April 23, 2026: Battery storage was the fastest-growing power sector technology in 2025, according to latest analysis from the International Energy Agency (IEA).
The roughly 110GW of new BESS capacity added during the year exceeded the largest-ever annual capacity additions for natural gas, IEA said in its latest Global Energy Review, released on April 20.
Meanwhile, global energy demand grew at a slower pace in 2025 than the year before, while electricity consumption continued to rise much faster than overall demand — with solar PV becoming the largest contributor to growth in global energy supply for the first time.
Installed BESS capacity is now 11x higher than in 2021, according to the IEA, with LFP batteries accounting for around 90% of deployments.
While less energy‑dense than rival chemistries commonly used in EVs, LFP batteries are typically cheaper and better suited to more frequent cycling. Just five years ago, the market share of LFP batteries in deployments was well below 50%.
IEA’s analysis indicates that around 80% of new battery capacity in 2025 was utility‑scale. The remainder was behind-the-meter capacity installed by commercial and residential consumers.
Battery storage durations are gradually lengthening. While most projects still cluster around two hours, an increasing number can be deployed for four hours or more, reflecting the growing value of flexibility in systems with rising shares of PV.
China continued to lead battery deployment in 2025, accounting for around 60% of global additions, followed by the US and Europe. However, the IEA said deployment is widening beyond the largest markets, with strong momentum in Australia and parts of the Middle East, where storage is increasingly seen as a key building block for electricity security and renewables integration.
Battery-based UPS systems, primarily in data centers, also saw significant growth, with capacity additions rising 30% to 45GW in 2025. However, unlike BESS systems, UPS generally only provide short‑duration backup to bridge outages until other backup sources start.
In terms of EV battery tech, the IEA said electric car sales increased by more than 20% year-on-year in 2025, rising to 21 million units, with one in four cars sold being electric.
Almost all the growth in China’s electric car sales came from pure battery electric vehicles, with plug-in hybrids seeing a smaller increase (4%).
In the EU, electric car sales increased by 30% in 2025, with Europe as a whole overtaking China as the fastest growing major market for electric cars.
In the US, electric car sales declined by 2%, largely the result of the elimination both of federal tax credits and of fines for not meeting fuel economy standards.
Separate analysis from the US Energy Storage Monitor report, released by the American Clean Power Association and Wood Mackenzie earlier this year, showed that US installations of energy storage systems set a new market record in 2024 of more than 12GW.
