- Global battery storage capacity grew by about 40% in 2025, reaching a record 108 GW of new installations.
- Australia, Saudi Arabia and Chile emerged as fast growing markets, while China remained the world’s largest battery storage market.
- Falling costs and faster deployment are positioning battery storage as a critical source of grid flexibility and renewable energy integration.
Global battery storage is entering a new phase of growth as falling technology costs and increasing demand for flexible electricity systems drive record deployment across established and emerging markets.
According to the latest industry data, global battery storage capacity additions reached 108 GW in 2025, an increase of around 40% compared with 2024. This exceeded the historical record for annual gas fired power capacity additions, highlighting the rapid pace at which battery storage is becoming a central part of modern electricity systems.
Utility scale projects accounted for about 87 GW, or roughly four fifths of new installations, while behind the meter battery systems also expanded rapidly in markets supported by high electricity prices and favourable policy frameworks.
China remained the world’s largest battery storage market, adding more than 63 GW during 2025. The United States followed with 19 GW, representing year on year growth of around 60%. Europe installed approximately 6.2 GW, with utility scale projects accounting for the majority of new capacity.
Several emerging markets also recorded exceptional growth. Australia increased battery storage installations to almost 8 GW, nearly nine times higher than the previous year, supported by federal and state incentive programmes. Saudi Arabia drove battery deployment across the Middle East, where annual additions exceeded 3 GW as the country expanded its pipeline of large utility scale projects to support renewable energy integration. Chile added close to 1 GW of battery storage to capture surplus solar generation and supply electricity during periods of peak demand.
Battery storage is also becoming a larger part of national electricity systems. Batteries now account for around 18% of Australia’s installed dispatchable generation capacity, compared with 7% in China, 5% in the United States and 4% across Europe.
Rapid cost reductions continue to underpin this growth. Battery costs have fallen by more than 90% since 2010, driven by manufacturing scale, technological innovation and increased competition. As a result, battery storage has evolved from providing mainly grid balancing services to becoming a critical technology for energy shifting, allowing excess renewable electricity generated during the day to be stored and supplied during periods of higher demand.
Energy shifting now dominates the battery storage market. The share of new projects focused on this application has increased from around 40% in 2015 to more than 90% in 2025. At the same time, battery systems continue to provide essential grid services such as frequency regulation, congestion management and rapid response balancing, allowing developers to capture multiple revenue streams from a single project.
Project duration is also increasing as electricity systems require longer periods of storage. The average utility scale battery commissioned during 2025 provided approximately three hours of storage, compared with about two hours in 2023, while a growing number of projects now offer four hours or more.
Battery storage is also proving attractive because of its relatively short delivery timeline. Utility scale projects typically require around 275 days for construction, with total development and commissioning generally completed within two years in many markets. This is considerably faster than gas fired generation, pumped hydro storage or nuclear power, giving batteries an important advantage where new flexible capacity is urgently required.
As deployment accelerates, batteries are taking on a much larger operational role within electricity networks. In California, battery capacity has grown from less than 1 GW in 2019 to more than 17 GW today. On 29 March 2026, battery systems supplied more than 40% of the state’s evening electricity demand, while their contribution to hourly grid balancing increased from less than 1% five years ago to more than 60% during the first quarter of 2026.
Similar trends are emerging elsewhere. Batteries now contribute more than 40% of hourly system balancing in parts of Texas, while South Australia and Great Britain are increasingly relying on battery storage to manage electricity demand and supply in systems with high levels of renewable energy.
Despite the strong outlook, regulatory uncertainty, lengthy permitting processes and delays in grid connections remain significant barriers to further growth. Industry analysts say governments and regulators will need to modernise market rules to fully recognise the range of services batteries provide, while creating investment signals that support continued deployment.
With battery costs continuing to decline and renewable energy capacity expanding worldwide, battery storage is expected to play an increasingly important role in delivering secure, flexible and low carbon electricity systems.
The report is based on the latest battery storage market analysis published by the International Energy Agency (IEA)
Author: Bryan Groenendaal
