The rise of utility-scale battery storage is dramatically transforming power markets worldwide. As nations increasingly shift towards renewable energy sources, battery storage ensures a consistent supply of clean electricity from intermittent sources like wind and solar. The significant growth in battery storage over recent years is largely attributed to the plummeting costs of lithium-ion batteries, which have decreased by nearly 90 percent over the past 15 years due to expanded commercial production.
China currently leads the global battery production sector, but other regions, including Europe, India, and the United States, are rapidly developing their manufacturing capabilities. Projections indicate that global energy storage additions are on track to break another record this year, largely driven by contributions from China and the U.S. According to estimates, annual energy storage deployment (excluding pumped hydropower) is expected to reach 92 gigawatts (GW) by 2025, marking a 23 percent increase from 2024. China is anticipated to contribute over 50 percent of this capacity growth, while the U.S. will account for around 14 percent.
Despite challenges, the U.S. energy storage sector has shown remarkable resilience. The country aims to achieve 35 GW of battery storage by 2025, a target that seemed overly ambitious just a few years ago. The progress has been mixed; while states like California have significantly ramped up battery storage capacity—growing approximately 30 times since 2018—other areas, particularly in the Southeast, lag behind. California, Texas, and Arizona together represent around 80 percent of the total U.S. battery storage capacity.
The disparity highlights the complexities facing the industry. Utilities in certain regions remain hesitant to invest in battery storage, often due to safety concerns. In some cases, local governments have imposed bans on large battery installations. Nevertheless, companies like Eolian have persisted, focusing on developing projects in major metropolitan areas of the western U.S. CEO Aaron Zubaty noted that the company began its initiatives in 2016 and is set to operationalize significant projects by 2025, including a 200-MW coastal battery site in Portland, Oregon.
Internationally, the expansion of battery storage capacity is also gaining momentum. In Mexico, experts anticipate significant growth in battery storage in the coming years. Enrique Garduño, CEO of energy equipment firm Skysense, expressed optimism about the country’s potential, predicting a storage boom around 2027 to 2029 due to regulatory changes and advancements in storage technologies. Skysense aims to enhance its storage capacity from 200 megawatt-hours (MWh) currently to an additional 300 MWh by 2026.
In addition to Mexico, India is also looking to boost its battery storage capabilities. However, the country faces hurdles in attracting investment. Record-low bids for battery storage projects have emerged, highlighting concerns over economic viability and safety risks. India aims to double its renewable energy capacity to 500 GW by 2030, but achieving this goal will require substantial growth in battery storage to ensure a reliable power supply without excessive reliance on fossil fuels.
The global battery storage boom signifies a crucial shift in energy dynamics, with various governments and energy companies investing in technologies that support a green transition. Yet, disparities in progress across different regions could slow the transition away from fossil fuels unless significant investments are made in the sector. The coming years will be pivotal in determining how effectively nations can leverage battery storage to support their renewable energy goals.
