The Americas region will overtake Asia Pacific by 2025 to lead the global energy storage market, with a total capacity of 371 gigawatt-hours in 2030, according to Wood Mackenzie.
Most of the growth will come from the US.
China will place second (150GWh), while Japan will sit third (25GWh) by the end of the decade.
The slowdown in Asia Pacific is partly due to challenges from market incentives and business cases.
Wood Mackenzie found that though Asia Pacific led the global storage market last year, with deployments reaching 13GWh, growth has mainly relied on pilots, government subsidies and grid interconnection requirements over the past decade.
Without strong policy support, it will be difficult to scale up the front-of-the-meter (FTM) segment across the region, said the analyst.
The US tripled storage installations in 2020, accounting for 38% of new capacity.
China, Germany, and the UK saw double-digit growth during the pandemic, while Australia’s installations fell in year-on-year numbers.
Steady growth in a number of key countries during the coronavirus pandemic and strong recovery in 2021 will accelerate global energy storage adoption in the long term, said Wood Mackenzie.
Wood Mackenzie energy storage head Dan Finn-Foley said: “2020 was a record year for global energy storage.
“The market exceeded 15 GW/27GWh in 2020, increasing 51% in GWh terms, and is expected to grow 27 times by 2030 by adding 70 GWh of storage capacity a year to surpass 729 GWh in 2030.
“Approximately $5.4 billion of new investment was committed to storage projects across the world last year, increasing the total cumulative investment to an estimated $22 billion.
“By 2025, the overall investment pot will reach $86 billion, with a 24% CAGR despite the economic slowdown caused by COVID-19.”
The global market began to move from small-scale short-duration batteries to four-hour batteries last year due to coronavirus impacts, said the analyst.
The pandemic caused power demand to fall in 2020, putting downward pressure on wholesale power prices and reducing the need for peaking units.
Long-duration batteries helped to strengthen grid reliability and reduce the risks of power outages during this period. By 2030, the average lithium ion project size will increase from 100-MWh scale to 1GWh scale, up sevenfold.