Development of Large-Scale Battery Energy Storage Systems in the Global Power Industry

The article analyzes the development of large-scale battery energy storage systems (BESS) as a new source of system flexibility in the global power sector. It assesses the scale of deployment of these technologies across countries and examines the advantages and disadvantages of BESS compared to other conventional and emerging flexibility resources. The study identifies and analyzes three key drivers of BESS adoption: first, the increasing share of variable renewable energy (VRE) in electricity generation; second, the significant decline in the production costs and prices of lithium-ion batteries; and third, targeted government policies in a number of countries aimed at supporting these technologies, including electricity market reforms, tax incentives and other non-market mechanisms. The findings demonstrate that BESS have already become cost-competitive in countries with high penetration of solar and wind power, provided that the regulatory environment and electricity market structures do not hinder their proper integration. The article highlights that in the United States, the United Kingdom and Ireland, targeted electricity market reforms have significantly improved the competitiveness of BESS–both colocated with solar and wind power plants and as standalone systems – thus reducing their dependence on government support and enabling large-scale deployment. The ongoing expansion of lithium-ion BESS for intraday energy storage is expected to further strengthen their position due to the commission of new manufacturing capacities, optimization of supply chains, and development of recycling and reusing sectors. The article also addresses the challenge of long-duration energy storage and the author concludes that existing technologies are not yet capable of delivering cost-effective seasonal storage. Achieving full decarbonization of the electricity sector will therefore require major technological breakthroughs in this area. At the same time, the expected growth of large-scale lithium-ion BESS is unlikely to impede the search for alternative storage technologies nor the development of other sources of energy flexibility.