The Europe energy storage market is expected to grow at a CAGR of approximately 22.57% during the forecast period. Factors such as the declining prices of lithium-ion batteries with increased application range and improved adoption and increased demand for uninterrupted power supply are expected to drive the European energy storage market. Moreover, the growing renewable energy sector which demands a higher need for energy storage is expected to promulgate the market. However, the demand-supply mismatch of raw materials such as a shortage of minerals required for the lithium-ion batteries is expected to restrain the growth of the energy storage market in the region.
- Batteries segment is expected to be the largest market during the forecast period in Europe, owing to the increasing shift toward higher levels of renewable energy into grids and the need for long-term energy storage.
- The Compressed air energy storage (CAES) can achieve an efficiency of 70-80%, which is a significant improvement from current 25-35%. Achieving such high efficiency can help CAES becoming a mainstream energy storage technology, in turn, allowing this technology to explore significant untapped potentials and creating opportunities for the market players.
- In Europe, Germany is expected to be the dominate during the forecast period marked by increasing energy demand from residential as well as industrial and commercial sector.
Key Market Trends
Batteries Segment to Dominate the Market
- Batteries are expected to be the largest segment during the forecast period in Europe's energy storage market. Moreover, there is a huge potential for the market to grow in this region over the forecast period, used to regulate voltage and frequency, reduce peak demand charges, integrate renewable sources, and to provide the backup power supply.
- Moreover, the increasing levels of renewable penetration and aging grid infrastructure are the major factors driving the increasing deployment of battery energy storage in Europe.
- In June 2018, Germany became the host to Europe’s largest battery energy storage system, of 50 MWh capacity. On the other hand, owing to the fall in the PV system and battery costs, the market for energy storage gathered pace in the country. By mid-2018, around 100,000 households and commercial operations had already installed PV battery systems in the country.
- One of the largest battery energy storage projects built in the United Kingdom was completed in July 2018. The 49.9 MW Pelham project was constructed by British Solar Renewables EPC (BSR EPC), for SMA Sunbelt Energy, a solar technology company in the United Kingdom.
- Furthermore, combining big batteries with renewable energy projects improves reliability without creating greenhouse gas (GHG) emissions, and therefore, homeowners and businesses are increasing focusing on the use of batteries for backup power and to capture the excess energy from rooftop systems to use whenever required, in turn promulgating the market in European countries.
Germany to Dominate the Market
- The energy storage market in Germany has experienced a massive boost in recent years, majorly due to the country’s ambitious energy transition project “Energiewende.” The boom of batteries and other storage technologies is expected to have a profound impact on Germany’s energy transition.
- The major driver of the battery storage in the country is the sharp price decline in lithium-ion batteries due to their wide use in consumer electronics and the increasing number of electric cars. In the last five years, the battery costs have more than halved in the country, and this trend is expected to continue in the coming years.
- Also, a number of public and private initiatives in the country are cooperating for the development of energy storage technologies. The federal government is making PV battery system investment very attractive through the provision of unique incentives, including low-interest loans and investment grants
- Therefore, with presence of supportive policies and investments augmented by the upcoming energy storage projects in the country are expected to drive the growth of energy storage market in Germany during the forecast period.
The Europe energy storage market is fragmented. Some of the key players are GS Yuasa Corporation, Contemporary Amperex Technology Co. Limited, BYD Co. Ltd, LG Chem Ltd, and Samsung SDI Co. Ltd.
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