Driven by decarbonization and the drive to zero emissions, the energy storage market is expanding at a rate of more than 20 percent every year1, with the US leading the charge to install utility-level systems, which collect energy from the grid or a power plant and discharge it when needed.

In Europe, too, where electric vehicle (EV) adoption is picking up at pace, the grid is not yet ready to accommodate all the EV chargers needed to satisfy this growing demand, increasing the need for battery energy storage. Meanwhile, there is huge potential in emerging economies like African markets, where back-up power is desperately needed due to grid instability.

Overall, the market is forecast to reach a value of almost $20 billion globally by 20272. It is also evolving to make the most of emerging technologies, such as artificial intelligence (AI). Players that incorporate these digital innovations into their battery energy storage systems, helping their customers optimize performance, enhance the lifetime of their systems and reduce operating costs, are the ones that will be in the best position to shape the energy sector in the years to come.

Machine learning: the future of energy storage

ABB’s unique selling points in energy storage are our modular approach to constructing products and our digital offerings. Our systems are pre-engineered, pre-tested and fully assembled, enabling seamless on-site installation. They are also integrated with the ABB AbilityTM cloud-based platform, which allows customers to view how their assets are performing remotely and implement changes to improve them, enhancing the lifetime of their equipment and reducing total cost of ownership.

Beyond our core USPs, we are focusing our R&D efforts on using AI to extend the lifetime of lithium-ion batteries. Using machine learning will allow us to maximize return on investment (ROI) for our customers’ installations. The idea is that the most advanced systems will be able to factor in outside influences, such as the weather, to learn the varying loads on the system, allowing it to operate in the optimal way.

In addition, we are investing a large proportion of our R&D spending into power conversion and hybrid systems that include other sources of energy storage, such as fuel cells, for which demand is growing. We are also focusing on another trend shaping the sector ‒ the growth of optimized DC microgrids with their own power conversion from MV to DC distribution.

These localized, self-sufficient energy systems incorporate generation, storage and demand within an autonomous power network, allowing them to level peaks in energy demand while reducing total cost for energy thanks to on-site generation.

Growth markets for energy storage: EVs, utilities, data centers and renewable integration

In the years ahead, key markets for ABB’s growing portfolio of energy storage solutions will include e-mobility (in Europe, electric vehicles’ market share grew to 12.1 percent in 2022, a 3 percent increase since the year before, and demand is only continuing to increase3), utility distribution and, at the transmission level, integration of renewables.

Another growth market is the need for back-up power, with more operators in heavy industries and utilities looking into energy storage to supply loads during power outages. Demand is particularly high in Africa, where the grid is unstable, but processing factories need a strong and consistent power supply.

As sustainable power becomes more important for data centers, we are also set to see greater take up of battery energy storage by data center operators. BESS allows data centers to store renewable energy generated on site (from solar PV panels or a wind turbine) to be used when it is most needed. It is also being hailed as a sustainable alternative to diesel gensets as currently, generators can’t be run on hydrogen.

Going a step further, energy storage could also help data centers become more active players in the power ecosystem by allowing the grid to tap into their unused reserves of power. This would allow utilities to respond to varying load demands and maintain frequency levels, thus reducing the risk of blackouts.

The shift has started

There remain some important barriers to the adoption of energy storage, including safety concerns and high costs. As an industry, we must collectively improve safety standards, an area ABB is highly focused on, from cell level safety to unit levels and supervisory controls. We are also working to demonstrate return on investment for energy storage, which, although battery costs have dropped significantly over the last five years, still represents a huge outlay for companies.

That said, the shift has already started, and the wider adoption of energy storage is inevitable over the next five, and certainly ten, years. This will largely be driven by the increasing integration of renewable energy sources into the grid and greater loads from the growth of e-mobility and data centers. With this huge demand on our electricity infrastructure, comes the need for greater grid resiliency and reliability, a role that energy storage systems can fulfill.

1. Battery Energy Storage Market to Hit USD 19.74 Billion by (globenewswire.com)

2. Battery Energy Storage Market to Hit USD 19.74 Billion by (globenewswire.com)

3. Fuel types of new cars: battery electric 12.1%, hybrid 22.6% and petrol 36.4% market share full-year 2022 - ACEA - European Automobile Manufacturers' Association