Global battery storage investment exceeds $20b in 2022

The US, China, and Europe comprised 90% of the total investment.

Investment in battery storage globally has more than doubled in 2022 reaching over $20b, with the US, China and Europe accounting for 90% of the expenditure, according to a report by the International Energy Association (IEA).

The IEA said capital costs for batteries rose for the first time in a decade in 2022 due to several factors such as a tight supply chain for battery metals and the rise in demand.

The investments are concentrated in the three markets because of the “technological complexities of the value chain and the need for supportive policies and market designs.” China has the lowest costs for utility-scale batteries, followed by Europe and the US.

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China’s spending on battery storage tripled in 2022 reaching almost $8b. Notable projects in the sector during the year include the construction of the world’s largest battery storage peak-shaving power station.

The IEA expects battery storage investments in China to reach $14b under favourable economic conduction and strong policy support.

Investments in the US rose more than 50% year-on-year, and are expected to reach $13b in 2023. The country has an “increasingly supportive” environment due to the Inflation Reduction Action

Meanwhile, in Europe, investments for the sector reached $5b but hydro storage remains dominant.