This article evaluates the readiness of the BESS market to meet increasing demands in terms of battery costs, policy incentives, and the concentration of market players.
Lower lithium battery costs: A gateway to BESS commercialisation
The energy storage market has grown because of the lower costs of lithium-ion batteries. Costs reduced by 90% from 2010 to 2020, making entry easier for BESS, and growing the market.
Legislative measures spurring BESS expansion: A global endeavour
The major power-producing nations and regions such as the US, UK, EU, Japan and China have adopted legislation in recent years to promote energy storage systems. Policy encouragement and tax relief have bolstered this in an effort to boost domestic application. For instance, in 2022 the US passed the Inflation Reduction Act (IRA), investing
$370 billion in renewable energy and climate change initiatives. Energy storage equipment stands to gain an investment offset of over 30%, thanks to this Act. In 2021, China set a goal of 30 GW of storage by 2025 to expand its energy storage industry.
The BESS market: A melting pot of players
Although there is no predominant market leader in the BESS landscape, a few early entrants have gained some market hold. The market continues to attract new players. Notably, the top seven battery storage suppliers have lost market share, from 61% to 33% this year, as indicated by a 2022 report, ‘Battery Energy Storage − Value Chain Integration is Key’. This shows that BESS is heading toward commercialisation, with more market players.
Transition from early adopters to early majority: The role of IT/OT integration
The trend towards cleaner energy sources is irreversible, creating new and quick growth prospects for the BESS market. Both industry experts in battery cabinet manufacturing and startups investing in BESS are pushing beyond basic requirements. They are now focusing on providing faster construction, longer-term operations, and safer network system designs. Therefore AI, big data and network security must be further introduced. Success in the BESS market will require strengthening IT and OT integration technology, and creating better energy storage solutions.
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