(Bloomberg) -- Around the world, a wave of mega installations batteries are lining up to be connected to the grid this year — from solar hubs in Texas to grasslands in Inner Mongolia and the site of a former coal plant north of Sydney.Most Read from BloombergHormuz Chaos, Lebanon Clashes Dent Trump Peace Deal HopesNvidia Makes Quantum Computing CEO a Billionaire in DaysTrump Says New Iran Talks to Seek End of Hormuz StandoffTrump Says Iran Will Suspend Nuclear Program as Hormuz OpensCongo to Top
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(Bloomberg) -- Around the world, a wave of mega installations batteries are lining up to be connected to the grid this year — from solar hubs in Texas to grasslands in Inner Mongolia and the site of a former coal plant north of Sydney.
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Falling costs and soaring energy demand from data centers had already set the stage for rapid growth. The war in the Middle East has helped accelerate the trend by lifting demand for alternatives to expensive fossil fuels, setting 2026 up to be the year batteries become influential in the global energy system. BloombergNEF analysts had already expected installations to jump by about a third this year, led by expansion in Europe, the Middle East, Africa and Latin America. That momentum could build further if fuel disruptions persist.
Signs of the ramp up are already emerging. A Chinese battery manufacturer has forecast a sharp rise in first quarter profit as global demand picks up. In Vietnam, a developer is seeking approval to replace a planned LNG-to-power project with renewables paired with storage, citing the surge in fuel costs linked to the war.
“We’ve now crossed into a point where anytime anyone is looking at investing in the power system, batteries are one of the most attractive options,” said Brent Wanner, head of the power sector unit at the International Energy Agency. “Battery storage systems will continue to grow for the foreseeable future.”
In markets flooded with solar and wind — technologies that have been built out significantly since the last energy crisis in 2022 — battery operators can buy electricity when it’s cheap and sell it when demand peaks. Where grids once relied on coal and gas when renewable output dipped, storage technology is now becoming cheap and fast enough to make a difference in how the grid functions. Average costs have dropped by around 75% from 2018 to 2025, according to BNEF, and are expected to tumble another 25% through 2035.
Battery projects are also increasingly being built in fleets big enough to make a real difference in how the grid operates. In Inner Mongolia, three massive sites were recently switched on with a combined capacity of 7.4 gigawatt-hours, enough to rival several large power plants for short periods. In Scotland, two huge neighboring battery farms at the site of a former coal mine will start up this year.