Regional Analysis

Energy Storage System Market Regional Insights

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Regional Analysis:

Dominating Region: Asia Pacific

Asia Pacific is projected to lead the energy storage system market with 47.5% share of the market in 2024, driven by supportive government policies, tax incentives in countries like India, China, and Japan, and significant investments in renewable energy projects. The region's dominance is further bolstered by its status as a major hub for lithium-ion battery innovation, with leading companies spearheading research and development in advanced battery technologies essential for energy storage.

Fastest-Growing Region: North America

North America exhibits the fastest growth and is expected to dominate future expansion. Strong government backing for clean energy development to reduce fossil fuel import dependence as well as cope with increasing power demands is a major factor. Nations such as the U.S. and Canada have ambitious targets for renewable capacity additions over the coming years, necessitating energy storage deployment to support intermittent renewable sources.

Energy Storage System Market Outlook for Key Countries

A Leader in Clean Energy Transition in the U.S.

The U.S. energy storage system market is led by California with its robust policies to achieve carbon neutrality and modernize the electric grid. Companies like Tesla and Fluence have established a sizable presence supporting the state's clean power goals. The U.S. energy storage system market is experiencing rapid growth, driven by federal incentives and state-level policies. For instance, data published by The Conference of the Parties (COP) in 2023, The global energy storage capacity reached approximately 230 GW in 2022. According to Bloomberg NEF estimates, this capacity is forecasted to reach 650 GW by the end of this decade. However, the current installed capacity and projected trends are not sufficient to ensure a green energy transition.

China Dominates Energy Storage System Market with Record Growth and Cost Reductions

China leads the global energy storage system market, with substantial investments in renewable energy and storage solutions. For instance, data published by Statista in October 2024, in 2023, over 23 gigawatts in energy storage capacity had been added in China, which was a 221 percent increase compared to the previous year. Popular storage methods are pumped hydro and lithium-ion batteries.

India Accelerates Energy Storage System Market Growth with Policy Support and Major Investments

India continues to lead on the policy front with schemes boosting renewable capacity addition and interest in energy storage from both central and state governments. Reliance Industries is investing heavily in battery manufacturing to gain a foothold. India is actively advancing its energy storage capabilities through a series of government initiatives under the National Energy Storage Mission (NESM). In August 2023, the Ministry of Power released a comprehensive framework aimed at facilitating the development and deployment of ESS across the country. The framework outlines objectives such as improving grid reliability, supporting renewable energy integration, and fostering innovation in energy storage technologies.

Canada Advances Clean Energy Transition with Major Energy Storage Investments

Canada is investing in energy storage projects to support its clean energy transition. The country is focusing on integrating energy storage solutions to enhance grid reliability, manage peak demand, and facilitate the integration of renewable energy sources. In 2023, Ontario is developing the Oneida Energy Storage Project, a 250-megawatt (MW) battery storage system. This project, a collaboration between the Six Nations of the Grand River Development Corporation, Northland Power, NRStor, and Aecon Group, is set to become Canada's largest battery storage facility. It will enhance grid stability and support renewable energy integration.

Japan Prioritizes Energy Storage for Renewable Energy Growth and Energy Security

Japan is focusing on energy storage to support its renewable energy expansion and ensure energy security. The government has implemented policies and incentives to promote the adoption of energy storage systems, aiming to balance the intermittent nature of renewable energy sources and reduce reliance on fossil fuels. HDRE, a Taiwan-based company, entered the energy storage system in Japan market by securing a 20-year government subsidy for its decarbonization initiatives. The company plans to build 1.5 GW of energy storage systems in Japan over the next three years, involving a capital investment of approximately US$ 1.50 billion.