, far surpassing the levels seen in the same period the previous year. This surge is primarily attributed to a critical phase for grid connections, propelling installed capacity in Q2 and Q3 to outperform that in Q1, reaching 5.8GW/12.3GWh and 4.2GW/8.5GWh, respectively. Fueled by the grid connection activities scheduled before the year-end, Q4 quarterly installations are poised to set a new record.
Forecasts on the Installed Capacity in China in 2024
TrendForce anticipates that China's new installed energy storage capacity will reach 29.2 GW/66.3GWh in 2024, marking a substantial year-on-year increase of 46% and 50%, sustaining a high growth trajectory. In the realm of industrial and commercial energy storage, the widening gap between peak and off-peak electricity prices, driven by ongoing electricity reforms, has led to stable and significant demand from owners. Consequently, the deployment of energy storage is economically favorable, indicating a forthcoming release in industrial and commercial energy storage. Regarding large-sized energy storage, the urgency of large-scale ESS installation is underscored, particularly in grid-side energy storage, encompassing both dependent and independently shared storage. In the short term, there isn't expected to be a significant increase in household energy storage installations.
Forecasts on the Installed Capacity in the U.S. in 2024
In the U.S. market, during the first half of 2023, the new installed capacity of energy storage reached 2.5 GW/7.7GWh. Challenges related to the supply chain and delayed grid connections led to lower-than-expected installations. However, as these issues gradually resolved in Q3, we anticipate steady growth in large-scale energy storage installations, with the installed capacity of the United States expected to show a consistent increase quarter by quarter throughout 2023.
The implementation of IRA (Investment Tax Credit for Energy Storage) will gradually stimulate an increase in installed demand. TrendForce predicts that the new installed capacity of energy storage in the United States is projected to reach 13.7GW/43.4GWh in 2024, reflecting a 23% and 25% increase. While the year-on-year growth rate in 2023 exceeded 100%, the growth rate for 2024 has decreased compared to 2023. Notably, large-scale energy storage continues to deliver impressive performance. Moreover, the United States faces challenges in coordinating local grids, maintaining high economics for large-sized energy storage. This sector remains rich in profitability modes, especially with the growing proportion of power generation from wind and solar, coupled with existing ITC (Investment Tax Credit) subsidies. In conclusion, large-sized energy storage still holds the potential for high-speed growth.
Shifting focus beyond mainstream incremental markets, attention turns to several markets with a robust growth rate in energy storage: Israel, Britain, and South Africa.
Israel:
Israel has implemented several policies to propel its pursuit of energy independence. With the imminent grid connection deadline for large-sized energy storage projects, Israel's new installations are projected to hit 3.4 GWh in 2024, marking a remarkable year-on-year growth of over 200%.
United Kingdom:
As Europe's most mature large-size energy storage market, the latest iteration of the UK's future energy vision plan has significantly elevated the short-term goal for the installed capacity of energy storage. The government is set to introduce appropriate incentives to further boost the growth of energy storage demand. An explosive surge in demand for energy storage in the UK is anticipated in 2024, with new installations expected to reach 7.2GWh, an 80% year-on-year increase.
South Africa:
South Africa represents a quintessential energy storage market driven by steadfast demand. In 2024, South Africa's new installed capacity is poised to maintain a robust growth rate, expected to reach 3GWh.
As numerous countries expedite their energy transition efforts, energy storage occupies a pivotal strategic position, and its importance and necessity are indisputable. Currently, the new energy storage industry is still in its nascent stage, undergoing rapid changes on multiple fronts. Overall, in 2024, the global new installed capacity of energy storage is projected to decelerate after a period of explosive growth, returning to a more measured, rational pace.