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Wood Mackenzie sees 640% surge in global energy storage by 2033

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By Colin Hay - 
Wood Mackenzie energy storage report

Leading international research firm Wood Mackenzie has forecast that global energy storage is set to grow 640% over the next decade.

The company says that with global demand for renewables hitting unprecedented levels, solar and wind energy uptake is expected to grow dramatically between 2024 and 2033 as developers bring more than 5.4 terawatts (TW) of new solar and wind capacity online.

This would increase the cumulative global total to 8TW as the world moves to electrify economies and meet decarbonisation targets.

Fast-growing market

According to Wood Mackenzie’s latest analysis, energy storage capacity will increase to nearly 1TW over the same period.

WoodMac vice president of global renewables research Luke Lewandowski said this will make energy storage one of the fastest-growing markets in the power industry as renewable integration challenges rise.

“Global demand for renewables has reached unprecedented levels, driven by country-level policy targets, technology innovation and concerns over energy security,” he said.

“Integrated power technology solutions will continue to evolve, evidenced by a significant increase in storage-paired capacity growth, despite inflation, grid constraints and permitting challenges.”

Annual capacity increase

Wood Mackenzie also sees annual capacity increasing from approximately 500 gigawatts (GW) of new solar and wind capacity installed in 2023 to an annual average of 560GW over the 10-year outlook.

China will continue to dominate solar, energy storage and wind uptake, with 3.5TW to be connected to the grid during the forecast period.

“Solar PV leads the deployment race, accounting for 59% of global capacity due to come online between 2024 and 2033,” Mr Lewandowski said.

“Energy storage will have the most balanced geographic footprint over the outlook, due in part to its important role in helping to make renewable power available.”

Solar deployment

Wood Mackenzie’s principal analyst for distributed solar PV Juan Monge said ultra-low module prices intensified the rate of solar deployments last year in Europe and China and would continue to do so in the near term.

“But grid constraints and a return to lower power prices and subsequently lower capture rates will impact markets and other regions,” he warned.

“Ultimately, maximising solar PV capacity – and wind power capacity for that matter – in the next ten years will depend on additional technology developments: from expanding grid infrastructure to incentivising flexibility solutions, transportation and heating electrification.”

Surge in installations

Wood Mackenzie noted that drastic drops in Chinese module prices and tight deadlines to interconnect tendered projects last year triggered 150% annual growth for installations across all solar PV segments.

The report suggested that year-on-year increases in annual installed capacity will continue until 2026, when the company forecasts a two-year slowdown due to an expected pause in development activity before the next round of planned procurement drives higher deployment.