Distributed Energy Storage System Market

Distributed Energy Storage System Market Outlook (2022-2032)

Valuation of the global distributed energy storage system market has reached US$ 4.2 billion in 2022 and is expected to increase rapidly at a CAGR of 9.6% to end up at US$ 10.6 billion by 2032.

Sales of distributed energy storage systems accounted for around 12% share of the global energy storage system market at the end of 2021.

Report Attributes	Details
Distributed Energy Storage System Market Size (2021A)	US$ 3.9 Billion
Estimated Market Value (2022E)	US$ 4.2 Billion
Forecasted Market Value (2032F)	US$ 10.6 Billion
Global Market Growth Rate (2022-2032)	9.6% CAGR
East Asia Market Share (2021)	~21.5%
North America Market Growth Rate (2022-2032)	~9.4% CAGR
China Market Growth Rate (2022-2032)	~11.1% CAGR
Market Share of Top 5 Companies	~18.7%
Key Companies Profiled	Fluence GENERAL ELECTRIC Hitachi Energy Ltd. Jabil Inc. Johnson Controls NextEra Energy Resources, LLC Juniper Networks Panasonic Corporation SAMSUNG SDI CO., LTD. Schneider Electric Tesla TOSHIBA CORPORATION

Sales Analysis of Distributed Energy Storage Systems (2017-2021) Vs. Market Projections (2022-2032)

According to the International Energy Agency (IEA), the annual investment required to meet global energy demand rose to US$ 1.9 trillion in 2021. Distributed energy storage systems aid in storing the excess energy that is generated to be utilized during power deficiency situations.

There has been a significant shift towards renewable energy due to environmental concerns about using fossil fuels and an increase in fossil fuel prices. Today, a majority of nations rely heavily on and invest in renewable energy sources to generate their electricity. This has resulted in huge demand for distributed energy storage technology, which helps store the excess energy produced by renewable sources for use during peak demand.

In today’s times, smart grids are power grids that integrate various technologies to monitor and control power flow and are effective in the efficient generation, distribution, and consumption of power. Distributed energy storage systems support and play a significant role in the deployment and operation of smart grids by balancing power generation and demand throughout the grid.

• Short Term (2022 Q2 to 2025): Growing smart grid market will positively impact sales of distributed energy storage systems for grid storage.
• Medium Term (2025-2028): North America and Europe will exhibit high distributed energy storage system demand due to increased focus on renewable energy projects.
• Long Term (2028-2032): Surging electric vehicle demand to open up opportunities for distributed energy storage system suppliers.

From 2017 to 2021, the global market for distributed energy storage systems registered a CAGR of 7.2%. Fact.MR, a market research and competitive intelligence provider, predicts that the market will surge at 9.6% CAGR through 2032.

Market share analysis of distributed energy storage systems based on battery type and region. Under the battery type segment, lithium-ion batteries lead with 34.7% market share.

Why is the Need for Distributed Energy Storage Systems Increasing Globally?

“Increasing Renewable Energy Projects Paving Way for High Market Growth”

Rising demand for power generation and the global shift towards clean and green energy have increased the demand for renewable energy. Governments across the world are implying rules and regulations to shift towards renewable energy and investing heavily in the same.

The power generated from renewable sources needs to be stored so that it can be utilized during normal as well as peak hours. Distributed energy storage systems for renewable energy storage comprise multiple small storage systems that are distributed and positioned close to end users for storing the energy generated from different sources.

• In 2019, the annual consumption of electricity rose to 22,848 TWh, with around 61% of electricity produced using fossil fuels. As per IEA, 63% of power generation came from combustible fuels in 2019. On the other hand, just 5% of total global electricity came from wind in 2019.
• According to a report by The International Renewable Energy Agency (IRENA), 3.1 TW of total renewable energy was produced around the globe in 2021, out of which, 0.8 TW came from wind energy.

With more and more adoption of power generation by renewable sources, the need for energy storage will increase, thus driving the demand for distributed energy storage systems over the coming years.

“Surging Electric Vehicle Industry Acting as Driving Factor for Distributed Energy Storage Systems”

Owing to an increase in the standard of living, consumer preference has shifted away from conventional vehicles and towards electric cars. A majority of EVs have batteries that are so huge that they can store a lot more energy than is required for a typical commute. These cars will have more than enough energy to supply the power that a typical household uses per day in addition to commuting.

Installing a bidirectional charging infrastructure will enable its use at home, where EVs will be able to be charged when there is an electrical supply and act as a source of power for home appliances when there is not. After its connection, the infrastructure can use the EV's battery bank to store excess energy from the grid, or, if needed, extract it and return it to the grid to balance out variations. Owing to this, demand for distributed battery energy storage systems is expected to grow rapidly over the forecast period.

Governments of various countries such as the US and European countries have released many policies to aid EV manufacturing. Global electric vehicle sales doubled to a whopping 6.6 million units, comprising of 10% of total cars sold globally in 2021. Total electric vehicles operating on the road were around 16.5 million units at the end of 2021.

As such, demand for distributed energy storage systems is expected to rise rapidly for energy storage over the years to come.

How is Market Growth Being Restrained to Some Extent?

“High Setup and Battery Cost Restricting Rapid Market Expansion”

The initial set-up cost of distributed energy storage systems is high and the maintenance cost is a further addition. Rising costs of several vital minerals required for battery production, supply chain interruptions brought about by Russia's war with Ukraine, and COVID-19 lockdowns in some parts of China are acting as a barrier to battery energy storage system market growth.

Lithium prices, which is a key mineral for automobile batteries, were roughly seven times higher in May 2022 than they were at the beginning of 2021. Since Russia produces 20% of the world's nickel for battery use, the Russian invasion of Ukraine has increased pressure on the market. Increasing use of lithium and the surging electric vehicle industry are factors contributing to the increased prices of lithium.

High initial set-up investment and high cost of batteries can impact the growth of the distributed energy storage system market negatively.

Country-wise Insights

What’s Driving Distributed Energy Storage System Demand in the U.S.?

The U.S. is the leading country when it comes to energy generation using renewable energy sources.

• According to the Energy Information Administration (EIA), the U.S. produced 826 TWh of electricity using renewable energy sources. Further, a total of 163 energy storage systems were installed in the country with a storage capacity of 1,688 MWh.

Central and local governments in the country have laid down different regulations and are providing incentives, thereby increasing the adoption of electric vehicles among the population.

• According to the U.S. Department of Energy, sales of electric vehicles grew by 85% in 2021 as compared to 2020.

The U.S. market for distributed energy storage systems will be further boosted by the increased usage of renewable energy sources for power generation. Thus, the United States battery energy storage system market is expected to reach a valuation of US$ 2.6 billion by 2032.

How is the China Distributed Energy Storage System Market Evolving?

China is the most populous country in the world. Increase in the population is leading to higher urbanization and industrialization, thus significantly increasing the demand for energy. China first started using distributed energy storage systems in 1998, and since then, these systems have developed rapidly owing to high energy demand and environmental problems in the country.

The 14th 5-year plan of China majorly focuses on energy security, followed by environmental development and decarburization. China has planned to generate 1,200 GW of energy from renewable sources such as solar and wind by 2025 and meet 25% of energy consumption through non-fossil fuel sources by 2030.

• According to IEA, China’s investments in 2021 to produce energy from clean sources was 30% of global investments.

These factors will enable the growth of the Chinese distributed energy storage system market in the long run, which is expected to generate an absolute dollar opportunity of US$ 1.2 billion by 2032.

Category-wise Insights

Why are Lithium-ion Batteries The Most Popular Type?

Lithium-ion batteries are the most commonly used battery type in energy storage systems and other electronic devices due to their various advantages such as high power density, high charge level, and high voltage. A majority of distributed energy storage systems comprise a rechargeable lithium-ion battery due to its characteristics of absorbing and releasing excess power quickly.

The use of lithium-ion batteries provides dependable and quick frequency response. Lithium-ion batteries have been extensively used in electric vehicles due to the high power-to-weight ratio, low self-discharge, and high energy efficiency, besides their components also being recyclable.

Owing to the above facts, the lithium-ion batteries sub-segment is predicted to expand 2.6X by the end of 2032.

Will Increasing Renewable Power Source Energy Collection Aid Market Expansion?

Renewable energy sources are a cleaner form of energy with zero carbon emissions. Traditional energy sources such as coal, natural gas, and other fossil fuels have many hazardous impacts, not only on human health but also on the environment. Major renewable energy sources that are utilized for power generation are solar and wind.

Utilization of the full potential of renewable energy sources, energy storage systems with their grid balancing and power optimization potential play an important role. DESS can help store the extra power generated from the renewable source to be utilized later on when there is no renewable energy source or to be transferred to the main grid system during electricity deficiency.

As a result, the market for renewable power-sourced energy collection is expected to grow more than 3X over the decade.

Competitive Landscape

Prominent distributed energy storage system manufacturers are ABB, Antora Energy, AutoGrid Systems, Inc. Black & Veatch Holding Company, BYD Motors Inc., Cision US Inc., Eos Energy Enterprises, Inc., Fluence, GENERAL ELECTRIC, Hitachi Energy Ltd., Jabil Inc., Johnson Controls, NEC Corporation, NextEra Energy Resources, LLC, Panasonic Corporation, SAMSUNG SDI CO., LTD., Schneider Electric, Tesla, and TOSHIBA CORPORATION.

• In June 2022, Lingtan Intelligence released its Tensorpack T 200kWh/100kW distributed energy storage DES system, battery, and energy management system, integrating batteries, thermal management system, DC/AC bidirectional converter, and fire protection system in the cabinet.
• In October 2021, Gogoro, Taipower, and Enel X collaborated to offer bidirectional charging through their battery swapping stations. This will broaden distributed energy storage systems by using more diverse sources.
• In September 2021, SimpliPhi Power and Lumin partnered to launch a user-friendly app to monitor the generation, consumption, and control of storage systems.

Fact.MR has provided detailed information about the price points of key manufacturers of distributed energy storage systems positioned across regions, sales growth, production capacity, and speculative technological expansion, in the recently published report.

Segmentation of Distributed Energy Storage System Industry Research

• By Energy Source :

  • Electricity Grids
  • Renewable Power Sources
    • Solar
    • Wind

• By Battery Type :

  • Lithium-ion
  • Nickel-cadmium
  • Lead-acid
  • Others

• By Capacity :

  • Single Phase
  • Three-phase

• By End User :

  • Commercial
    • BFSI
    • Education Institutes
    • Government & Public Sector
    • Healthcare
    • IT and Telecommunications
    • Retail & e-Commerce
    • Transportation and Logistics
    • Others
  • Residential

• By Region :

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Oceania
  • Middle East & Africa