Global Thermal Energy Storage Market

Market Overview

The global thermal energy storage market was valued at USD18.89 billion in 2022 and is projected to reach USD49.72 billion by 2028, exhibiting a CAGR of 9.25% during the forecast period from 2024 to 2028. Thermal energy storage refers to the storage of energy by utilizing various materials that store and release energy based on temperature fluctuations.

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Waste management systems, power plants, and heat pumps all use this technology. Thermal energy storage systems can be used to reduce peak-hour energy demand, which lowers carbon dioxide emissions and lowers end-user energy consumption. In order to harness heat in process industries and guarantee a consistent power supply, even at night, thermal energy storage is widely utilized in thermal power plants and solar power plants. Another strong argument is the rising demand for HVAC thermal energy storage systems and the expanding use of renewable power generation. The need for sophisticated thermal energy storage systems is also expected to be further boosted by growing concerns about greenhouse gas emissions and rising fuel prices.

Key Market Drivers

Demand for energy storage for supplementing ever-increasing solar energy generation

For governments, energy authorities, and utilities around the world, decarbonizing the energy sector and lowering carbon emissions to fight climate change are vital goals. According to IRENA, more than 90% of the required carbon dioxide (CO2) emission reductions by 2050, in accordance with the Paris Climate targets, can be achieved through the faster deployment of renewable energy, electrification, and increased energy efficiency of the electric grid. Global installed capacity for renewable energy rose by 176 GW in 2019, a 7.4% growth rate over 2018. The overall growth in generation was aided by the recovery in the hydropower sector. In 2018, solar energy became the third largest renewable electricity generation source, surpassing bioenergy. We observed significant increases of 28% and 11% in solar and wind generation, respectively. Since 2014, 73% of the growth in renewable energy has come from these two sources combined. Strong federal policy tools, like the Investment Tax Credit for solar power, and growing demand for clean energy in major economies in North America, Europe, and the Asia Pacific region drove solar energy's impressive average annual growth rate of 49% globally. In 2018, hydro, wind, photovoltaic, and biomass energy sources accounted for 26.7% of China's total power generation. By 2020, China hopes to have at least 210 GW of solar power and possibly as much as 270 GW. By 2022, the Indian government also wants to install 175 GW of renewable energy capacity, which includes small hydropower, solar, wind, and biopower. Spain intends to add 157 GW of renewable energy capacity and has increased its renewable energy target to 74% by 2030. The production of concentrated solar power (CSP) rose by an estimated 34% in 2019 and is predicted to keep rising. This expansion will be facilitated by ongoing policy support for CSP initiatives in a number of regions, such as Asia Pacific, North America, and the Middle East and Africa. In CSP plants, thermal energy storage is essential because it allows solar heat to be stored for use in producing electricity during times when sunlight isn't present. In addition to providing benefits like enhanced dependability, better overall efficiency, lower expenses, and fewer carbon dioxide emissions, the system guarantees continuous operations. The market is anticipated to grow as thermal energy storage is integrated into CSP plants.

Rising demand for energy

The market is expanding due to the need for heating and cooling applications in smart infrastructure as well as the increased demand for electricity brought on by increased commercialization and peak-time usage. This expansion is further aided by government policies in both developed and developing countries that support renewable energy technologies. Investments in renewable energy are being made by numerous nations worldwide, which is propelling market expansion in a variety of economies. In addition to generating jobs, investments in wind and solar energy are also lowering emissions and encouraging innovation. Reducing carbon emissions in the energy sector is one of the main objectives of many governments in order to mitigate global climate change. Because of this goal, electric grids are now more energy efficient, which lowers carbon dioxide emissions. For example, by 2022, the Indian government wants to install 175 gigawatts of renewable energy capacity, which includes hydro, solar, wind, and biopower. In a similar vein, the Spanish government intends to increase renewable energy capacity by 157 gigawatts by 2030. Increased overall efficiency, lower operating costs, improved reliability, and lower investment costs are all benefits of using thermal energy storage. Additionally, the market will be driven by the decentralized renewable energy technologies' explosive growth.

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Key Market Challenges

High initial set-up costs varying with technology

High prices of TES systems may restrain industry growth

One of the main obstacles to market expansion has been the substantial capital outlay needed to build TES systems. However, the increased demand for sophisticated storage materials and improvements, as well as standardization in the manufacturing process, have made the technology more competitive. Additionally, the development of CSP plants and the optimistic outlook regarding the reduction of carbon emissions are anticipated to propel market expansion in the upcoming years.

Key Market Trends

Shift towards renewable energy generation is a trend

To meet their carbon reduction targets, many nations are adopting thermal energy storage and shifting to renewable energy sources. Universities, associations, and governments are also making significant investments in R&D to create novel thermal storage media that have little to no negative effects on the environment. In this regard, it is projected that the introduction of cutting-edge technologies like smart sensors, IoT, and AI will greatly improve thermal energy storage efficiency.

Segmental Insights

Application Insights

Over the course of the forecast period, the power generation segment is anticipated to grow significantly. This market will be driven by the growing need for dependable and reasonably priced power supplies in isolated and off-grid locations. The expansion of the power generation sector will also be aided by the execution of numerous government programs designed to encourage the production of electricity from solar power plants. Renewable energy providers can sell any extra power back to the grid under the feed-in tariff scheme, which pays them retail electricity prices for each unit produced.

Storage Material Knowledge

Over the course of the forecast period, molten salt technology is expected to grow significantly. Its high technological efficiency and use in a variety of solar energy projects are responsible for this segment's growth. The heat gathered by solar towers and solar troughs is stored in molten salt. By using this technology, the heat is captured and transformed into superheated steam, which powers steam turbines.

Regional Insights

Europe maintained its lead throughout the forecast period, accounting for the largest share of revenue. The region is characterized by a significant number of thermal energy storage systems used for various applications such as space heating, water heating, district heating and cooling, and power generation. Spain emerges as the key contributor to the regional market growth due to its numerous operational TES projects and the presence of major players like Abengoa Solar. The governments of Europe have developed a model known as the European model, which efficiently retails and distributes energy based on population density in specific regions. Notably, the federal government of Germany heavily invests in advanced research for electrical energy storage, particularly in relation to its use in residential solar panels.

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Recent Developments

• In March 2019, Climate Change Technologies introduced its thermal energy storage, a modular unit capable of accepting various types of electricity - such as solar and wind - and utilizing it to heat and melt silicon within a highly insulated chamber. In May 2019, Vattenfall, a prominent European energy company, partnered with SaltX Technology to commission an industrial-scale pilot for testing nano-coated salt-based energy storage technology, offering a chemical storage solution for long-term thermal energy. Additionally, in May 2019, Azelio unveiled its storage technology, featuring a Stirling engine for dispatchable electricity production. This innovative system enables the reception and storage of electricity generated from a broader range of renewable sources as thermal energy.
• In August 2018, SolarReserve entered into an agreement with the South Australian Government (Australia) to construct a 150 MW solar thermal power station. The facility will utilize molten salt for energy storage and employ parabolic tower systems.
• Additionally, in May 2018, SolarReserve expanded its operations by integrating a 70 MW solar farm with the Port Augusta concentrating solar power tower in South Australia. This expansion included the installation of a molten salt storage facility and the delivery of electricity at a competitive rate of USD 78/MWh.

Key Market Players

• BrightSource Energy Inc.
• Aalborg CSP AS
• Abengoa SA
• Baltimore Aircoil Company
• Burns & McDonnell
• SaltX Technology Holding AB
• Terrafore Technologies LLC
• Trane Technologies PLC
• SR Energy
• Vantaa Energy