Energy Storage as a Service Market Size Worth $2.7 Billion by 2028

The global energy storage as a service market (ESaaS) size is expected to reach $2.7 billion by 2028, according to a new report by Grand View Research. It is expected to expand at a CAGR of 10.7% from 2021 to 2028. The report says the global market is predominantly driven by the rising energy consumption and increasing demand for power management in the industrial and residential sectors. Moreover, the convenience and cost-effectiveness offered by the energy storage services are attracting consumers across the globe.

With the increasing requirements of efficient grid management, constant load management, and continuous power supply, the market is expected to witness significant growth over the forecast period. Furthermore, clean and renewable energy is an affordable alternative to fossil fuel-based electricity. Its use can help curb the overdependence on fossil fuels, reduce greenhouse gas emissions and subsequently air pollution, and diversify the power supply.

The pumped hydro technology segment dominated the market and accounted for more than 90.0% of the total market share, in terms of storage volume, in 2020. The segment is expected to be driven by ongoing investments towards upgrading energy infrastructure and enhancing on-grid capacity in Asia Pacific and North America. Favorable compliance standards coupled with surging power consumption in China and the U.S. are expected to drive pumped hydro storage (PHS) demand over the long term.

The electrochemical storage segment is expected to witness a CAGR of over 10.0% over the forecast period. Countries such as the U.K., the U.S., and India are expected to drive the electrochemical storage demand over the next few years. Countries in Middle East and Africa and Central and South America are expected to drive thermal storage demand over the long term.

Key Insights & Findings:

• By service, the customer energy management services segment held the largest revenue share of over 30.0% in 2020. ESaaS model is gaining high popularity in the industrial, commercial, and residential sectors compared to utility and energy supplying companies. It is being used in microgrid systems.
• The ancillary services segment is anticipated to grow at the fastest rate during the forecast period. Ancillary services are expected to decrease the dependency on fossil fuel generators and switch to renewable and battery energy storage for services including voltage support, black start, and frequency regulation.
• The utility end-user segment is expected to register the highest growth rate during the forecast period. Decreasing dependency on conventional fossil fuel generators and increasing focus on sustainability are among the major factors fueling the segment growth.
• Asia Pacific is expected to emerge as the fastest-growing regional market over the forecast period owing to the presence of various untapped markets, coupled with the rising energy consumption. China is the largest market for energy storage as a service in Asia Pacific. This is due to the increasing industrialization in the region, high consumption of energy, and growing awareness of renewable energy.
• Growing industrialization in emerging countries such as India, Brazil, and China is creating significant energy demand, which, in turn, is expected to drive the market. ESaaS model offers various services, including ancillary services and energy management services, which help in the regular supply of electricity, prevent blackouts, and reduce electricity bills.
• In 2020, the market witnessed a decline in growth owing to the outbreak of the Coronavirus pandemic. Lockdown across nations and travel restrictions affected the market. Various industries and commercial complexes were closed, which resulted in a decline in service demand in 2020.