Compressed Air Energy Storage (CAES) Market - By Technology (Adiabatic, Diabatic, Isothermal), By Application (On Site Power, Black Start, Electric Supply Capacity) & Forecast, 2024 – 2032

Compressed Air Energy Storage Market Size

Compressed Air Energy Storage Market size surpassed USD 1.13 billion in 2023 and is anticipated to register 11.3% CAGR from 2024 to 2032. With the increasing integration of renewable energy sources like solar and wind into the power grid, there is a growing need for these storage solutions to address the intermittent nature of such sources. The market for energy storage systems will cross a valuation of USD 1.7 billion by 2032.
 

Several projects are underway worldwide to deploy large-scale CAES facilities that can provide grid-scale energy storage capabilities. These projects aim to validate the viability of CAES on a commercial level and contribute to its industry growth. Governments and regulatory bodies are increasingly recognizing the importance of energy storage technologies in achieving a sustainable and reliable energy system. To support the deployment of CAES and other energy storage solutions, various policy mechanisms, financial incentives, and research programs are being implemented to encourage investment and innovation in the sector.

COVID-19 Impact

The COVID-19 pandemic has had various impacts on industries worldwide, including the energy sector and the development of energy storage technologies including CAES. The pandemic caused significant disruptions to global supply chains, affecting the availability of materials, components, and equipment necessary for energy projects. Delays in the delivery of essential equipment or construction materials could have potentially impacted compressed air energy storage market growth. The economic uncertainties resulting from the pandemic have affected investment decisions and financial markets. As a result, some energy projects, including CAES, may have faced challenges in securing funding or experienced delays in financial arrangements.
 

Compressed Air Energy Storage Market Trends

The CAES market is expected to witness significant growth in the coming years. Regions with high renewable energy penetration, such as North America, Europe, and Asia-Pacific, are likely to drive the business expansion. The increasing deployment of renewable energy and the need for grid stability are expected to propel the demand for these solutions. Frequent power failures and lack of reliable grid infrastructure has necessitated the installation of cost-efficient storage systems across developing regions. Moreover, extreme peak load demand and focus on grid stabilization are some of the key factors driving the utilization of ESS worldwide.
 

The ongoing integration of clean energy sources along with the associated long-term benefits has re-invigorated the interest toward adoption of CAES technology. The financial institutions and policymakers are playing a significant role in facilitating a sustainable ESS ecosystem through fiscal support, investment and suitable policy frameworks. Furthermore, a supportive government initiatives toward installation of sustainable technologies including compressed air energy storage has resulted in robust business growth.
 

Compressed Air Energy Market Analysis

Adiabatic compressed air energy storage market value of over USD 600 million in 2022. Various academic and industry research initiatives have been focused on advancing the technology, optimizing system designs, and developing innovative solutions to enhance its efficiency and economic competitiveness. Several pilot and demonstration projects have been initiated to validate the performance and feasibility of adiabatic CAES at scale. These projects aim to showcase the technical capabilities and potential benefits of adiabatic CAES, including its improved efficiency, shorter response times, and reduced environmental impact.
 

Black start CAES market is projected to attain 14% gains between 2023 and 2032. Black start is the restoration of power function to an electric grid or network and generator without the utilization of external transmission lines. Growing demand for power system resilience on account of increased electricity outages or power failures has stimulated the demand for effective systems to initiate black start. Grid resilience has become a critical consideration, and the ability to restore power quickly after a blackout is of paramount importance. Energy storage technologies like CAES, with their ability to rapidly inject power into the grid, are being explored as potential solutions for black start capabilities. CAES systems can provide the necessary energy and power output to initiate and stabilize the restoration process.
 

North America region has been witnessing a significant increase in renewable energy generation, particularly from sources such as wind and solar power. CAES technology can play a crucial role in supporting the integration of intermittent renewables by providing grid-scale energy storage solutions and helping to balance supply and demand. Governments at both federal and state levels in North America have been introducing supportive policies and incentives to encourage the deployment of energy storage technologies, including CAES.
 

These policy frameworks aim to address grid stability challenges, promote clean energy adoption, and create a favorable compressed air energy storage market environment. The increasing recognition of the value of energy storage technologies and the potential profitability of CAES have attracted investments from venture capital firms, private equity, and strategic investors. The growing interest from investors in the region indicates confidence in the long-term prospects of CAES and its potential to contribute to the energy transition.
 

Compressed Air Energy Storage Market Share

Major participants operating in the compressed air energy storage industry landscape are:

• Siemens
• Hydrostor Inc
• Pacific Gas and Electric Company
• APEX CAES
• Storelectric LTD
• ALACAES
• AUGWIND ENERGY
• Cheesecake Energy Ltd
• ENERGY DOME S.p.A
• TerraStor Energy Corporation
• Corre Energy
• Sherwood Power
• Green-Y Energy AG
• TerraStor Energy Corporation
• Corre Energy

Major manufacturers across Asia Pacific and the U.S. are inclined toward mergers & acquisitions, strategic collaborations, partnerships, and joint ventures to further gain a competitive advantage in the market.
 

Compressed Air Energy Storage (CAES) Industry News:

• In October 2022, McDermott won a contract for front-end engineering design from Hydrostor Incorporated for the Silver City Energy Storage project located in Broken Hill, New South Wales, Australia. Under the contract, the company will supply full FEED services for an advanced compressed air energy storage facility with a capacity of 200 MW that can deliver up to eight hours of energy discharge at a single time. Moreover, the contract was followed by pre-FEED services by IO Consulting, a joint venture of McDermott, which will supply these services during the FEED phase. McDermott will also improve its storage business, CB&I, to influence the best thermal liquid storage solutions.
   

This compressed air energy storage market research report includes an in-depth coverage of the industry with estimates & forecast in terms of revenue in MW & USD Million from 2019 to 2032, for the following segments:

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Market, By Technology

• Adiabatic
• Diabatic
• Isothermal

Market, By Application

• On Site Power
• Black Start
• Electric Supply Capacity
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia