Renewables are winning the capacity race, but without energy storage they cannot win the reliability war. In 2024 the world added 585 GW of renewable power capacity—up 15.1% year-on-year—taking global renewables to 4,448 GW. Yet the International Renewable Energy Agency warns deployment is still behind the pace needed to hit 2030 targets. Solar and wind accounted for 96.6% of net additions, concentrating the variability challenge that storage must solve.
The good news is that storage is scaling. BloombergNEF expects 2025 global energy-storage additions to grow 35% to 94 GW (247 GWh), with annual additions reaching 220 GW by 2035 if current trajectories hold. Markets outside the traditional leaders are now commissioning gigawatt-hour projects, from South Africa and Saudi Arabia to Chile, the Netherlands and the UK—evidence that storage is becoming a mainstream grid asset rather than a niche pilot.
Even so, the gap remains large. The IEA estimates that battery rollout—though doubling last year—must accelerate to deliver roughly 1,500 GW of total storage by 2030, including ~1,200 GW in batteries, to keep renewables from stalling. Battery pack prices have fallen below the symbolic $100/kWh threshold, but the agency’s message is blunt: costs must keep dropping and supply chains must diversify to meet demand safely and at scale.
This is the core of the energy-transition paradox. Policy has successfully pushed record volumes of variable generation onto the system; market design and infrastructure must now convert those electrons into dependable, around-the-clock supply. In practice, that means three things: large-scale batteries for fast response and daily shifting; long-duration storage to bridge multi-hour and multi-day ramps; and pumped-storage hydropower as the inertial backbone that stabilises grids at scale.
Start with batteries. Manufacturing capacity is no longer the binding constraint it once was. After years of investment, the IEA estimates global battery manufacturing hit ~3 TWh in 2024, with the next five years likely to triple that capability—enough to support rapid growth in both EVs and stationary storage if financing and siting keep pace. In the United States, Q1-2025 delivered the strongest first quarter on record, with >2 GW added across segments, led by utility-scale projects up 57% year-on-year. These are not marginal deployments; they are reshaping how peak demand is served and how solar midday surpluses are monetised.
But batteries are only part of the story. The other quiet revolution is in pumped-storage hydropower—still the world’s largest storage resource. China alone is on track to exceed its 2030 pumped-storage target by >8%, potentially reaching 130 GW by decade’s end, after adding 7.75 GW in 2024 and putting >200 GW under construction. The policy logic is straightforward: as wind and solar surge, multi-hour storage with proven reliability becomes the cheapest way to firm evening peaks and provide grid stability services. The rest of the world is moving more slowly—constrained by permitting, environmental safeguards and financing—but the direction is the same.
Why does storage growth track renewable expansion so closely? Because the economics of wind and solar increasingly depend on when electricity is delivered, not just how much is produced. In high-renewables systems, midday prices can crash while evening prices spike. Storage arbitrages this spread, turning curtailment into revenue and volatility into capacity value. That is why developers and utilities are bundling storage into newbuild renewables by default and why tenders in multiple markets now procure “firm” or “peak” clean power instead of standalone energy.
A second linkage is transmission. Storage can act as a virtual transmission asset—deferring wires by shifting energy in time at congested nodes—while new interconnectors magnify the value of storage by accessing more diverse weather and demand patterns. BloombergNEF’s 2025 outlook explicitly notes that growth is spreading into markets building larger utility-scale projects alongside grid upgrades, a sign that planners see storage and transmission as complements rather than substitutes.
Third, system resilience is now a storage market in its own right. Heatwaves, storms and wildfire risks are increasing the premium on black-start capability, frequency support and fast reserve. Batteries excel at sub-hourly flexibility, while pumped storage and other long-duration options cover multi-hour stress events. Wood Mackenzie’s recent analysis underscores the capital need: US$1.2 trillion of battery-storage investment through 2034 to close a 1,400-GW gap in grid-forming capacity and stability services, particularly in Asia-Pacific systems already seeing wind-plus-solar reach 46–90% of peak load at times.
The policy implications follow directly from the data in these latest reports:
First, governments should move from technology-neutral rhetoric to service-oriented market design. Pay for availability, ramping and inertia; procure four-, eight- and twelve-hour blocks explicitly; and credit grid-forming capabilities that let batteries provide virtual inertia and ride-through. Where regulators have done this, storage build-outs accelerated because revenues became bankable.
Second, scale requires de-risked supply chains. The IEA’s call to diversify mineral and cell production is not abstract. Concentration risk in cathodes, anodes and electrolytes can turn a cost curve into a bottleneck overnight. Localisation mandates are one tool; more flexible are offtake-backed financing, public procurement for critical grid services, and faster permitting for both battery plants and pumped-storage reservoirs—paired with robust environmental and safety rules.
Third, planners should admit we need all forms of storage. Batteries dominate incremental growth and short-duration arbitrage; pumped storage provides bulk shifting and system strength; other long-duration technologies—from flow batteries to thermal and compressed-air—will find niches where they beat lithium-ion on duration or lifecycle cost. The point is portfolio effects: no single technology can cover every use case cost-effectively across every grid.
Finally, the centre of gravity is moving beyond the United States and China. BNEF’s mapping of 2024–25 projects shows multi-GWh systems starting in emerging markets. That aligns with IRENA’s broader finding that renewables are spreading fast but unevenly, and it underscores why concessional finance and multilateral guarantees should prioritise storage-plus-renewables packages in countries where grid investment and currency risk would otherwise slow adoption.
Storage is not an add-on to the renewable build-out; it is the enabler that converts record capacity into reliable supply, investable projects and lower system costs over time. The latest global numbers tell a coherent story: renewables are scaling at historic rates; storage additions are accelerating across technologies and geographies; and the remaining gap is less about invention than execution—market rules, supply chains and siting.
If policymakers and investors focus on those practical levers, the hinge will hold. And when it does, the world’s record renewable additions will translate into the measure that ultimately matters: clean power, when we need it.
