Falling costs and growing demand for flexibility are driving a rapid expansion of battery storage in power systems around the world. In 2025, global battery capacity additions reached 108 GW—up roughly 40 percent from 2024—surpassing historical peaks for gas-fired capacity growth. Utility-scale systems accounted for about 87 GW of this total, while behind-the-meter deployments also accelerated in regions with high retail electricity prices and supportive policies.
China, the United States and Europe remained the largest markets, adding just over 63 GW, 19 GW and 6.2 GW, respectively. At the same time, new markets gained momentum: Australia’s battery installations rose nearly ninefold to almost 8 GW, split between utility-scale and behind-the-meter systems. Saudi Arabia drove more than 3 GW of growth in the Middle East, and Chile added close to 1 GW to absorb surplus solar output and meet peak demand. Batteries now make up about 18 percent of dispatchable capacity in Australia, compared with 7 percent in China, 5 percent in the United States and 4 percent in Europe.
Innovation and economies of scale have cut battery costs by over 90 percent since 2010, shifting the primary use case from ancillary services to energy shifting. In 2025, more than 90 percent of new projects focused on storing large volumes of energy for later dispatch, compared with just 40 percent in 2015. As a result, average project durations rose to three hours in 2025 from two hours in 2023.
Modular design and streamlined construction—median build times of around 275 days—allow batteries to come online faster than gas-fired plants or pumped hydro. Yet permitting and grid-connection processes still extend total development timelines to two years or more in many regions.
Batteries are increasingly vital for balancing variable renewable output. In California, battery capacity climbed from under 1 GW in 2019 to over 17 GW, once covering more than 40 percent of evening load and handling over 60 percent of short-term ramping needs. Similar patterns have emerged in Texas and South Australia, where batteries now contribute a significant share of hourly ramping.
Removing regulatory uncertainty, speeding up permitting and recognizing the full value of battery services will be key to sustaining this growth trajectory.
Source: IEA Commentary
