The Rapid Growth of the Global Battery Energy Storage Market in 2025 and Opportunities for Korean Companies
Editor
Explosive Growth of the Battery Energy Storage Market
The battery energy storage system (BESS) market reached a historic turning point in 2025. According to Bloomberg NEF, the global BESS market size surpassed $120 billion this year, recording a 35% growth compared to the previous year. This represents a six-fold increase from the $20 billion market size in 2020, making it one of the fastest-growing sectors in the energy industry. Notably, the new installation capacity of large-scale utility-grade storage facilities reached 240 GWh, an 85% increase from the previous year.
The backdrop of this rapid growth includes the increase in renewable energy generation and the demand for grid stability. According to a report by the International Renewable Energy Agency (IRENA), the global share of renewable energy generation will reach 42% by 2025, significantly increasing the need for storage solutions to ensure the stable supply of intermittent solar and wind power. The U.S. Department of Energy announced that an additional 500 GWh of storage capacity is needed by 2030 to maintain grid stability, which is three times the current operational storage capacity.
One of the main drivers of market growth is the rapid advancement and cost reduction of battery technology. The average price of lithium-ion batteries per kWh fell to $89 in 2025, a decrease of over 75% compared to $350 in 2015. Along with securing price competitiveness, technological advancements such as improved energy density, increased charge-discharge efficiency, and extended lifespan have significantly enhanced the economic viability of BESS. Goldman Sachs Research analyzed that the levelized cost of storage (LCOS) for battery storage systems fell to $0.12 per kWh in 2025.
Examining regional market trends, China maintains a dominant position, accounting for 45% of the total market. According to China’s National Energy Administration, the new BESS installation capacity in China reached 108 GWh in 2025, a 120% increase from the previous year. The United States holds 25% of the total market, with California and Texas accounting for 60% of the total installations. The European market, centered around Germany and the UK, grew by 45% compared to the previous year, occupying 18% of the total market. South Korea holds 3.2% of the total market, ranking third in the Asia-Pacific region after China and Japan.
Strengthening Global Competitiveness of Korean Battery Companies
Major Korean battery manufacturers are demonstrating strong competitiveness in the BESS market. LG Energy Solution (located in Seongnam, Gyeonggi Province) announced that its BESS division revenue increased by 78% year-on-year to 18.5 trillion won in 2025, accounting for 35% of total revenue. Particularly, it achieved a 23% market share in the North American utility market, ranking second after Tesla (located in California). LG Energy Solution’s batteries for BESS are evaluated to have an energy density of 280 Wh/kg per kWh and can maintain over 80% capacity during a 25-year warranty period.
Samsung SDI (located in Yongin, Gyeonggi Province) is also making a mark in the BESS market. The company reported achieving 12.3 trillion won in ESS division revenue in 2025, a 65% growth from the previous year. Samsung SDI’s differentiated competitiveness lies in its high-voltage system technology. Its 1500V high-voltage BESS can save 30% of installation space compared to the existing 1000V systems, with a system efficiency of 95.5%. Particularly, it has strengthened its market position by consecutively winning large projects with German utility companies in the European market.
SK Innovation (located in Seoul) is focusing on developing next-generation battery technology and pursuing a differentiation strategy. The company commercialized its NCM (Nickel-Cobalt-Manganese) 9-0.5-0.5 battery in 2025, improving energy density by 15% compared to existing products. This allows for reduced installation space while storing more energy in BESS systems. SK Innovation’s BESS division revenue reached 8.7 trillion won, a 52% increase from the previous year, showing strong performance particularly in the Southeast Asian market.
The technological prowess of Korean companies is also being proven in comparison with global competitors. While China’s largest battery company, CATL (Contemporary Amperex Technology, located in Fujian Province), recorded a 32% market share in the global BESS market, the combined market share of the three Korean companies (LG Energy Solution, Samsung SDI, SK Innovation) reached 28%. Particularly in large utility projects that require advanced technology, Korean companies are showing stronger performance. Tesla Energy, a subsidiary of Tesla, focuses primarily on the North American market, recording a 15% market share, but due to a lack of battery cell production capacity, it increasingly relies on OEM production from Korean companies.
In terms of technology, Korean companies have secured a competitive edge in safety and reliability. LG Energy Solution’s BESS passed the UL9540A safety standard and applied thermal runaway prevention technology to minimize fire risk. Samsung SDI maximized system stability with its proprietary BMS (Battery Management System) technology, which monitors down to individual cell units. Based on this technological capability, Korean companies offer long-term warranties of 20-25 years, securing customer trust.
Market experts evaluate the entry of Korean battery companies into the BESS market as a natural expansion utilizing the technological capabilities and production experience accumulated in the electric vehicle battery market. Ravi Manghani, an energy storage analyst at Wood Mackenzie, stated, “The large-scale production capacity and quality management know-how accumulated by Korean companies in electric vehicle batteries are acting as strong competitiveness in the BESS market as well,” adding, “They have established a premium positioning compared to Chinese companies, particularly in terms of safety and lifespan.”
Market Segmentation and New Business Models
The BESS market is diversifying according to application and scale, with specialized technologies and business models emerging in each sector. Utility-scale large storage facilities account for 72% of the total market, representing the largest share. In this sector, large facilities over 100 MW are predominant, providing various grid services such as frequency regulation, peak reduction, and renewable energy integration. In the ERCOT market in Texas, USA, a total of 35 GW of BESS is operational as of 2025, equivalent to 45% of the state’s total peak demand.
The commercial and industrial (C&I) BESS market is also growing rapidly. This sector, accounting for 18% of the total market, is experiencing an annual growth rate of 42% as corporate demand for electricity cost reduction and blackout preparedness increases. Particularly, data centers, manufacturers, and large retailers are emerging as major customer bases. Amazon (located in Washington State) announced that it completed the installation of a total of 2.5 GWh of BESS in its global data centers by 2025, achieving a 15% annual electricity cost reduction.
The residential BESS market, while relatively small at 10%, shows high growth potential. Tesla’s Powerwall series leads this market, surpassing 2 million cumulative installations by 2025. The enhancement of energy independence and blackout preparedness through integration with home solar systems acts as a major purchase motivation. In Germany, government subsidies are provided for residential BESS installations, with new installations increasing by 85% year-on-year to 150,000 units in 2025.
The BESS-as-a-Service (BaaS) model is gaining attention as a new business model. This approach allows customers to use battery facilities in a service format without direct ownership, reducing initial investment burdens while enjoying the benefits of energy storage. Fluence Energy (located in Virginia, USA) is a leader in this model, reporting a BaaS contract size of 8.5 GWh in 2025. The company secures stable revenue through 20-year long-term service contracts while providing customers with predictable energy costs.
The concept of a Virtual Power Plant (VPP) is also emerging as a new paradigm in the BESS market. This involves connecting distributed small battery storage facilities into a network to operate like a large power plant. Australia’s Tesla VPP project connected residential batteries from 50,000 households to create a virtual power plant with a total capacity of 250 MW, improving grid stability while providing power cost reduction benefits to participating households. This model accelerates the transition from traditional centralized power systems to decentralized energy systems.
Along with market segmentation, technical specialization is also progressing. While lithium-ion batteries are predominant for short-term frequency regulation, alternative technologies such as iron-air batteries and liquid metal batteries are being developed for applications requiring long-term energy storage. Form Energy (located in Massachusetts, USA) developed a system capable of discharging continuously for over 100 hours with iron-air batteries, achieving commercialization in 2025. This diversification of technology further expands the application range of the BESS market.
Industry experts consider this market segmentation and diversification of business models as key factors supporting the sustainable growth of the BESS market. Logan Goldie, head of the energy storage division at Bloomberg NEF, stated, “Companies that move beyond simple battery sales to offer a variety of services and solutions are succeeding in the market,” predicting that “companies that can provide customized solutions to meet diverse customer needs will lead the market in the future.”
As we approach 2026, the BESS market is entering a full-fledged popularization phase based on technological maturity and economic viability. How effectively Korean companies respond to these market changes is expected to determine their competitiveness in the global energy storage market. Particularly, it is a time for a multifaceted approach, including technological innovation, the development of new business models, and the establishment of global partnerships. When government policy support is combined with active investment and innovation from private companies, Korea can secure a leading position in the global BESS market.
Disclaimer: This analysis is an industry trend report based on publicly available information and should not be interpreted as investment advice or trading signals. Investment decisions should be made at the individual’s discretion and responsibility, and the stock prices or performance of the mentioned companies may fluctuate depending on market conditions.
