As renewables and distributed energy continue to expand, the importance of batteries also grows.

Batteries help store power generated by solar and wind power, and by compensating for the variability of those technologies, they also help stabilize distribution over the grid.

The prevailing trends in electricity generation point to an expanding market for battery energy storage. Recent studies foresee robust growth in the near term.

A study by the research firm Markets and Markets, Northbrook, Ill., projects the battery energy storage system market to grow at a combined annual rate of 32.8% from 2020 to 2025, from $2.9 billion $12.1 billion, over the five-year span of 2020–2025.

A number of factors are contributing to this trend. The study identifies the primary drivers as an increasing demand for continuous power and energy storage systems in critical infrastructures, adoption of grid energy storage solutions, grid modernization efforts and increasing usage of lithium-ion battery-based energy storage systems due to its excellent features.

The study also expects the above-500 megawatt-hours segment of the battery energy storage system market to grow at the highest rate during the forecast period. A battery energy storage system with a high capacity and a low power rating delivers a low amount of electricity for a long time. It is sufficient to run a few crucial appliances and can help in running other power plants during times of high electricity demand.

Another study highlights similar trends. According to the “Energy Storage Tracker 4Q2020” report from Guidehouse Insights, Boulder, Colo., several key factors continue to increase the global need for energy storage deployments. One trend has been the replacement of expensive “peaker” plants, which generally only run during times of high electricity demand and use fossil fuels with advanced battery energy storage systems.

At least one utility is making a notable investment in battery storage technology. Pacific Gas & Electric (PG&E), San Francisco, is asking state regulators to approve a second round of energy storage procurements. The request includes six different battery storage projects totaling 387 megawatts (MW) of capacity. One of these will be the utility’s first large-scale contract for behind-the-meter batteries. It is comprised of a fleet of behind-the-meter battery energy storage resources totaling 27 MW located across a variety of sites in PG&E's service area. The request follows a first round of procurements in May of 2020 for 423 MW of battery energy storage capacity. Those projects are scheduled to be online by August of this year.