Felicity Bradstock

Felicity Bradstock is a freelance writer specialising in Energy and Finance. She has a Master’s in International Development from the University of Birmingham, UK.

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• Global battery storage capacity surged to 375 GWh in 2024, led by China and the U.S., and is projected to rise ninefold by 2040.
• Falling costs and new technology are making storage projects more competitive than fossil fuel power plants.
• Governments and companies are investing heavily in utility-scale batteries, driving growth across Europe, the Middle East, Africa, and emerging markets.

Following the huge growth in global renewable energy capacity over the last decade, companies and governments have been steadily increasing investment in battery storage to help improve the stability of their green energy supply.

As countries worldwide develop their renewable energy industries, aiming to shift from a reliance on fossil fuels to alternative clean energy sources, such as wind and solar power, one of the main challenges has been to ensure a stable supply of energy to the grid. Solar power can only be produced during the day, while wind turbines only generate power when the wind is blowing. That means that most countries have continued to rely on fossil fuels during low or no production hours. However, this is gradually changing thanks to the deployment of utility-scale battery storage.

Battery storage can be used to store wind and solar power to deliver to the grid during the hours when no electricity is being produced. They mainly consist of lithium-ion batteries. In the U.K., which has the largest installed capacity of offshore wind in the world, the power source continues to be unstable without the use of batteries, which is a massive restriction to achieving a green transition. Battery storage allows producers to better match supply and demand, thereby reducing reliance on fossil fuels. The U.K. government estimates technologies like battery storage systems could save the country up to $48 billion by 2050, ultimately reducing people’s energy bills.

The multinational energy and gas utility National Grid says, “Intelligent battery software uses algorithms to coordinate energy production and computerised control systems are used to decide when to store energy or to release it to the grid. Energy is released from the battery storage system during times of peak demand, keeping costs down and electricity flowing.” 

In 2024, global energy storage increased by approximately 200 GWh, bringing the world’s total battery storage capacity to 375 GWh, according to a May Rystad Energy report. China took the lead, installing 100 GWh of new capacity, followed by the United States, which added 35 GWh. Germany, Australia, and the U.K. represented the other main additions. By 2040, the global battery storage capacity is expected to rise ninefold to over 4 TW, according to Rystad.

This massive capacity expansion has been supported by a fall in electricity storage prices, with battery projects decreasing significantly as the technology has improved and more commercial-scale projects are deployed. The global average cost of battery energy storage declined to under $300 per kWh last year, making it far more accessible than in the past. Rystad highlighted that if it were to fall to $250 per kWh, the cost of storing electricity could be as low as $60 per MWh, which could help operators to increase their profit margins.

A recent study suggested that, in Germany, the cost of developing and operating utility-scale solar with integrated battery storage has become cheaper than the equivalent cost for gas-fired power plants. Innovations in battery technology and lower costs have allowed for the development of round-the-clock solar power, with the world’s first 24-hour solar PV project announced for Abu Dhabi at the beginning of the year. The state-owned renewable energy company Masdar is designating $6 billion in funds to develop 5 GW of solar and 19 GWh of battery capacity, which it expects to come online in 2027.

If successful, this could encourage other companies to make similar investments, which would further drive down reliance on fossil fuels to fill the renewable energy supply gap. In addition, technological advancements have also led to longer-life batteries, with manufacturers guaranteeing 10,000 charge-discharge cycles and over 80 percent battery health during that lifespan at present.

Several new markets are investing in battery storage, which is accelerating the industry’s expansion. China and the U.S. continue to dominate the battery storage market in 2025, but several gigawatt-hour projects have been approved or are under development in Saudi Arabia, South Africa, Australia, Netherlands, Chile, Canada, and the U.K. New additions are expected to increase by 35 percent this year, with annual additions totalling as much as 247 GWh, according to BloombergNEF estimates. The industry is expected to see acompound annual growth rate of 14.7 percent through 2035, to achieve an annual addition of around 972 GWh that year.

According to BloombergNEF, utility-scale battery power is expanding more rapidly than previously predicted in Europe, the Middle East, and Africa, meaning it could overtake the residential sector to become the largest in the region from 2026. This has been supported by favourable policies and financial incentives across the region.

The world’s utility-scale battery storage capacity is growing at an unprecedented rate, as companies worldwide invest in making their renewable energy delivery more stable. Lower costs and technological advancements have encouraged more widespread uptake of battery storage, a trend that is set to continue for decades to come. 

By Felicity Bradstock for Oilprice.com

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