Investing.com – Energy storage is expected to grow 34-fold by 2050, according to UBS.
The current capacity of around 270 gigawatts (GW) is expected to increase to over 9,000 GW to meet the demands of an energy mix increasingly dominated by renewables. By 2030, energy storage capacity is expected to increase eightfold to over 2,000 GW.
Expanding energy storage is seen as a critical component to counteract the intermittent nature of renewable energy sources such as solar and wind. UBS’s analysis falls in line with a broader consensus of various reports that forecast significant growth in energy storage through 2030 and beyond.
In particular, the International Energy Agency’s (IEA) 2024 report indicated a significant upward revision to renewable energy capacity projections for 2050, including a 30% increase in solar capacity compared to the 2023 report and an 11-fold increase compared to the 2015 report.
“We view this as a sign that energy storage needs have been underestimated and further upward revisions could occur,” UBS analysts said in a note.
The bank also points to the changing dynamics of energy storage combined with renewable assets. Estimates suggest that storage capacity will account for around 20% of total renewable capacity.
This shift is further supported by previous forecasts from the UBS China Utilities team, which predicted an increase in the storage share of renewable assets from 10% in 2020 to 20-30% in 2030.
The report examines a variety of energy storage technologies that could contribute to this growth, assessing their advantages, disadvantages and commercial viability.
“In our view, the types of storage implemented are likely to vary regionally, partly due to these factors,” analysts said.
While pumped hydro currently accounts for the majority of energy storage and is not expected to see significant growth due to geographic constraints, significant growth is forecast for battery storage, 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 many different sizes (from residential to utility-scale), batteries are modular and can be placed wherever they are needed,” UBS analysts said.
However, the significant expansion of energy storage brings challenges, particularly the limitations of certain electrochemical batteries. These include dependence on critical raw materials, geopolitical risks, water-related production issues, and concerns about lifespan, safety and the economics of storage longer than four hours.
Analysts say “other technologies could emerge as disruptors,” such as gravity, compressed air, compressed CO2 and liquid air storage, along with alternative battery types such as sodium-ion, iron-air, solid-state and flow batteries.
