Compressed Air Energy Storage Market Size Projected to Generate $31,827.7 Mn by 2031

Download Sample   Reports Overview

The Global Compressed Air Energy Storage Market Size is predicted to be valued at $31,827.7 million by 2031, surging from $3,995.4 million in 2021, at a noteworthy CAGR of 23.6%.

Impact Analysis of COVID-19 on the Compressed Air Energy Storage Market

The compressed air energy storage industry had experienced a negative impact during the COVID-19 pandemic. This was majorly owing to travel & import-export restrictions, stay-at-home orders that have led to a temporary halt or suspension of manufacturing and production units. The economic uncertainties caused by the onset of pandemic have led to a delay in the approval process required for setting up compressed air energy storage (CAES) systems. Also, significant government and private company investments in CAES systems was reduced that has affected the compressed air energy storage market demand during the pandemic. Furthermore, apprehension and fear among the people about contracting the COVID-19 virus have led to a shortage of manpower at the operation sites. These factors have negatively impacted the compressed air energy storage market growth during the COVID-19 pandemic.

Global Compressed Air Energy Storage Market Analysis

The tremendous growth of the global compressed air energy storage market post-pandemic can be attributed to the huge potential of CAES systems for efficient energy storage for power generation. The CAES systems can be used for energy storage for small as well as large-scale capacities. Owing to this, the compressed air energy storage industry has potential applications for frequency & voltage control, peak shaving, and load shifting. The compressed air energy storage market size is estimated to grow at a rapid pace as CAES is a sustainable energy storage system that can meet the growing energy demands. In CAES, low-cost electricity if used for storing compressed air in an underground cavern that can generate electricity during peak hours. As a CAES plant is not limited by compression requirements, it can produce electricity 2 to 3 times faster than gas-fired plants. These factors are anticipated to boost the compressed air energy storage market size during the analysis timeframe.

The compressed air energy storage industry faces technological limitations that may hamper the market growth in the upcoming years. For instance, CAES involves high capital costs owing to complicated cooling systems and high self-discharge rates.

Compressed air energy storage systems offer a variety of advantages that lead to enhanced energy savings and better air quality. CAES helps in reducing the load on the electrical grid by enhancing energy storage during peak demand. Hence, during peak energy demand, energy companies can ensure that sufficient energy is available. This reduces the need for alternative energy production technologies and reduces operational overhead. CAES is a sustainable energy storage technology that improves the energy grid stability during peak hours and reduces carbon emission. Also, CAES systems require very low maintenance compared to other energy production methods. This technology can also be used for small-scale energy production. With CAES systems, the compressors need not have to be operational frequently which reduces the compressor wear. This also helps in extending the compressor life by minimizing short cycling. These factors are anticipated to boost the compressed air energy storage market size in the upcoming years.

Global Compressed Air Energy Storage Market, Segmentation

The global compressed air energy storage market is segmented based on method, storage, application, end-use industry, and region.

Method:

The method segment is further classified into diabatic, adiabatic, and isothermal. Among these, the isothermal sub-segment accounted for the dominant market share. In the isothermal compressed air energy storage, the temperature of the air remains constant as the air expansion and heat removal is done in a controlled manner. This is a very effective method that removes heat as soon as it is generated. The isothermal method facilitates real-time extraction of heat, and this method has a practical efficiency of around 80%. The isothermal method is more convenient than diabatic and adiabatic methods as it reduces the storage cost by more than one-seventh of conventional CAES and allows more than double compression.

Storage:

The storage segment is further divided into traditional CAES storage and liquid gas CAES storage. The traditional CAES sub-segment has registered the dominant revenue share in 2021. The growth of traditional CAES storage can be attributed to its high efficiency, reliability, and low cost compared to liquid gas CAES storage. The traditional CAES system simply removes the heat and discards it which lowers the round-trip efficiency. Also, traditional CAES is a promising technique that facilitates the effective storage of excess energy that can meet the energy demand during seasonal variation. These factors are anticipated to positively contribute towards the traditional CAES market growth in the coming years.

Application:

The application sub-segment is majorly divided into energy management, backup and seasonal reserves, and renewable integration. Among these, the energy management sub-segment has acquired a dominant market share in 2021 and is estimated to grow at a significant rate during the forecast period. Compressed air energy storage system is widely used for energy management. This is because in power management, the electricity from public electrical grid or from renewable power sources, such as wind and solar, is used to power the compressor which is used to pump air in the storage container. For large-scale energy management, the pressurized air is stored in underground caverns, and for small scale energy management the compressed air is stored in storage tanks. The use of CAES for energy management reduces the dependence on fossil-fuel-based energy which reduces the environmental impact.

End-use Industry:

The end-use industry sub-segment is majorly divided into power station, distributed energy system, and automotive power. Among these, the power station sub-segment has acquired a dominant market share in 2021 and is estimated to grow at a significant rate during the forecast period. The use of compressed air energy storage in power stations facilitates reliable power generation and transmission and helps in reducing the environmental impact. This is because CAES systems store energy and generate power using renewable energy sources such as wind and solar energy. The demand for energy is increasing across the world and most of the energy is utilized by power stations. Hence, the use of compressed air energy storage at power stations can reduce the operation cost required to power the grid and can lower the costly disruption and power failure issues.

Region:

The compressed air energy storage market for the Asia-Pacific region is projected to grow at the fastest rate during the forecast period. The energy demand and reliable energy storage solutions is increasing rapidly across the countries such as China, Japan, India, and others. Various initiatives are taken by the government for sustainable power generation to reduce the environmental impact. For instance, in October 2022, Australian Renewable Energy Agency (ARENA), has approved a funding of US$ 28.42 million towards the construction and development of Hyrostor’s compressed air energy storage systems. This project will be built in New South Wales which is estimated to start by late 2023. Once the project is built, it will be the largest compressed air energy storage system in the world that can offer eight hours of storage for off-peak and renewable energy. These aspects are anticipated to propel the compressed air energy storage market growth in the Asia-Pacific region.

Key Players in the Global Compressed Air Energy Storage Industry

Some of the leading compressed air energy storage market players are

• Siemens Energy AG
• General Compression Ltd (GCL)
• Hydrostor Inc.
• Bright Energy Storage Technologies
• Pacific Gas and Electric Company
• Apex Compressed Air Energy Storage LLC
• Ridge Energy Storage
• Grid Services LP
• ALACAES
• Storelectric Limited
• LightSail Energy

In January 2023, Hydrostor, the leading developer of CAES systems, and Central Coast Community Energy (3CE) has executed 25-year power purchase agreement in order to achieve California’s objective of carbon-free electricity by 2045.