Key points:
- Thanks to substantial cost declines and improving technologies, the battery energy storage market is now following the same S-curve trajectory that solar PV has experienced over the past 15 years.
- But growth has not been even. China and the US – specifically the states of California and Texas – account for the vast majority of installations.
- Global utility-scale battery storage capacity has surged 24-fold since 2020, reaching 393.5 GWh as of October 2025.
- Thanks to cost advantages and supportive policy, China comfortably leads the way, accounting for 61% of the global total.
- But other countries are starting to catch up, including Australia, Chile, South Africa and the UK.
Overview
It has been less than a decade since the world’s first “big battery” – the Hornsdale Power Reserve in South Australia – was brought into service. Yet electrochemical storage has already become an integral component of modern, flexible power grids.
Led by lithium-ion chemistries, battery storage installations are exploding in number and size. Thanks to substantial cost declines and improving technologies, the energy storage market now appears to be following the same S-curve trajectory that solar PV has experienced over the past 15 years (see Figure 1).
Fig. 1
But growth has not been even. China and the US – specifically the states of California and Texas – account for the vast majority of installations. That said, a handful of other nations – including Australia, the UK and Chile – are also seeing a surge in deployments, and global project pipelines are expanding fast.
In many cases, batteries are now outcompeting thermal power plants in the market for critical grid services, such as frequency and inertia support and responding to network disturbances. They are also increasingly winning market share from peaker plants – usually gas-fired facilities – during periods of high power demand, such as the early evening.
The battery storage industry has matured fast, and we expect the steep growth curve to remain intact.
Global installations have surged
After crossing the 1 gigawatt-hour (GWh) threshold in 2015, the global battery energy storage market grew steadily for several years as lithium-ion technologies matured and the first large installations proved their worth. Then, from 2020, the market’s growth accelerated substantially as lithium-ion battery pack prices fell closer to the USD 150 per kilowatt-hour (kWh) mark (see Figure 2). Russia’s invasion of Ukraine in 2022, and the subsequent surge in fossil fuel costs, further boosted the competitiveness of renewables and storage technologies.
Grid-scale batteries have also been deployed as transmission assets as network operators grapple with a shortage of available transmission capacity.
Fig. 2
As a result of these and other tailwinds, battery storage deployments have surged in recent years, reaching 393.5 GWh as of October 2025, according to BloombergNEF.1 Momentum is unlikely to slow any time soon as technologies improve further, costs continue to decline, and demand for electricity rises amid the AI boom and electrification of key sectors.
China leads the way
As recently as 2022, China and the US were adding a similar amount of new battery storage capacity each year. However, China has since pulled far ahead of the world’s biggest economy, thanks largely to substantial cost advantages and supportive policies.
The country is comfortably the world leader in battery manufacturing capacity, and robust competition has led to aggressive cost declines. In a large-scale procurement process concluded in late 2024, the average bid price was just USD 66.3/kWh for 16 GWh of battery storage. The market has also been aided by provincial mandates requiring that renewable energy developers include a certain amount of storage capacity alongside their wind and solar projects.
As of October 2025, China has 240.7 GWh of installed battery storage capacity, or 61% of the global total (393.5 GWh). See Figure 3.
Fig. 3
US market
While it has fallen far behind China, the US remains the second-largest market for utility-scale battery storage. California initially led the way, although Texas has also seen rapid growth in deployments in recent years. Other states are also starting to catch up, including Arizona and Nevada.
In California, in particular, batteries are muscling gas-fired generators out of the energy mix, especially during the evening peak demand period. At one point during the evening of 12 October 2025, batteries met 37.2% of the state’s demand, a new record. California’s growing fleet of battery storage facilities charges up during the middle of the day on low-cost solar energy, and injects it back into the grid when demand is high and power prices climb.
As of October 2025, the US had 107.1 GWh of operational battery storage capacity, or 27% of the global total, according to BloombergNEF data.
Battery boom goes global
While the US and China have accounted for the vast majority (88%) of installations to date, other countries are starting to catch up.
Australia’s battery storage capacity has doubled since the end of 2024 to reach 7.7 GWh, and the nation’s pipeline of potential projects is growing fast. According to the Australian Energy Market Operator, 26.1 gigawatts (GW) of grid-scale battery projects are seeking a connection to the country’s main grid, as of September 2025.
A similar trend is underway in the UK, which has 7.3 GWh of installed capacity, another 6.5 GW of battery projects under construction, and over 60 GW of potential projects approved.
A number of developing markets are moving quickly, too.
Chile has 4.6 GWh of installed capacity as of August 2025 and is expected to have almost 5.5 GW of battery storage systems online by the end of 2026.
South Africa had 1.3 GWh in operation at the end of 2024 and a potential project pipeline that includes 13.4 GW of standalone battery storage and 102.6 GW of hybrid facilities2 (renewables plus storage).
Meanwhile, Saudi Arabia is establishing itself as an emerging energy storage hub. State-owned utility the Saudi Electricity Company recently procured two enormous battery storage systems with a combined capacity of 4.9 GWh, at a cost of just USD 73-75/kWh.
Outlook
Now that utility-scale battery storage is economically competitive – both on a standalone basis and when paired with variable renewables to ‘firm’ their output – the surge in installations will likely continue for the foreseeable future.
Rystad Energy sees total global energy storage capacity (across all technologies) increasing ninefold between 2024 and 2040 to surpass 4 terawatts (TW), with batteries driving the growth.
BloombergNEF anticipates 247 GWh of new energy storage capacity globally in 2025, excluding pumped hydro, and says annual additions will likely climb to around 972 GWh by 2035 – implying a fourfold increase in yearly deployments over the next decade.
While China and the US were early pioneers, a growing list of countries are seeking to ramp up their investments in large-scale battery facilities.
Gigawatt-hour projects have already been commissioned or are under construction in Australia, Canada, Chile, the Netherlands, Saudi Arabia, South Africa, and the UK – indicating that the technology is moving ever deeper into new markets as it matures.
