The year 2025 marked a turning point in which battery energy storage systems (BESS) established a central position in global energy infrastructure. According to the IEA's "Global Energy Review 2026" report, 108 GW of new battery storage capacity was brought online worldwide in 2025; this corresponds to a 40% increase compared to 2024 and is eleven times the 2021 level (IEA – Global Energy Review 2026; Ecofin Agency). This growth has even surpassed the highest annual increase ever recorded in natural gas power plant capacity.
The year 2025 marked a turning point in which battery energy storage systems (BESS) established a central position in global energy infrastructure. According to the IEA's "Global Energy Review 2026" report, 108 GW of new battery storage capacity was brought online worldwide in 2025; this corresponds to a 40% increase compared to 2024 and is eleven times the 2021 level (IEA – Global Energy Review 2026; Ecofin Agency). This growth has even surpassed the highest annual increase ever recorded in natural gas power plant capacity.
According to Benchmark Mineral Intelligence data, when grid-scale and behind-the-meter segments are considered together, a total of ~315 GWh of battery installations were realized in 2025; this points to an approximately 51% increase in demand on an annual basis (Energy Storage News).
Capacity and Regional Distribution
According to IEA data, approximately 80% of new capacity consisted of large-scale, grid-connected projects; this situation shows that centralized storage solutions have come to the fore to support intermittent renewable sources such as solar. The distribution by country is as follows:
• China alone added approximately 60% of new capacity (over 63 GW) and continued to be the world's largest market.
• The US ranked second with ~19 GW.
• Europe added ~6.2 GW, showing a strong shift toward grid-scale installations.
• Australia added ~8 GW, an approximately nine-fold increase compared to the previous year; battery storage now constitutes ~18% of the country's total dispatchable generation capacity.
• Saudi Arabia and Chile entered among the fastest-growing markets in the Middle East and Latin America, respectively (Kimbal – IEA Report Summary
According to Rho Motion (Benchmark Mineral Intelligence) data, as of October 2025, global grid-scale BESS installations reached 156 GWh, corresponding to a 38% increase compared to the same period of the previous year; a striking 242% jump in installations was observed in the "rest of world" (ROW) category (Energy Storage News).
Operational Performance: Batteries Are Becoming Active Tools in Grid Management
One of the most important findings highlighted by the IEA is that batteries now function as active grid resources rather than passive backup equipment:
• Installed battery capacity in California exceeded 17 GW; on March 29, 2026, batteries met more than 40% of the state's electricity demand during evening peak hours and contributed to more than 60% of the hourly ramping needs.
• In the Texas (ERCOT) market, batteries met more than 40% of hourly ramping needs in April 2026.
• In South Australia, batteries contribute to more than 30% of hourly ramping needs in certain months of the year (Kimbal – IEA Report Summary).
The energy shifting application, which was the priority use case in only ~40% of new projects in 2015, exceeded 90% in 2025. The average storage duration of new grid-scale projects also increased from two hours in 2023 to three hours in 2025, with growing interest in systems of four hours and above.
Chemical Composition and Materials Science Perspective:
The Dominance of Lithium Iron Phosphate (LFP)
According to IEA data, LFP batteries accounted for ~90% of total installations in 2025; this preference is explained by low cost and higher durability against repeated cycles (Ecofin Agency). According to sector data compiled by Sustainability Atlas, LFP's cycle life exceeds 6,000 cycles, while this figure remains in the range of 2,000-3,000 cycles for NMC (Nickel-Manganese-Cobalt) chemistry; additionally, LFP does not require cobalt and nickel, reducing supply chain risks (Sustainability Atlas).
Commercialization of Sodium-Ion Batteries
2025 has been recorded as the year sodium-ion (Na-ion) technology moved from the laboratory to commercial production. CATL began mass production of its first-generation sodium-ion cells (160 Wh/kg energy density) at the end of 2024; manufacturers such as BYD and HiNa Battery are targeting 2026 deliveries. The cost of sodium-ion cathode materials is 30-50% lower compared to LFP, and sodium is approximately 1,000 times more abundant in the Earth's crust than lithium. However, energy density remains 20-30% below that of LFP, limiting the application to stationary storage, two-wheeled vehicles, and low-speed urban vehicles (Sustainability Atlas).
According to a review published in Yale Environment 360, IEA analyst Teo Lombardo stated that more than 40% of energy-related patents in 2024 were related to batteries — this points to a historical peak in research intensity in the sector. CATL signed a 60 GWh sodium battery supply agreement for grid storage in Ningde, Fujian Province, China, in May 2025 (Yale E360).
Solid-State Batteries: From Laboratory to Pilot Production
Solid-state batteries, using ceramic/polymer/composite solid electrolytes instead of liquid electrolyte, both increase safety and enable the use of lithium-metal anodes, allowing energy density to exceed 400 Wh/kg (compared to 250-300 Wh/kg in conventional Li-ion) (MDPI – Batteries Journal). However, according to Yale E360, as of 2025-2026, solid-state batteries constitute only ~1% of global battery production capacity, while sodium-ion constitutes ~4% (Yale E360). While Toyota and Nissan are targeting commercialization around 2028, Samsung SDI and QuantumScape have developed multi-layer cells demonstrating acceptable capacity retention performance over more than 800 charge cycles. Dendrite formation, high-temperature ceramic electrolyte processing, and scaling challenges still remain significant obstacles.
Recycling and Circular Economy
According to a review article published in Nature Energy in 2026, current recycling processes are largely suitable for today's lithium-ion chemistries; however, next-generation systems such as sodium-ion and solid-state batteries will require process adaptation (Nature Energy – Kronemeyer et al.). The EU Battery Regulation came fully into force in 2025 and set minimum recycled content thresholds effective from 2031: 16% for cobalt, 6% for lithium, and 6% for nickel (Sustainability Atlas).
Cost Trends
According to the IEA's report, battery costs fell by more than 90% between 2010 and 2025. In 2025, BESS system prices in project tenders in China dropped to as low as $63/kWh, reaching a new floor; however, the sharp increase in lithium prices at the beginning of 2026 (due to stock tightness, slowing mining, and China's withdrawal of battery tax incentives) carries the risk of reversing this trend (Energy Storage News).
Conclusion
The year 2025 was a year in which battery storage systems became the "multifunctional tool" of the global energy system: they can simultaneously provide numerous services such as storing renewable energy, balancing peak demand, frequency/voltage regulation, and ensuring grid flexibility. From a chemical perspective, a transformation is observed in which LFP chemistry maintains its market dominance, sodium-ion has crossed the commercialization threshold, and solid-state technology is in the process of transitioning from laboratory to pilot production. Adapting recycling infrastructure to this chemical diversity will be decisive for the medium- and long-term sustainability of the sector.
Sources
1. IEA – Global Energy Review 2026: Technology – Battery Storage
2. Ecofin Agency – "Global Battery Storage Capacity Jumps 40% in 2025, IEA Reports"
3. Kimbal – "Battery Storage Is Becoming the Backbone of Modern Power Systems" (IEA report summary)
4. Energy Storage News (pv magazine) – "Global grid-scale BESS deployment up by 38% year-on-year through October"
5. Energy Storage News (pv magazine) – "Global BESS demand jumps 51% in 2025 as installations top 300 GWh"
6. Sustainability Atlas – "Trend watch: Battery chemistry & next-gen storage materials in 2026"
7. Yale Environment 360 – "Beyond Lithium: New Battery Tech Starts to Break Through"
8. MDPI (Batteries Journal) – "Solid-State Lithium Batteries: Advances, Challenges, and Future Perspectives"
9. Nature Energy – Kronemeyer et al., "Challenges and trends in automotive battery recycling"
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