Battery energy storage set to rise sixfold by 2030

Electrification, industry and the AI/data centre surge are all driving demand for BESS, with China and the US leading the market.

A recent report from industry consultancy GlobalData indicates that battery energy storage system (BESS) capacity is on a sharp rise globally, thanks to demand from electrification, industry and the AI/data centre surge.

The higher proportion of wind and solar power being introduced to the grid is also leading to a requirement for batteries to firm up these more variable forms of energy.

Other factors driving the growth of BESS are declining lithium-ion costs, stronger supply chains, and supportive policies.

As a result of these influences, global battery energy storage installed capacity is projected by GlobalData to rise sixfold at a compound annual growth rate of 42% from 2025 to 2030.

The report, ‘Strategic Intelligence: Batteries in Power (2026)’, reveals that China and the US will remain the dominant players in the global battery energy storage system market. The combined share of the two countries in global BESS capacity stood at 74.6% at the end of 2025, driven by supportive regulatory frameworks, massive utility-scale procurement and aggressive clean energy mandates.

One trend observed by Rehaan Shiledar, Power Analyst at GlobalData, is that the global power sector is increasingly adopting a standard of four-hour battery energy storage systems rather than two-hour designs.

“Higher shares of solar and wind create longer daily mismatches between generation and demand,” Shiledar said. “It makes multi-hour ‘shifting’, especially moving midday solar into the evening peak, more valuable to reduce curtailment and provide reliable capacity during steep net-load ramps.

“This is reflected in utility and regulator procurements, which often treat four hours as a minimum for capacity credit and resource adequacy.”

Australian state tenders in Victoria and New South Wales, for example, are specifying multi-hour storage to firm renewables. Under California Public Utilities Commission (CPUC) programs, most of the battery projects built also have a four-hour duration.

Similar duration-lengthening trends are emerging in the UK as projects shift from frequency-response towards energy and capacity revenues, while the Middle East has contracted multi-hour solar-plus-storage for dispatchable evening output.

Co-located hybrid plants, especially solar-plus-storage, are becoming the default, because sharing a single site and interconnection cuts cost and schedule risk. Batteries increase revenue by capturing curtailed solar and shifting delivery into higher-price hours like the evening peak. Co-location also enables export-limited designs where PV is oversized behind a constrained grid tie and excess energy is stored in the battery and later discharged without breaching the interconnection limit. Such models are common in California and help meet resource adequacy by providing reliable capacity during peak hours.

In Texas, where electricity prices vary widely by location and time, battery storage can monetise this volatility and enhance system reliability by dynamically charging during low-price periods and discharging when prices spike.

“BESS is expected to become a main back-up and balancing tool for data centres, moving beyond brief uninterruptible power supply (UPS) support,” Shiledar said.

“It actively manages power between the grid and IT equipment, protecting systems from grid problems and onsite power limits. Batteries react in milliseconds, so they can handle sudden voltage or frequency issues and provide instant back-up during switchover.”

Batteries can lower costs and work around grid limits by keeping power use within the site’s connection limit, covering short peak loads, cutting demand charges, and smoothing rapid load changes, which helps data centres grow faster where the grid is constrained.

“Energy shifting has become the fulcrum of the battery storage value proposition, recasting batteries from ancillary grid-support tools into system-critical infrastructure,” Shiledar said.

“By absorbing surplus renewable output and redeploying it into periods of higher demand and pricing, batteries bolster reliability, curtailment, relieve network congestion, and reduce reliance on peaking generation.

“As costs continue to decline and projects more effectively monetise stacked revenue streams, supported by government mandates, energy shifting will remain the principal catalyst for battery storage deployment and a cornerstone of high-renewables power systems.”

The report is available here.

Image credit: iStock.com/PhonlamaiPhoto