July 3, 2025: Investment of $1.2 trillion will be needed in advanced grid-forming (GFM) BESS technology worldwide to support the installation of around 6,000GW of new wind and solar capacity up to 2034, according to the latest analysis.
Wood Mackenzie said in a report published on July 2 that GFM needs to accelerate over the next decade to pave the way for a $5tn global expansion of renewable energy.
Unlike traditional ‘grid-following systems’ that simply respond to grid conditions, GFM can actively create and maintain grid stability, which is essential as renewable energy becomes the dominant source of power generation, the report said.
Wood Mackenzie research director Robert Liew said GFM systems represent a critical breakthrough for renewable energy integration.
“As global power demand is projected to surge 55% by 2034, with variable renewable energy comprising over 80% of new capacity additions, GFM BESS provides the technological bridge between renewable abundance and grid stability requirements.”
According to the report, the global power sector faces a capacity gap of 1,400GW for additional BESS installations utilising GFM for grid stability between 2024 to 2034.
Several Asia-Pacific markets are already operating with variable renewable energy from wind and solar power contributing 46% to 90% of peak load conditions.
The report said this represents an enormous market opportunity as GFM capabilities become the preferred solution for markets with increasing renewable energy penetration.
A major power blackout across Spain earlier this year highlights the urgency of pushing ahead with advanced energy storage and grid technologies in parallel.
GFM BESS provides multiple critical functions for stability including independent voltage source capabilities, high current transient support during disturbances, inertia response similar to conventional power plants, and black start functions for complete system recovery following outages.
According to the report, regulatory support for GFM battery technology is accelerating, with major markets such as China, the US and Australia introducing comprehensive technical guidelines that support the deployment of grid-forming batteries.
While international standards are still under development, early regulatory signals point toward a preference for advanced grid-forming capabilities, the report said.
