The rapid growth of energy-intensive sectors like 5G, AI data centers, electric vehicles, and renewables is placing unprecedented pressure on global power grids. As electricity demand and grid complexity rise, energy storage has transitioned from a supportive role to a critical piece of infrastructure. Alongside the lithium battery cell market, cybersecurity—particularly for power control systems (PCS)—is gaining prominence as companies navigate both technical and geopolitical challenges.
While reducing reliance on China for lithium battery cells may take time, given that China's lithium iron phosphate (LFP) cells hold over 80% of the global market share, security concerns are pushing global players to diversify component sourcing. Cybersecurity concerns have become as crucial in energy storage as in PV inverters, with regional politics now playing a major role in component selection based on customer location and project specifications.
Delta Electronics, a major player in power control systems, collaborates with prominent battery and energy storage companies worldwide, including Samsung SDI, LG Chem, Panasonic, BYD, CATL, and Powin, among others. Delta reports that these partnerships span multiple international markets, aligning with the growing demand for secure, locally-sourced storage solutions.
To address growing cybersecurity needs, energy storage providers are also strategically sourcing components, particularly PCS and PV inverters, to meet specific client security requirements in different regions. In the US, Europe, and Japan, for example, clients increasingly specify component origin, leading Taiwanese energy storage companies to frequently partner with Delta for PCS components due to Delta's international reputation and influence.
Most Taiwanese energy storage companies focus on module assembly, system integration, and end-to-end software-hardware solutions while maintaining reliance on Chinese suppliers for battery cells in the short term. However, sourcing for specific components is becoming more tailored to meet regional project needs. As domestic battery production expands in Taiwan through firms like Formosa Smart Energy, Taiwan Cement, Foxconn, and Cold Electric, collaboration with local suppliers is expected to increase to align with customer expectations.
Bloomberg New Energy Finance forecasts a 21% annual growth rate for the global energy storage market through 2030, projecting a total of 137GW by that time. Tesla alone saw its energy storage business grow by 130% year over year in the first half of 2024, signaling that demand for renewables and energy storage now outpaces that of electric vehicles.
With the rapid increase in renewable energy impacting grids worldwide, energy storage is garnering substantial interest for its potential to stabilize supply. The rise of power-hungry tech sectors will continue to challenge grids and boost the demand for secure and resilient energy storage solutions. As such, energy storage is emerging as a long-term, essential industry, though its growth path may see temporary disruptions due to regional policy shifts.
