Orrick Energy Storage Update 2024: A Global Portrait of Surging Growth

This report was produced by Orrick, a member of IPFA. 

The global battery storage market continues to grow dramatically. In the United States, developers installed 8.7 GWs of battery storage capacity in 2023, a 90% increase from the prior year.  The global storage market grew by 110 GWhs of energy storage capacity in 2023, an increase of 149% from the previous year. Investment in the global storage sector grew 76% in 2023, to $36 billion.

The growth will continue, driven by several opportunities:

• The continuing expansion worldwide of installed intermittent renewables generation (including solar and wind capacity) requires increasing amounts of battery storage to effectively integrate the additional renewables while maintaining grid reliability.
• In the United States, the Inflation Reduction Act created incentives that continue to transform the stand-alone storage and co-located battery storage finance markets, while capacity markets are expanding and driving additional utility procurement of storage in certain jurisdictions.
• Developers, financing parties and load-serving entities are becoming more comfortable with technology risks associated with grid-tied battery storage projects, resulting in many more offtake, procurement, financing and M&A transactions.
• Although market disruptions for lithium-ion and battery systems hit their peak during the COVID-19 pandemic, the supply chain issues and related factors creating market disruptions have decreased and markets are operating more predictably, which facilitates procurement and financing.

Orrick’s Energy Storage Update 2024 presents the latest trends and issues accompanying this sector growth and maturity.

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