Ancillary Services for Battery Energy Storage Systems Market Research Report Information by Type (Frequency Regulation (and Balancing), Congestion relief, Voltage support, Power smoothing, Peak shaving, Backup Power, Solar Plus Storage , Grid Reliability & Microgrid Capability, Others) By Battery Energy Storage System Type (Lead acid, Lithium-ion, Flow batteries, Nickel-based batteries, Sodium-Sulphur and Zinc-Bromide) By End-Use (Residential, Commercial, Industrial and Utilities), and By Region -Global Forecast to 2032

Global Ancillary Services for Battery Energy Storage Systems Market Overview

Ancillary Services for Battery Energy Storage Systems Market Size was valued at 1,597.0 USD Million in 2023. The Ancillary Services for Battery Energy Storage Systems Market industry is projected to grow from USD 1,763.9 USD Million in 2024 to USD 5,258.7 Million by 2032, exhibiting a compound annual growth rate (CAGR) of 14.63% during the forecast period (2024 - 2032). 

Ancillary services for battery energy storage systems encompass a range of supportive functions beyond energy storage, such as frequency regulation, congestion relief, voltage support, power smoothing, and peak shaving.  These services enhance grid stability and reliability by adjusting power output rapidly to meet demand fluctuations and maintain system balance. Ancillary services play a vital role in integrating renewable energy sources and managing grid variability effectively. The market has been segmented based on type, battery energy storage system type, end use and region.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Ancillary Services for Battery Energy Storage Systems Market Trends

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  An Increasing Penetration of Renewable Energy Sources Like Solar & Wind Power

  
  

In previous times, fossil fuel was considered an important source of energy. In industries fossil fuel was being used in huge amounts. The fossil fuel was causing the change in climate and was also affecting the health. Also, there was an increase in greenhouse emission, and due to which there was an increase in pollution. To overcome the problem being faced by the people, there was an increase in the focus on renewable sources for energy. People were prioritizing the renewable source, because it was abundant and also was a good source of energy.

According to the Energy information Administration, wind and solar energy will rise significantly in U.S. power generation for the next two years. Due to the rise or increase in the solar projects the U.S. solar power generation will grow 75% from 163 billion kilowatt-hours (kWh) in 2024 to 286 billion kWh in 2025. Furthermore, due to the focus on the usage of renewable sources, the usage of wind for the energy is expected to rise, Due to the high demand of energy wind energy and will grow 11% from 430 billion kWh in 2024 to 476 billion kWh in 2025. In 2024, the U.S. electric power sector produced 4,017 billion kilowatt-hours (kWh) of electric power. 

Renewable sources—biomass, geothermal wind, solar, hydro accounted or projected for 22% of generation, or 874 billion kWh, last year. Annual renewable power generation surpassed nuclear generation for the first time in 2021 and coal generation for the first time in 2023. In contrast to growing generation from renewables, they forecast that coal power generation will decline 18% from 665 billion kWh in 2024 to 548 billion kWh in 2025. It is forecasted that the natural gas will continue to be the largest source of U.S. electricity generation, with about 1,700 billion kWh of annual generation in 2024 and 2025, similar to last year. 

And the nuclear power generation will stay relatively flat, rising from 776 billion kWh in 2024 to 797 billion kWh in 2025. New installations of generating capacity support the increase in the renewable generation forecast. Wind and solar developers often bring their projects on line at the end of the calendar year. So, the new capacity tends to affect generation growth trends for the following year. 

Solar is the fastest-growing renewable source because of the larger capacity additions and favorable tax credits policies. Planned solar projects increase solar capacity operated by the electric power sector 38% from 95 gigawatts (GW) at the end of 2024 to 131 GW by the end of 2024. It is expected that the wind capacity to stay relatively flat at 156 GW by the end of 2024, compared with 149 GW in December 2024.

Advancement of battery technology

Innovations in battery technology for renewable energy storage is helping in the rise in setting up or in deployment of intermittent renewable energy sources. Efficient energy storage solutions are required so as to store and then later distribute the excess energy when required to carry on the work. There are lot of advancements that have occurred for battery technologies. 

These innovations are in progress because the focus of the manufacturers is to improve energy density, cycle life, safety, and scalability, and most important is to bring down the price, and make it easily affordable to the people. At present Lithium-ion batteries are gaining attention or is being focused due to their high energy density and fast charging capabilities. The innovation is not restricted to the lithium-ion battery, but also is going in flow batteries, they are utilizing liquid electrolytes in external tanks, and offering scalability and longer-duration storage options.

In lithium-ion (li-ion) batteries, energy storage and release are provided by the movement of lithium ions from the positive to the negative electrode back and forth via the electrolyte. In this technology, the positive electrode acts as the initial lithium source and the negative electrode as the host for lithium. Several chemistries are gathered under the name of li-ion batteries, as the result of decades of selection and optimization close to perfection of positive and negative active materials. Litigated metal oxides or phosphates are the most common material used as present positive materials. Graphite, but also graphite/silicon or litigated titanium oxides are used as negative materials.

Lead-acid batteries can be designed to be high power and are inexpensive, safe, recyclable, and reliable. However, low specific energy, poor cold-temperature performance, and short calendar and lifecycle impede their use. Advanced high-power lead-acid batteries are being developed, but these batteries are only used in commercially available electric-drive vehicles for ancillary loads. They are also used for stop-start functionality in internal combustion engine vehicles to eliminate idling during stops and reduce fuel consumption. 

The usage of nickel-based batteries in large-scale energy storage is rising because it can be used in all the temperatures, this adds plus point for the nickel-based batteries. Nickel-Cadmium (NiCd) is the most common type of nickel-based battery technology, and it is mostly used or preferred for off-grid installation as they provide a reliable backup system and don’t require regular maintenance (provide the good result at the low cost). 

Flow batteries are comparatively new to the battery storage market. In recent times they are becoming a strong competitor to Li ion batteries in energy storage domain. They are rechargeable batteries in which electrolyte flows through one or more electrochemical cells from one or more tanks. In these batteries one can easily increase the energy storage capacity by increasing the quantity of electrolyte stored in the tanks.

Technological Advancements and Growing Demand for Lithium-Ion Battery Energy Storage Systems

The advancement or modernization of technology and the increasing demand for lithium-ion battery energy storage systems (BESS) present or creates opportunity for growth across various sectors. The advanced or modernization shift because of various factors, the need for sustainable energy solutions, introduction of renewable energy sources for the energy, has helped in changing the preference for the derivation of the energy sources. 

In the present situation, energy is very much important for the comfort living and for the living, as the energy help in the running of factories, and providing the desired output and help in earning the revenue, which will help in the country’ growth and progress. Due to the shift in the choice and the increasing use of battery energy storage system the demand for the electric vehicle is also high. Due to the inclination for the electric vehicle, the demand for fossil fuel has reduced, which has help in [protecting the environment and human health. The pollution is also being reduced to the use of renewable sources, which are abundant and help in making the cleaner environment.

The reason for the rise in lithium-ion battery demand is the global push or the shift towards renewable energy integration. The important sources of renewable energy sources are solar and wind. Renewable energies are creating low pollution, low emission of carbon dioxide, as the result there is the low fluctuation of changing climate and the health of human as well as the animal. However, renewable energy sources are inherently intermittent, leading to challenges in matching supply with demand. 

The important feature of the energy storage systems, particularly lithium-ion batteries, which can store surplus energy, when the energy is not required much and discharge it when needed or as per the requirement, which help in matching the need, when the energy is most required. For instance, in factoring or the manufacturing units, there is the need of the energy every time, because in absence of the energy, the production will not be there, as a result the supply chain will be affected and will create the imbalance. There the battery energy storge system is required and utilized the most.

Ancillary Services for Battery Energy Storage Systems Market Segment Insights:

Ancillary Services for Battery Energy Storage Systems by Type Insights

The Ancillary Services for Battery Energy Storage Systems Market segmentation, based on Type has been segmented as Frequency Regulation (and Balancing), Congestion relief, Voltage support, Power smoothing, Peak shaving, Backup Power, Solar Plus Storage, Grid Reliability & Microgrid Capability and Others. Among these, the Frequency Regulation (and Balancing) segment is projected to dominate the Ancillary Services for Battery Energy Storage Systems Market revenue through the projected period.

The power grid relies heavily on battery storage systems for its ability to provide regular and balanced services. These systems adjust power supply to demand in real time, providing rapid response capabilities that are critical to maintaining grid stability. Unlike conventional power plants, battery storage devices can quickly adjust output power to minimize seasonal fluctuations. 

Charge and discharge control mechanisms allow the battery system to inject or draw power to control the grid frequency to stay within the desired operating range. It has excellent first-order frequency response and continuously adjusts the output in response to sudden grid disturbances such as power outages. Furthermore, battery storage aids in improving secondary frequency response by monitoring grid frequencies and adjusting power levels over extended periods. These systems can enter the regular schedule market, allowing schedulers the flexibility and responsiveness to efficiently manage scheduling operations.

Ancillary Services for Battery Energy Storage Systems by Type, 2023, 2032 (USD Million)

Ancillary Services for Battery Energy Storage Systems by Battery Energy Storage System Type Insights

Based on Battery Energy Storage System Type, the Ancillary Services for Battery Energy Storage Systems Market is segmented as Lead acid, Lithium-ion, Flow batteries, Nickel-based batteries, Sodium-Sulphur and Zinc-Bromide. Out of which the Lithium-ion segment dominated base year market and is also projected to dominate the Ancillary Services for Battery Energy Storage Systems Market revenue through the projected period.  

Battery energy storage systems (BES) are expected to incorporate lithium-ion batteries as a major technology, providing ancillary services to the power grid. The high capacity, long life and quick response time of lithium-ion batteries makes them a perfect choice for extended service applications that require fast and precise adjustments. 

In the field of ancillary services, lithium-ion batteries are useful in functions such as frequency regulation, voltage support and grid stability. Lithium-ion batteries are fast to charge and release power, providing good frequency requirements by quickly responding to changes in voltage due to changes in power demand or power supply.

Ancillary Services for Battery Energy Storage Systems by Battery Energy Storage System Type, 2023, 2032 (USD Million)

Ancillary Services for Battery Energy Storage Systems by End-Use Insights

The Ancillary Services for Battery Energy Storage Systems Market segmentation, based on end-use has been segmented as Residential, Commercial, Industrial and Utilities. Among these, the Industrial segment held the maximum market share and is also expected to account for the significant revenue share during the forecast period.

In industrial applications, auxiliary battery storage services are crucial for optimizing energy management, improving reliability, and improving operational efficiency. Battery storage systems are utilized in industrial facilities to provide demand response, frequency regulation, and backup power as ancillary services. 

Battery storage systems can handle regular usage and fluctuations in the power grid quickly while maintaining consistent reliability and stability in industrial applications. When the power is lost, battery storage becomes a reliable source of emergency power and helps prevent system failures. Industrial end users can enhance their competitiveness and sustainability in a changing energy environment by utilizing battery storage backup services, which reduces operational risks and helps maintain grid stability.

Ancillary Services for Battery Energy Storage Systems by End-Use Insights, 2023, 2032 (USD Million)

Ancillary Services for Battery Energy Storage Systems Regional Insights

Based on Region, the Ancillary Services for Battery Energy Storage Systems market is segmented into North America, Europe, Asia-Pacific, Middle East & Africa, and Latin America. The Asia Pacific Ancillary Services for Battery Energy Storage Systems market held the maximum market share and is also expected to account for the significant revenue share during the forecast period.

Several factors are driving the rapid growth of the market for ancillary services such as battery energy storage systems (BESS) in Asia Pacific. Reliable and efficient electricity infrastructures are increasingly needed as industrialization and urbanization continue in the region. 

In addition, the growing use of renewable energy sources and ambitious climate goals are driving the deployment of BESS to support grid stability and the integration of renewables. Countries such as China, Japan, South Korea and Australia are leading the deployment of BESS with significant investments in grid modernization and energy storage projects.

Ancillary Services for Battery Energy Storage Systems Regional Insights, 2023 (USD Million)

Ancillary Services for Battery Energy Storage Systems Key Market Players & Competitive Insights

Ancillary Services for Battery Energy Storage Systems Market is characterized by a high level of competition, with many players emerging for market share. The top 10 companies in the market account for a significant market share of Ancillary Services for Battery Energy Storage Systems Market. The competitive landscape of Ancillary Services for Battery Energy Storage Systems Market is dynamic, with companies constantly innovating and expanding their product offerings. 

Despite the challenges, there are several factors that are driving growth in the ancillary services for battery energy storage systems market. These include renewable integration and grid modernization. The ancillary services for battery energy storage systems market are expected to witness significant growth in the coming years, owing to energy transition initiative and technological innovation.

The market is benefiting from the development of new technologies. The key players in the Ancillary Services for Battery Energy Storage Systems Market include Nidec Industrial Solutions, ESS Inc., EDF Energy, Powin Energy, Saft, Mitsubishi Heavy Industries, Ltd., Honeywell International, Inc., LG Energy Solution Ltd., NextEra Energy and Doosan GridTech. These companies compete based on product quality, innovation, price, customer service, and market share. Companies also engage in various strategic initiatives, such as mergers and acquisitions, partnerships, joint ventures, and expansions, investment to enhance their market position and expand their product portfolio. 

Companies are also focusing on developing new and innovative products that meet the specific needs of their customers. Companies will need to continue to innovate and expand their product offerings to remain competitive. For instance, on 11 August 2023, ESS Inc. has announced a strategic partnership with Energy Storage Industries Asia Pacific (“ESI”) to distribute and manufacture iron flow batteries utilizing ESS technology in Australia, New Zealand, and Oceania to meet rapidly growing demand for long-duration energy storage in the region.

Ancillary Services for Battery Energy Storage Systems Industry Developments

19-December-2024:Nidec Corporation has announced that investment of 15.8 million GBP in Gore Street Energy Storage Fund PLC (“GSF”), an investment trust fund that operates an energy storage system business, through the Company’s subsidiary, Nidec Motor Corporation (“NMC”), on December 19, 2024 (US time).

10 February 2023:EDF and GE announced that they have signed an exclusive agreement for EDF to acquire part of GE Steam Power’s nuclear power activities. The proposed transaction would bring together GE’s nuclear steam turbine technology and services expertise with EDF strengthening its commitment to the nuclear power sector, creating an industry-leading global steam turbine equipment and services provider within EDF Group. Today, GE Steam Power’s nuclear steam turbines are installed in half of the world's nuclear power plants, including in all EDF’s nuclear plants in France.

Key Companies in the Ancillary Services for Battery Energy Storage Systems Market includes.

• Nidec Industrial Solutions


• ESS Inc.


• EDF Energy


• Powin Energy


• Saft


• Mitsubishi Heavy Industries, Ltd.


• Honeywell International, Inc.


• LG Energy Solution Ltd.


• NextEra Energy


• Doosan GridTech

Ancillary Services for Battery Energy Storage Systems Market Segmentation:

Ancillary Services for Battery Energy Storage Systems Type Outlook

• Frequency Regulation (and Balancing)


• Congestion relief


• Voltage support


• Power smoothing


• Peak shaving


• Backup Power


• Solar Plus Storage


• Grid Reliability & Microgrid Capability


• Others

Ancillary Services for Battery Energy Storage Systems Rated Battery Energy Storage System Type Outlook

• Lead acid


• Lithium-ion


• Flow batteries


• Nickel-based batteries


• Sodium-Sulphur


• Zinc-Bromide

Ancillary Services for Battery Energy Storage Systems End-Use Outlook

• Residential


• Commercial


• Industrial
  
  
  
  • Heavy Industries
  
  
  • Renewable Energy
  
  
  • Others
  
  
  
  


• Utilities

Ancillary Services for Battery Energy Storage Systems Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  • Mexico
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Spain
  
  
  • Italy
  
  
  • Norway
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • India
  
  
  • Japan
  
  
  • South Korea
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Latin America
  
  
  
  • Brazil
  
  
  • Argentina
  
  
  • Rest of Latin America
  
  
  • Middle East & Africa
  
  
  
  


• GCC Countries
  
  
  
  • South Africa
  
  
  • Rest of Middle East & Africa