Investing.com — Energy storage is expected to grow 34 times by 2050, according to UBS.
The current capacity of about 270 gigawatts (GW) is expected to increase to 9,000 GW to meet the needs of an energy mix dominated by renewable energy. By 2030, energy storage capacity is projected to grow eightfold to more than 2,000 GW.
The expansion of energy storage is seen as an important part of dealing with the temporary nature of renewable energy sources such as solar and wind. The UBS analysis is consistent with broad consensus among various reports that see significant growth in energy storage through 2030 and beyond.
Notably, the International Energy Agency's (IEA) 2024 report showed significant upward revisions to renewable energy projections by 2050, including a 30% increase in solar capacity from the 2023 report and an eleven-fold increase from the 2015 report.
“We view this as a sign that demand for energy storage is slowing and we may see further recovery,” UBS analysts said in a note.
The bank also shows the changing energy storage capacity linked to renewable assets, with estimates showing that storage capacity should represent around 20% of renewable capacity.
This change is further confirmed by the previous forecast of the UBS China Utilities group, which showed an increase in the rate of savings in renewable assets from 10% in 2020 to 20-30% in 2030.
The report examines the various types of energy storage technologies that may contribute to this growth, evaluating their advantages, disadvantages, and commercial viability.
“In our opinion, the types of savings achieved may vary across regions including due to these factors,” the analysts said.
While pumped hydroelectricity currently comprises the majority of energy storage and is not expected to grow significantly due to space limitations, battery storage systems are projected to have significant growth potential, UBS notes.
This growth is due in part to advances in the electric vehicle (EV) industry and resulting cost reductions, as well as the modular and flexible nature of battery systems.
“Batteries come in a wide variety of sizes (accommodating on a utility scale), batteries are modular, and can be placed wherever they are needed,” UBS analysts said.
However, the large expansion required for energy storage comes with challenges, particularly the limitations of certain electrochemical batteries. These include reliance on critical raw materials, geopolitical risks, water-related production issues, and concerns about life, safety, and economics of storage lasting more than four hours.
Analysts suggest that “other technologies may emerge as disruptors,” such as convulsions, compressed air, compressed CO2, and liquid air storage, as well as other battery types such as sodium-ion, iron-air, solid-state, and travel batteries.