Energy storage: global capacity to increase by 1 TW by 2033

Global energy storage capacity – excluding pumped hydropower – will increase by almost 1 TW between 2024 and 2033, representing an increase of 636%. Tax incentives and hybrid auctions will accelerate the expansion of the technology around the world.

According to consulting firm Wood Mackenzie in its latest report, this makes this technology one of the fastest growing markets in the energy industry, as the challenges of integrating renewable sources such as photovoltaics and wind energy increase.

“Global energy storage deployment in 2023 achieved record growth of 162% compared to 2022, installing 45 GW/100 GWh. While impressive, the growth represents just the beginning of a multi-TW market […],” said Anna Darmani, principal energy storage analyst at the consultancy.

Also according to Wood Mackenzie, the global storage market should reach 159 GW/358 GWh by the end of 2024.

China will continue to lead the energy storage market due to the growing number of PV installations, with an average of 42 GW/120 GWh annual growth until 2033.

In Europe, large-scale projects are growing as developers look to take advantage of revenue opportunities. Demand from the distributed segment decreased by 23% in 2024, as retail rates stabilize. However, with lower system costs and regulatory changes, distributed market growth is expected to resume starting in 2026.
The growth of energy storage accompanies the advance of renewable energies, due to the need to provide flexibility to electrical systems.
From 2024 to 2033, developers estimate adding 5.4 TW of new solar and wind capacity. As a result, the cumulative global total will reach 8 TW by the end of the cycle. This move reflects efforts to electrify economies and achieve decarbonization goals.

The global forecast for solar energy points to an addition of 3.8 TW in the next 10 years, compared to 1.6 TW for wind energy. China will account for 50% of solar energy growth.

“Ultimately, maximizing solar PV capacity and wind capacity in this case over the next 10 years will depend on additional technological developments: from expanding grid infrastructure to fostering flexibility, transportation and transportation solutions. electrification of heating,” said Juan Monge, principal solar PV analyst at Wood. Mackenzie.

By 2023, dramatic drops in Chinese module prices and tight timelines for interconnecting tendered projects will have triggered 150% annual growth for installations across all solar PV segments.

Annual increases in annual installed solar capacity will continue until 2026, when Wood Mackenzie forecasts a two-year slowdown due to an expected pause in development activity before the next round of procurement drives further deployment.