Li-ion batteries are the most widely deployed battery technology in electric vehicle (EV) and energy storage (ES) markets. Depending on the Li-ion battery chemistry, the technology outperforms many competing battery and energy storage technologies in terms of cost and other performance metrics such as cycle life and energy density. As a reliable and well-performing technology for battery energy storage systems (BESS), its demand in the global ES market has continued to grow at an impressive pace. This is expected to continue, and as found in their new market report, “Batteries for Stationary Energy Storage 2025-2035”, IDTechEx estimates that the global Li-ion BESS market will be valued at US$109B in 2035.
Many countries are transforming their energy supply mix and electricity grids by installing more renewable energy sources (RES) to avoid using fossil-fuel-based sources, such as coal, oil, and gas. With the increasing penetration of RES, more battery storage is needed to provide dispatchable power when energy from RES is not available, thus facilitating a more stable and reliable grid. IDTechEx’s new market report found that annual global deployments of Li-ion BESS grew 4x from 2021 to 2023, seeing 92.3 GWh deployed in 2023. While the US and China are responsible for the majority of recent Li-ion BESS deployments, other countries with emerging markets are soon expected to boom.
Li-ion Battery Storage Deployments by Country 2021 vs 2023. Source: IDTechEx.
BESS schemes and initiatives in Australia
Australia is no stranger to being an adopter of Li-ion BESS. In 2021, the country put their Victorian Big Battery online in Victoria state. This 300 MW / 450 MWh system uses 210 Tesla Megapacks and helps to provide back-up energy in the event of blackouts and stabilize grid frequency. Other initiatives are helping stimulate market growth, such as the Victoria Neighbourhood Battery Initiative to spur the growth of behind-the-meter (BTM) battery storage, and the New South Wales government launching a ‘1 GW / 8-hour duration of storage long-duration energy storage (LDES) tender. As identified in IDTechEx’s market report, several key 8-hour Li-ion BESS projects are expected to come online in the coming years in Australia, including a 50 MW / 400 MWh system from RWE, the Goulbern River BESS (49 MW / 392 MWh), and Richmond Valley BESS with a staggering 275 MW / 2,200 MWh capacity.
Also in 2023, the Australian government launched the Capacity Investment Scheme, to encourage investment in renewable capacity and clean dispatchable capacity such as battery storage, given the eventual closing of more coal power plants. In 2024, the first tender for Western Australia’s (WA) wholesale energy market was announced via the Scheme, with an initial target of 500 MW / 2 GWh of “clean dispatchable energy”. This is significant for Li-ion BESS growth in Australia as a whole, as the WA state has arguably been less committed to renewable energy or battery storage development in the past. Ultimately, the Li-ion BESS market in Australia will continue to thrive behind the backing of various schemes, initiatives, and targets.
Australia energy and battery storage initiatives, schemes, funding, and renewables and storage targets. Source: IDTechEx.
Italy to see grid-scale BESS transformation
The Italian battery storage market is currently driven by the BTM segment, especially in northern Italy. However, this is likely to be later driven by and composed of more utility-scale installations due to the recent and ongoing activity of the Italian transmission system operator (TSO), Terna, and grid-scale BESS auction reforms. It has been reported that Terna is looking to tender for up to 71 GWh of storage up to 2030, focusing on 4–8-hour duration BESS. This is a significant volume of energy storage demand, and the focus on demand for longer duration energy storage technologies highlights the growing penetration of variable renewable energy (VRE) in the country. Li-ion BESS and pumped hydro energy storage technologies are the most viable for the tender, though other technologies may also be considered in the future. The first auctions are expected to occur in 2024 or 2025, which would likely see 2026 or 2027 as the first years where BESS projects are deployed due to these tenders. This new tender mechanism will likely be a key driver for future grid-scale BESS growth in Italy.
Significant BESS pipelines in Chile
Chile aims to have 70% of energy consumption from renewable sources by 2030. The steady decline in power generated from hydroelectricity has been countered by relatively fast growth in solar PV and wind generating capacity. The high renewable resource abundance of wind and solar in Chile presents a strong opportunity for stationary storage systems ranging from residential and off-grid to grid-scale systems. To date, deployment of energy storage systems (ESS) in Chile has been limited, with 400-500 MW of storage installed, but this is expected to change over the next few years. Deployment of wind and solar PV is expected to grow quickly in Chile. This, coupled with grid congestion exacerbated by the country’s geography, and location of renewable resources compared to electricity demand centers, will create strong drivers for deploying grid-scale ESS. IDTechEx estimates that, from identified projects in various stages of planning through to construction, Chile’s grid-scale Li-ion BESS pipeline is at least 16 GWh as of H2 2024. A combination of battery storage and energy utility companies, including key players Sungrow, ENGIE, and AES, are involved in developing parts of this pipeline. This pipeline is significant for a market whose history shows a limited volume of BESS deployments, and suggests Chile is on the verge of a booming battery storage market.
Global Li-ion BESS market outlook
While the US and China have experienced, and will continue to see, significant growth in their Li-ion BESS markets, growing demand for ESS in other countries to support growing penetrations of RES will see other emerging Li-ion BESS markets boom. Australia, Italy, and Chile are but some of the key countries likely to undergo grid transformations over the coming decade. The UK, Germany, and India are examples of other countries that are expected to see significant growth in their Li-ion BESS markets. Financial support, new schemes and initiatives offered by governments, and new tender mechanisms from TSOs will be essential for driving this growth and helping governments reach their countries’ renewable energy targets.
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