Thermal Energy Storage Market Size and Share Analysis by Technology (Sensible Heat Storage, Latent Heat Storage, Thermochemical Storage), Storage Material (Water, Molten Salt, Phase Change Materials), Application (Power Generation, District Heating & Cooling, Process Heating & Cooling), End User (Residential, Commercial, Industrial) - Global Industry Revenue Estimation and Demand Forecast to 2030

Market Overview

The thermal energy storage market is set to generate an estimated USD 1,559.8 million by the end of 2023. Further, during the forecast period of 2024–2030, it will grow at a CAGR of 6.5%, to reach USD 2,391.6 million in 2030. This can be ascribed to the increasing demand for electricity, rapid construction of green buildings, and surging need to reduce carbon emissions.

This technology helps in storing cold or heat energy, to be later used for various purposes. There are several ways to store thermal energy, including changing how heat is collected or released and performing chemical reactions that make use of a material's unique characteristics. Common techniques include the storage of ice and cooled water, phase-change materials, latent and sensible heat (types of heat transfer), and thermochemical conversion. One of the biggest advantages of this technology is that it helps in increasing the load flexibility of the electricity system as a whole.

Shift toward Green Buildings Is Key Driver

As per the UNEP, in 2021, the building and construction sector had an approximately 37% share of the energy-related CO2 emissions and over 34% share in the global energy demand. One-fifth of the energy demand is for thermal loads, including water heating, refrigeration, and space heating and cooling. Hence, as per the UNEP, building energy efficiency investments have increased to USD 237 billion in 2021, rising by 16% from 2020 levels.

Most of these investments have been in green buildings, which are LEED-certified and designed, constructed, and operated in a way that reduces their carbon footprint and helps sustain the ecosystem. TES is used in buildings to power HVAC systems, to lower carbon emissions and meet energy efficiency goals.

High Electricity Demand at Peak Times Is another Key Driver

As per Statista, the total electricity consumption of the world in 2022 was over 25,530 Terawatt-hours.

The rapid advancement in electronic & electrical appliances, industrialization, and urbanization are the key factors contributing to the increasing demand for electricity. The demand rises disproportionately during the peak times of day or during peak seasons. For example, more electricity than usual is required for air conditioning and refrigeration in summers and for heating in winters.

Storage systems help in balancing the supply and demand during peak times. Using different technologies, TES can integrate wind, solar, and other irregular sources and waste industrial heat or seawater for cooling or heating purposes.

The surplus electricity is stored as thermal energy during off-peak hours and converted back to electricity when demand peaks. Apart from balancing the demand and supply, while reducing peak demand load, it helps in grid stabilization and cost-savings as these systems store and release energy with minimal losses.

Rising Adoption of Thermal Energy Storage Systems in Renewable Energy Installations

The energy industry has been experiencing extensive R&D and high investments for almost two decades, due to the world’s shift toward renewable energy sources. With resources such as solar, wind, and tide, energy generation is sometimes irregular; thus, the demand of cities cannot be always sufficiently met. Moreover, to completely shift from fossil fuels or traditional energy generation, a demand and supply balance is required in the realm of clean energy.

The usage of storage systems for capturing renewable electricity, waste heat, or surplus heat could help in substituting fossil fuels for energy generation, in turn, leading to reduced carbon emissions. For example, Celsius sources waste heat directly from waste incineration plants and sewage systems in Germany and from ventilation shafts and exhausts in London and stores it in large-scale systems for future usage.

Enhancing TES Efficiency with Technological Developments

With the realization of the long-term benefits of storing electrical power in the form of heat, the associated technologies are being advanced to make them more efficient and rapidly responsive.

For instance, Energy Dome, an Italian company, uses CO2 for long-term solar power storage; the technology is also called a CO2 battery. Similarly, MGA Thermal, an Australian company, uses a different type of material, i.e., miscibility gap alloys, for creating shoebox-sized devices for energy storage.

Moreover, in March 2023, Calgren Renewable Fuels and Rondo Energy operationalized a 2-MWh Rondo Heat Battery (RHB) at Calgren's Pixley, California, facility. The device harvests sporadic renewable energy, holds it in brick materials at extremely high temperatures, and provides constant industrial heat when needed.

Additionally, dedicated software is being designed to help in managing and analyzing the overall thermal ESS and making it more flexible and efficient. This is highly useful for food-related companies, hotels, and other entities that need superior cooling systems.

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North America Has Largest Market Share

North America dominates the market for thermal energy storage systems owing to the already-widespread usage of energy storage systems in the region. Buildings consume 74% of the electricity and 39% of the primary energy in the U.S.; hence, they need storage systems to continuously meet their own demand. The demand for concentrated solar power facilities is comparatively higher than for other contemporary technologies. Therefore, with more CSP plants being established, thermal storage systems would have multiple potential opportunities.

Additionally, it is a highly developed country with a better understanding of new technologies than emerging economies. Moreover, it is focusing on green buildings and, therefore, witnessing a high demand for HVAC systems and efficient power backup technology. It is also rapidly increasing its renewable energy installed capacity, for which storage systems are vital on account of their sporadic electricity output.

APAC Is Fast-Emerging Market

The APAC thermal energy storage market will grow at a CAGR of 7.2% in the forecast period. As per the World Bank, the Asian population is around 4.5 billion. Along with this, the high energy demand in the residential category, high investments for the progress of sustainable energy technologies, and initiatives to encourage the adoption of eco-friendly cooling systems are the primary drivers for the market. China is the largest market in the region as it has a substantial industrial base, which raises the need for energy. As per reports, it has planned to double its energy storage capacity by 2025.

Moreover, the industry in India is expanding quickly as it is investing heavily in solar power. The government has launched many programs to increase the generation of renewable energy over the past 20 years. Resultingly, India's installed renewable energy capacity increased by around 97%, from 76.37 GW in 2014 to 150.54 GW in 2021, according to the Ministry of New and Renewable Energy of India. And, its goal till 2030 is to expand renewable energy installed capacity to 500 GW.

District Heating and Cooling (DHC) Is Significant Application

In the application segment, district heating and cooling (DHC) holds a significant share. It is a potential solution for the integration of renewable energy and the reduction of CO2 emissions, along with TES. Thus, it is crucial that these two technologies be developed further and integrated with each other more efficiently and effortlessly. DHC can use renewable energy with the help of TES, and some benefits of this integration are higher energy efficiency and security. DHC and TES, along with other technologies, such as heat pumps and hybrid systems, could be important enablers for completely decarbonizing the heating and cooling industry by 2050.

Molten Salt Category is Fastest Growing

The molten salt category is the fastest growing market, under segmentation by storage material, due to the rising need for power generation worldwide. The key advantages of molten salt storage for this application are its high flexibility, affordability, and long storage duration.

Solar energy is stored and used overnight to produce dispatchable energy; hence, molten salts have become a popular choice as a thermal fluid. Solar technologies have the same drawback as most renewable technologies, i.e., intermittency due to weather variability. However, using molten salts for heat transfer improves electricity generation and, more importantly, offers the capacity to dispatch energy as needed, without the usage of natural gas.

The phase change materials category is also significant, because of the capacity of these materials to store a lot of energy. They have heat of fusion, and as they transition from the solid to liquid state or the other way around, they release and absorb energy. They offer various benefits, such as high latent heat, thermal stability, predictable phase change temperatures, and high energy density. Additionally, these materials are eco-friendly, i.e., non-corrosive, and non-toxic. Due to these reasons, they are used in building heating and cooling, solar energy supplementation, waste heat recovery, and many other applications.

Sensible Heat Storage Is Largest Category in Technology Segment

Sensible heat storage holds the biggest market share, based on technology, due to its broad application in residential settings and the rising demand for solar energy storage systems. Additionally, the availability of reversible charging and discharging capabilities will promote its acceptance amidst the growing environmental and sustainability concerns.

This technology stores and releases energy without changing the phase of the material, which helps in simplifying the design of the system and minimizes maintenance requirements. This is why it is widely adopted in CSP plants.

The utilization of the latent heat storage technology is also growing, as it increases the energy content of the storage medium by heating and cooling it, while also changing the phase. These systems have a high energy density, as the temperature change required is minimal. Additionally, they can maintain a constant temperature, are highly durable, and have a long lifecycle.

Key Players in Thermal Energy Storage Market

• Abengoa
• Evapco Inc.
• Baltimore Aircoil Company
• Caldwell Tanks
• Dunham-Bush Holding Bhd.
• Steffes LLC
• Goss Engineering
• FAFCO Inc.
• DC Pro Engineering LLC

Market Size Breakdown by Segment

The report analyzes the impact of the major drivers and restraints on the thermal energy market, to offer accurate market estimations for 2017–2030.

Based on Technology

• Sensible Heat Storage
• Latent Heat Storage
• Thermochemical Storage

Based on Storage Material

• Water
• Molten Salt
• Phase Change Materials (PCM)

Based on Application

• Power Generation
• District Heating & Cooling
• Process Heating & Cooling

Based on End User

• Residential
• Commercial
• Industrial

Geographical Analysis

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • U.K.
  • France
  • Italy
  • Spain
• Asia-Pacific
  • Japan
  • China
  • India
  • South Korea
  • Australia
• Latin America
  • Brazil
  • Mexico
• Middle East and Africa
  • Saudi Arabia
  • South Africa
  • U.A.E.