Global energy storage capacity could hit 741 gigawatt-hours (GWh) by 2030, an astonishing threshold that would be driven by compound annual growth of 31%, according to a new assessment by Wood Mackenzie that shows the United States accounting for almost half of the global total.

In a separate assessment, analysts at IHS Markit see the average cost of lithium-ion batteries dipping below the US$100-per-kilowatt threshold in the next three years, with the potential to fall as low as $73/kWh by the end of the decade, Utility Dive reports.

While storage “is still a relatively new market,” with obstacles still in place that make it tougher to compensate owners for the value of their storage capacity, “utilities are increasingly including battery storage in their procurement,” the U.S.-based industry newsletter adds. While the COVID-19 pandemic and the economic woes it has produced might delay some investment decisions, the fundamental need to shift electricity markets has not changed, said Rory McCarthy, a principal analyst with WoodMac’s energy storage team.

“If anything, the transition may be accelerated as governments around the world grapple with how to recover their economies more sustainably than in the past, with upside for the energy storage industry,” he said in a statement.

While global storage deployments this year are down 17%, or 2 GW, compared to pre-pandemic projections, “growth will likely accelerate in the late 2020s, to enable increased variable renewable penetration and the power market transition,” McCarthy added. “Utility resource planning is anticipated to play a large role, given the policy-driven shift towards renewables and storage in the last couple of years,” Utility Dive adds.

The IHS Markit report has the cost of lithium-ion batteries continuing to fall, after plummeting 82% since 2012, based on material costs, manufacturing costs, and energy density.

“As battery costs have fallen quickly, and will continue to do so, the combination of batteries with renewables is beginning to be cost-competitive, and stand-alone batteries are also starting to compete with conventional resources to provide the crucial grid services that help to keep the grid stable,” the agency’s associate director of clean technology and renewables, Sam Wilkinson, told Utility Dive.

But Peter Miller, western region director for climate and clean energy at the Natural Resources Defense Council, said regulatory barriers are still slowing down the shift. “There’s a complicated interplay of federal and state and local regulatory frameworks that need to be navigated to get there ,” he said. “It would be helpful to the system if we could improve the price signals, the economics of those installations, and compensate them.”