- AI data centre-fuelled power demand growth in the U.S. is likely to drive a “boom cycle” for energy storage in the next five years.
- In China, a push to implement market-based pricing for renewables will give a further boost to energy storage projects, which profit by charging up when prices are low and selling power when prices are high.
AI data centre-fuelled power demand growth in the U.S. is likely to drive a “boom cycle” for energy storage in the next five years as more storage is needed to smooth out fluctuations from wind and solar generation, according to UBS Securities.
Global energy storage demand could increase 40 per cent globally year-on-year in 2026, Hong Kong-based UBS Securities analyst Yan Yishu noted in a media briefing.
“The demand for AI data centres in the U.S. is very robust, but electricity is the biggest bottleneck.”
Renewables are the only power-generating segment expected to grow significantly in the next five years in the U.S., and because they produce power intermittently, the grid needs more batteries to store that power.
The U.S. market is key for Chinese energy storage manufacturers, which have a 20 per cent market share in the U.S., because it is one of the highest-margin markets.
However, emerging markets in the Middle East, Latin America, Africa, and Southeast Asia could see the fastest growth rates of 30 per cent to 50 per cent or more, Yan said in the briefing.
The biggest risk for Chinese exports to the U.S. is the foreign entity of concern requirements in President Trump’s One Big Beautiful Bill, which places restrictions on participation in the U.S. energy sector by Chinese-owned or controlled companies, Yan said.
In China, a push to implement market-based pricing for renewables will give a further boost to energy storage projects, which profit by charging up when prices are low and selling power when prices are high.
A peak-valley electricity price difference of 0.4 yuan ($0.06) per kilowatt-hour is enough to put independent storage projects, or those that are not combined with a renewable power plant, in the money, Yan said.
UBS anticipates that Chinese provinces are likely to introduce so-called capacity payments, which compensate battery owners to be available when needed, to further incentivise energy storage.