The thermal energy storage market is predicted to grow at a CAGR of 12.38 % to reach a market size worth US$8.466 million by 2025. This market was valued at US$4.204 million in 2019. Thermoelectric storage (TES), also known as heat storage, is a non-chemical method of transferring power that is simple and highly efficient. Heat storage, also known as thermoelectric storage (TES), is a non-chemical method of transferring power that is simple and highly efficient to use. This is one of the most eco-friendly ways to save energy. Thermoelectricity stores thermal energy in either a hot or a cold state for later use. Carbon dioxide emissions are reduced, end-user energy consumption is reduced, and peak load demand is decreased with thermal energy storage systems. Based on the type of materials used in manufacturing, the efficiency and effectiveness of the system are determined. Other energy storage applications include solar power plants, thermal power plants, combined heat and power plants, and process industries. In addition to the increased use of renewable energy sources, the market is driven by the need for a continuously available supply.
The high demand for thermal energy storage in HVAC will also contribute to district heating and cooling gaining substantial traction. There is a lack of awareness concerning thermal energy storage technologies and the high cost associated with using these systems, along with the requirement for highly skilled technicians to handle maintenance, which is likely to constrain the market during the forecast period. The adoption of renewable technologies is predicted to increase in the near future, presenting numerous opportunities for players in the market.
Growing Need for Energy Storage to Supplement Ever-Increasing Solar Power Output
In order to combat global climate change, governments, energy authorities, and utilities are striving toward decarbonization of the energy sector and reduction of carbon emissions. Over 90% of the energy-related carbon dioxide (CO2) emission reductions required by 2050 can be achieved through accelerated deployment of renewables, electrification, and energy efficiency of the electric grid, according to IRENA. IRENA estimates that renewable energy capacity worldwide was 176 GW higher in 2019 than in 2018-an an increase of 7.4%. The hydropower sector recovered to its long-term growth trend in 2019. Solar continues to be a strong source of renewable electricity generation; in 2018, solar surpassed bioenergy as the third-largest source. There was an increase of 28 percent and 11 percent in the wind and solar generation in 2018. Across North America, Europe, and the Asia Pacific region, solar energy has experienced 49% annual growth due to the strong federal government policies encouraging the adoption of the energy, Solar Investment Tax Credit, and increasing demand for clean energy from both the public and private sectors. In 2018, China generated 1,870 TWh of electricity from renewable sources (26.7% of the country's total), according to Renewable Energy World. The Indian government has set a goal of installing 175 GW of renewable energy capacity by 2022, including 60 GW of wind energy, 10 GW of bioenergy, 100 GW of solar energy, and 5 GW of small hydroelectricity. Additionally, the Spanish government aims to add 157 GW of renewable energy capacity by 2030 and raised its renewable energy target to 74% by that date. Based on the IEA, Concentrated Solar Power or CSP generated an estimated 34% more power in 2019 and is projected to grow even more in future years. Continual policy support can be gained by working on CSP projects across the Middle East and Africa, Asia Pacific, and North America regions. By cooling or heating thermal energy storage mediums such as sand, rocks, water, and molten salt, solar thermal energy can be stored to be used as a heat source and a cooling source later.
Solar heat can be stored and used to generate electricity when there isn't sunlight, which is why thermal energy storage is crucial for concentrating solar power. It allows CSP plants to operate continuously even when there is no sunlight. In addition to the thermocline system, there are also two-tank indirect and two-tank direct thermal storage systems. Thermal energy storage in CSP plants has many advantages, including increased reliability, reduced investment and operating costs, and economical operation. In addition, it reduces carbon dioxide emissions. This will drive the market growth for thermal energy storage.
Competition From Battery Storage and Pumped Storage Might Hinder the Market Growth
Buildings can improve peak electricity demand by storing thermal energy, while batteries can provide backup power to lighting, elevators, and computers. Energy costs for air conditioning account for a third of annual energy costs in summer. It would be inefficient and expensive to store energy in batteries, then transform it again for instantaneous cooling. The entire building load, on the other hand, cannot be backed up by just thermal storage. Among utility-scale storage methods, pumped-storage hydropower (PSH) is the most popular by far in the USA, accounting for 95% of all energy storage. In the last 10 years, pumped-storage hydropower has increased by 2 GW, according to the US Department of Energy (DOE). While thermal energy storage can be more affordable in comparison with battery storage and pumped-hydro storage, it is less preferred due to its lower efficiency at economies of scale. Consequently, these substitutes pose a threat to the market's growth.
Renewable energy technologies have already been challenged in several markets by financing, policy uncertainties, and grid integration since the start of 2020, and these challenges have been exacerbated by COVID-19. As a result of the unprecedented global COVID-19 crisis, the amount of new renewable power installations worldwide is expected to drop. Compared with 2019, 2020 is expected to see a decline of 13% in net additions of renewable electricity capacity as per IEA estimates. There have been delays in construction due to disruptions in supply chains, lockdowns across major economies, and social-discriminatory policies for workers, along with subsequent financial difficulties.