Leading companies in smart energy storage innovation

Analysts forecast a compound annual growth rate (CAGR) of 9.0% from 2024 to 2034, reaching $425.8 billion by 2034. This expansion is driven by decreasing lithium-ion battery costs and increasing government initiatives to combat climate change. Smart energy storage systems, integrating smart grids, renewable energy sources, and IoT-enabled devices, are revolutionising energy production, distribution, and consumption globally.

Market drivers

Declining lithium-ion battery costs

The falling cost of lithium-ion batteries significantly drives the smart energy storage market. As these batteries become more affordable, energy storage projects are increasingly financially viable. They are being deployed in applications like microgrids, grid stabilisation, and renewable energy integration. According to IHS Markit, the average cost of a lithium-ion battery cell is expected to drop below $100 per kilowatt-hour (kWh) soon, potentially reaching $73/kWh by 2030. This cost reduction supports the adoption of lithium-ion batteries in both business and household applications connected to renewable energy sources such as solar, wind, or hydropower.

Government initiatives

Governments worldwide are implementing policies to transition to low-carbon energy systems, aiming to combat climate change and reduce greenhouse gas emissions. Smart energy storage systems play a crucial role in enhancing grid stability, increasing renewable energy deployment, and reducing reliance on fossil fuels. Governments are introducing programmes like renewable energy targets, carbon pricing mechanisms, and clean energy incentives. For example, in May 2023, EVE Energy Malaysia Sdn. Bhd. and Pemaju Kelang Lama Sdn. Bhd. signed a Memorandum of Understanding (MOU) to establish a state-of-the-art manufacturing facility in Malaysia, reflecting the global push towards smart energy solutions.

Regional outlook

Europe

Europe held the largest share of the global smart energy storage market in 2023. The region's need for resilient and sustainable energy infrastructure, substantial investments in smart grid technologies, and policies promoting clean energy drive market growth. Germany, for instance, has set ambitious carbon footprint reduction goals, aiming for a 65% reduction by 2030, 88% by 2040, and nearly 0% by 2045. The German government is also implementing measures to decarbonise the electricity sector in line with its medium- and long-term climate objectives.

North America

North America is expected to see significant growth in the smart energy storage market during the forecast period. Strong government support, widespread acceptance of advanced technologies, and a focus on grid modernisation are enhancing the region's market share. Initiatives such as renewable energy incentives and grid resilience programs are crucial in driving this growth.

Key players and innovations

Several companies are at the forefront of the smart energy storage market, investing in research and development (R&D) and launching innovative products to enhance system efficiency. Key players include BYD, Samsung, Panasonic Holdings Corporation, General Electric, Siemens AG, ABB, Beacon, and Toshiba Corporation. These companies are adopting advanced technologies such as thermal storage systems and intelligent storage systems to increase their market share. Additionally, they are investing in off-grid smart energy storage solutions for remote areas to expand their global footprint.

Recent developments

In May 2022, Itron announced the expansion of its long-term collaboration with Microsoft to accelerate cloud adoption and the next generation of consumer and grid edge solutions for utility and smart city industries. This partnership aims to leverage cloud technology to improve energy management and grid efficiency.

In March 2022, GE Digital introduced the first solution resulting from its acquisition of Opus One Solutions to support the energy transition. The Opus One Distributed Energy Resource Management System (DERMS) is designed to help utilities manage distributed energy resources, ensuring grid safety, security, and resilience while enabling energy affordability and customer participation in power generation.

Smart energy storage market overview

The introduction of smart energy technologies has led to a significant shift in the global energy landscape. The smart energy sector aims to create an ecosystem that is more responsive, sustainable, and efficient by integrating digital technology with traditional energy infrastructure. Smart grids, advanced metering infrastructure (AMI), demand response systems, energy management systems (EMS), and IoT devices combine advanced control and management systems with various technologies, including flywheels, supercapacitors, and batteries.

Smart energy supply systems (ESS) enhance the stability, reliability, and efficiency of energy supply, facilitating the integration of renewable energy sources such as wind and solar power. The deployment of smart power storage systems is increasing globally due to the decrease in the cost of lithium-ion batteries, making energy storage projects more financially feasible.

Conclusion

The smart energy storage market is poised for substantial growth over the next decade, driven by technological advancements and supportive government policies. Key players in the industry are investing in R&D and launching innovative products to enhance system efficiency and expand their global footprint. As the cost of lithium-ion batteries continues to decrease and government initiatives to combat climate change increase, the smart energy storage market will play a crucial role in the transition to a more sustainable and efficient energy ecosystem. With significant growth potential in regions such as Europe and North America, the market is set to transform energy production, distribution, and consumption worldwide.

These insights are based on a report on Smart Energy Storage Market by TMR.