Investing.com — Energy storage is expected to grow 34-fold by 2050, according to UBS.
The current capacity of approximately 270 gigawatts (GW) is expected to increase to more than 9,000 GW to meet the demands of an energy mix increasingly dominated by renewables. By 2030, energy storage capacity is expected to increase eight-fold to over 2,000 GW.
Expanding energy storage is considered a critical component to addressing the intermittent nature of renewable energy sources such as solar and wind. The UBS analysis aligns with a broader consensus among several reports that forecast substantial growth in energy storage through 2030 and beyond.
Notably, the International Energy Agency’s (IEA) 2024 report indicated a significant upward revision to renewable capacity forecasts for 2050, including a 30% increase in solar capacity over the 2023 report and an increase eleven times compared to the 2015 report.
“We view this as a sign that the energy storage requirement has been underestimated and we may see further upward revisions,” UBS analysts said in a note.
The bank also notes the changing dynamics of energy storage alongside renewable assets, with estimates suggesting that storage capacity should account for around 20% of total renewable capacity.
This change is supported by previous forecasts from the UBS China Utilities team, which projected an increase in the share of storage to renewable assets from 10% in 2020 to 20-30% in 2030.
The report explores a variety of energy storage technologies that could contribute to this growth, assessing their advantages, disadvantages and commercial viability.
“In our opinion, the types of storage implemented are likely to be different between regions, including due to these factors,” the analysts said.
While pumped hydroelectricity currently makes up the majority of energy storage and is not expected to grow significantly due to geographical limitations, battery storage systems are expected to see marked growth, notes UBS.
This growth is attributed 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 have a wide range of sizes (from residential to utility), are modular and can be placed wherever needed,” the UBS analysts said.
However, the substantial expansion needed in energy storage comes with challenges, particularly the limitations of certain electrochemical batteries. These include dependence on critical raw materials, geopolitical risks, water-related production issues, and concerns about the shelf life, safety, and economics of storage lasting more than four hours.
Analysts suggest that “other technologies could emerge as disruptors,” such as gravitational, compressed air, compressed CO2 and liquid air storage, along with alternative battery types such as sodium-ion, iron-air, solid state. solid and flowing.