Agency: U.S. demand for energy storage deployment drops by a third in two years
According to foreign media reports, research firm Wood Mackenzie Power & Renewables has released its latest global outlook report, lowering its forecast for energy storage deployment demand in the United States in 2022 and 2023 by about a third. The company's latest quarterly report "Global Energy Storage Market Outlook Update" pointed out that by 2031, the cumulative installed capacity of energy storage systems in the global energy storage market will reach 500GW, of which the United States and China account for 75% .
The report did not disclose its forecast for the cumulative total installed energy storage capacity in the global energy storage market by 2031. However, Bloomberg NEF predicted as early as November 2021 that the cumulative installed energy storage system worldwide will reach 358GW/1.028GWh by 2030.
The U.S. remains the global energy storage market leader, but disruption from trade tariffs has led Wood Mackenzie to downgrade its forecast for the next two years. The company has lowered its U.S. market demand forecast for 2022 by 34% and its 2023 demand forecast by 27%.
The reduction is due to disruptions to grid scale and distributed energy storage deployments due to anti-dumping and countervailing duty (AD/CVD) tariff lawsuits in the second quarter of this year. The U.S. government’s move was extensively covered by industry media at the time.
The company added that the U.S. solar and energy storage market has been hit particularly hard by anti-dumping and countervailing duty (AD/CVD) tariff investigations, with about 35% of grid-scale projects in hybrid deployments delayed in 2022. The energy storage market could still rebound, with some relief brought by an executive order issued by U.S. President Biden on June 6 that delayed for two years tariffs on PV modules from four countries in Southeast Asia.
As shown in the chart below, the United States and China will dominate the global energy storage market from 2021 to 2031, and the top ten global markets will account for 91% of new energy storage capacity over the same period. In most countries outside Germany, India and Japan, grid-scale energy storage will be the largest segment of growth, with residential and commercial and industrial (C&I) energy storage accounting for the majority. The company also said that the REPowerEU program provides a driving force for the energy storage market in Europe, which is expected to grow fivefold in size over the next decade, but its economic viability remains a challenge. The company forecasts that 12GWh of energy storage systems will be deployed in European countries over the next decade.
Grid-scale energy storage has yet to flourish in most countries in Europe, but growth in renewable power generation, constraints on natural gas supplies and overburdened grids are likely to drive growth.
At the same time, China will continue to dominate the Asia-Pacific market, but the profitability of projects remains a challenge for the sustainable development of the energy storage industry. It is currently considering providing policies to improve the cost of energy storage and enhance the economic incentives for projects.