WTW Renewable Energy Market Review 2024
Battery energy storage systems (BESS) are playing an increasingly integral role in the transition to a lower-carbon global economy. Here, we examine the state of the market for BESS this year and beyond.
BESS enables the storage of excess variable energy generation, enhancing the grid’s capacity and reliability. BESS are able to store excess energy produced in periods of low demand, which can be discharged into the grid during periods of high demand. BESS operators can therefore receive financial returns for meeting surging energy needs.
The high investment in the BESS industry has brought with it great opportunities and challenges while providing added security to grid infrastructure.
Investment in BESS is predicted to continually grow over the course of the 2020s. McKinsey & Company analysis shows more than $5 billion was invested in BESS in 2022, an almost threefold increase from the previous year. Looking ahead, it’s expected the global BESS market will reach $120-$150 billion by 2030.
The increasing level of investment in BESS has prompted competition between all major integrators seeking to capitalize on the opportunity to expand market share and capitalize on demand. This has resulted in pricing reductions from all major BESS system integrators.
With the reduction in costs, BESS project operators would be prudent to ensure the replacement costs of their assets are accurately valued for 2024 and declare updated values to their insurers. BESS projects operating for several years may have lower replacements costs in 2024 than they had earlier. If you are declaring higher replacement values to insurers, you could face over insuring the assets without additional coverage and higher derived premiums.
The acceleration of investment and construction of BESS has led to bottlenecks along the supply chain. For example, the U.K.’s National Grid has experienced a large number of delays, some in excess of a year, on sites connecting to the grid.
To read more, please download the full article, below.
| Title | File Type | File Size |
|---|---|---|
| The developing BESS market 2024 | .5 MB |
