The growing scarcity of traditional energy sources and the worsening environmental conditions have significantly accelerated the development of new energy technologies, leading to a rapid increase in power generation capacity. Renewable energy generation, primarily based on wind and solar resources, often experiences fluctuations and intermittency. The advancement of energy storage technology has largely mitigated these challenges, paving the way for the widespread application of renewable energy and injecting new vitality into the stability and efficiency of global energy systems. In the current wave of energy transformation, energy storage technology serves as a crucial bridge connecting renewable energy with traditional power grids, becoming an indispensable force driving a green future and subtly reshaping the energy market landscape.
Growing Demand for Energy Storage Amidst Large-Scale Renewable Integration
In recent years, the global energy storage market has witnessed explosive growth. By 2024, the demand for installed energy storage capacity is expected to surge, with a significant increase in project tenders and planning, as well as a steady rise in storage duration. According to Bloomberg New Energy Finance (BNEF), the global energy storage market is projected to exhibit robust expansion in 2025, with new installed capacity anticipated to reach 221 gigawatt-hours, reflecting a 36% year-on-year increase. This growth is primarily driven by the demand for large-scale integration of renewable energy sources. The rapid advancement of wind and solar energy has become the core engine for the growth of the energy storage market. The International Energy Agency (IEA) forecasts that by 2025, renewable energy is expected to account for 35% of global power generation, with wind and solar power surpassing 20%.
To mitigate the uncertainties brought by natural conditions and ensure the stable operation of power systems while efficiently absorbing renewable energy, energy storage systems have become an integral part of the electrical ecosystem. These systems can store electricity during periods of surplus renewable generation and release it during shortages, playing a vital role in peak shaving and valley filling, which effectively enhances the flexibility and reliability of power systems. A report by the International Renewable Energy Agency (IRENA) indicates that as the proportion of renewable energy in the energy structure continues to grow, the role of energy storage technology in balancing energy supply and demand and enhancing grid resilience becomes increasingly critical. In the next five years, the installed capacity of energy storage is expected to experience geometric growth.
As the significance of energy storage technology in power systems becomes more pronounced, governments around the world are recognizing the importance of the energy storage industry and actively implementing a series of supportive policies to create a favorable environment for the flourishing development of the energy storage market. The European Union’s “Green Deal” aims to increase the share of renewable energy in energy consumption to 40% by 2030, paired with the introduction of energy storage subsidy policies and market access mechanisms. In the United States, tax credits and investment subsidies are being employed to vigorously encourage the construction of energy storage projects, with several states establishing clear energy storage procurement targets. In February of this year, China issued the “Action Plan for the High-Quality Development of New Energy Storage Manufacturing,” which explicitly states the intention to accelerate the iteration and upgrading of mature technologies such as lithium batteries, support disruptive technological innovations, and enhance the supply capability of high-end products. By 2025, new energy storage is expected to transition from an initial commercial stage to a phase of scaled development with conditions suitable for large-scale commercial applications.
The implementation of these policies has greatly stimulated the enthusiasm of market players to invest in energy storage projects. Research by energy consulting firm Wood Mackenzie shows that policy incentives significantly influence investment decisions in energy storage projects. In regions with clear policy support, such as California and Texas in the U.S., the intent to invest in energy storage projects has increased by nearly 60%.
Energy Storage Technology Driving Energy Transformation in the Oil and Gas Industry
Energy storage features functions such as energy storage, system frequency regulation, peak-valley adjustment, and enhanced renewable energy absorption capacity, offering substantial development opportunities across various application scenarios, including the power supply side of oil and gas fields, the grid side of electricity transmission, and the user side across upstream and downstream sectors of the oil and gas industry. Driven by the “dual carbon” goals, traditional oil companies are actively entering the energy storage field to adapt to future changes in the energy market. As early as 2016, TotalEnergies acquired Saft, a world-leading battery technology research and development company, marking its entry into the energy storage sector. In 2023, TotalEnergies deployed a battery storage system in Belgium, which is its largest battery storage project in Europe. In recent years, TotalEnergies has continued to increase its investment in energy storage, announcing plans to achieve a total production capacity of 35 gigawatts for renewable energy and energy storage by 2025, and 100 gigawatts by 2030.
BP fully acquired the UK solar company Lightsource bp in 2023, integrating energy storage into its energy transition strategy and actively launching multiple energy storage projects worldwide while increasing research and development investments in this area. In December 2024, BP officially launched its largest battery storage project in Australia—the Woolooga “solar + storage” project.
China’s energy storage market is also developing rapidly. At the beginning of 2025, BYD Energy signed a contract with Saudi Electricity Company for the world’s largest grid-side energy storage project. Zhonghe Storage successfully delivered a megawatt-level long-duration flow battery energy storage system for a key project in Europe. Domestic oil and gas companies are also advancing energy storage business development based on their unique needs and application scenarios. For instance, China National Offshore Oil Corporation (CNOOC) is actively exploring the integration of offshore wind power and energy storage, planning to deploy storage facilities near offshore wind farms to address the issue of strong intermittency in offshore wind power, with relevant preliminary research and pilot preparations currently underway. China National Petroleum Corporation (CNPC) is exploring energy storage business opportunities and has initiated pilot projects in several key areas. For example, in oil and gas fields, CNPC is leveraging energy storage technologies to effectively address electricity stability issues during oil and gas production. In December 2024, CNPC’s first independent solid-state battery energy storage station—the North China Oilfield solid-state battery energy storage station—was successfully put into operation, significantly improving the energy conversion efficiency of storage batteries. Additionally, CNPC has maintained close cooperation with leading companies in the energy storage industry, such as forming a joint venture with CATL to establish the China National Oil Era Energy Storage Technology Company, focusing on the research and development of long-duration energy storage batteries and developing battery thermal management technology for high-altitude regions, further enhancing the integration and production capacity of energy storage battery systems.
Global Energy Storage Market Continues to Expand Despite Challenges
As renewable energy continues to gain traction and the demand for flexibility and stability in power systems increases, the global energy storage market is expected to maintain a high growth trajectory. The IEA believes that under established policy frameworks, renewable energy will provide 80% of new power generation capacity by 2030, with solar photovoltaic generation accounting for more than half. The growing share of renewable energy in electricity demand is projected to have a positive effect on carbon emissions reduction. A report from Wood Mackenzie indicates that the energy storage market has experienced a compound annual growth rate of 28% over the past five years, with global installed energy storage capacity expected to exceed 1000 gigawatts by 2030. The IEA’s “2025 Power Report” emphasizes the need for countries to increase investments in renewable energy systems, particularly in grid and energy storage, stating: “Proactively addressing deployment barriers, improving grid infrastructure, and expanding storage capacity will be key to achieving global energy transformation.”
However, despite the promising outlook for the energy storage market, it faces numerous challenges, including cost pressures, regulatory frameworks, technical standards, and safety issues. First, the cost of batteries constitutes a significant portion of the total cost of energy storage systems, somewhat limiting the large-scale promotion and application of these systems. Efforts are required to accelerate the research and development of new energy storage materials and technologies, expand production scales, and continuously optimize the cooperation across the industry chain to reduce storage costs. Bloomberg New Energy Finance analysis suggests that if battery costs can decrease by 30% within the next three years, it will mark a turning point for the large-scale application of energy storage systems. Recently, LG Chem announced an investment of $1 billion in the development of new battery materials, aiming to reduce battery costs by 20% by 2026.
Secondly, the related policies regarding energy storage development in various countries are still in the process of improvement, particularly concerning trading rules and standard systems for energy storage participation in power markets, which remain underdeveloped. The planning, construction, and operation phases of energy storage projects lack unified standards and norms, introducing uncertainty into industry development. A report from the Energy Charter organization indicates that in some countries, unclear policies have extended the preliminary approval cycle for energy storage projects by two to three times, increasing investment risks. For example, some states in the U.S. have only recently begun to draft specific rules for energy storage participation in grid dispatch, leading to slow progress in energy storage project construction.
Lastly, the standardization and safety of energy storage technology are also significant factors constraining its large-scale application. Currently, there is no unified global standard for energy storage technologies, posing considerable challenges in the design, manufacturing, and operation of energy storage systems. Additionally, safety concerns surrounding energy storage systems are under scrutiny, particularly in large-scale applications, as the safety of these systems directly impacts the stability and reliability of the power grid. For instance, a fire incident at the Moss Landing energy storage facility in California, one of the largest energy storage plants globally, highlighted the importance of safety in energy storage systems, prompting the industry to accelerate the formulation of relevant safety standards. The International Electrotechnical Commission (IEC) is leading the development of a global unified safety standard for energy storage technologies, which is expected to be gradually improved and implemented in the next two to three years. Meanwhile, many companies and research institutions are increasingly investing in the development of safety technologies for energy storage, such as researching new flame-retardant battery materials and optimizing battery management systems, striving to reduce safety risks from the source and ensure the healthy and orderly development of the energy storage market.
