Battery Storage Boom Reshapes Grid Software Demand

Record 108 GW Global Battery Deployment in 2025 Accelerates Grid Storage Management Software Adoption Worldwide

Global battery storage deployment shattered previous records in 2025, with 108 gigawatts (GW) of new capacity added worldwide — a 40% increase over 2024 and a level of annual growth that now exceeds the historical peak for gas-fired power capacity additions of approximately 107 GW recorded in 2002. According to the International Energy Agency's Global Energy Review 2026, installed battery storage capacity is now eleven times higher than in 2021, with lithium iron phosphate (LFP) chemistry accounting for approximately 90% of 2025 deployments, up from a share well below 50% just five years earlier. 

This unprecedented scale-up of physical storage infrastructure is fundamentally reshaping demand for the software and control systems required to operate, dispatch, and monetise these assets. The global Grid Storage Management Market, which encompasses the site control software, fleet optimisation platforms, and managed services used to operate battery storage fleets, sits directly downstream of this deployment wave, with Next Move Strategy Consulting (NMSC) valuing the market at USD 2.8 billion in 2025 and projecting expansion to USD 18.4 billion by 2035 at a compound annual growth rate (CAGR) of 21.0% between 2026 and 2035.

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According to the IEA, utility-scale battery storage accounted for approximately 87 GW, or roughly four-fifths, of total 2025 additions, while behind-the-meter installations by commercial and residential consumers made up the remainder. China led global deployment for the sixth consecutive year, accounting for approximately 60% of global additions, followed by the United States and Europe, while Australia and Saudi Arabia recorded the fastest year-on-year growth rates among major markets.

The regulatory architecture underpinning this deployment surge is well established in the largest markets. In the United States, the Federal Energy Regulatory Commission's Order 841, which mandated that electric storage resources be permitted to participate in capacity, energy, and ancillary service markets, continues to expand the addressable market for grid storage software by enabling revenue-stacking strategies that require sophisticated dispatch platforms. In the European Union, the Battery Regulation and the Clean Energy Package establish technical and interconnection standards that similarly mandate advanced management software for grid-connected storage assets.

NMSC's analysis of the Grid Storage Management Market indicates that Software Platforms represented the dominant offering segment at USD 1.68 billion in 2025, with Site Control Software — encompassing battery management systems, energy management systems, plant controllers, and SCADA and monitoring tools — commanding the largest sub-segment share due to its non-discretionary role in asset safety and regulatory compliance. Virtual Power Plant (VPP) platforms represent the fastest-growing software sub-segment, expanding at a projected CAGR of 22.9% from 2026 to 2035, as aggregation of distributed energy resources scales across flexibility markets.

Beyond regional deployment patterns, the IEA's analysis identifies a structural shift in how battery assets are being used, a trend with direct implications for the software architectures that Grid Storage Management vendors must support. Energy shifting — the use of storage to move electricity across time and meet peak system needs — has become the dominant application, while the relative share of projects targeting ancillary services alone has declined even as absolute deployment volumes continue to grow.

Global Battery Storage Application Mix, Share of New Projects, 2015 vs. 2025

Notes: Energy shifting refers to storage used to move electricity across time, including provision of reliable capacity for peak demand. Ancillary services refers to grid support functions such as frequency regulation and operating reserves. Figures do not sum to 100% as congestion management and other applications constitute the remainder.

This shift toward multi-hour energy shifting is directly increasing the complexity — and value — of dispatch optimisation software, a trend NMSC's research links to accelerating adoption of AI-native platforms. Vendors including Stem, Inc. and Fluence Energy, Inc. have embedded proprietary machine-learning dispatch engines that the NMSC report indicates can outperform rule-based dispatch strategies by 15% to 25% in revenue capture at utility-scale installations.

Battery Storage Capacity Additions, Selected Markets, 2024 vs. 2025

Regionally, NMSC's Grid Storage Management Market assessment identifies North America as the largest market at USD 0.96 billion in 2025, projected to reach USD 6.1 billion by 2035 at a CAGR of 20.4%, supported by Inflation Reduction Act incentives and the region's deep utility-scale storage pipeline. Asia-Pacific is identified as the fastest-growing region at a CAGR of 22.8%, driven by China's national storage deployment mandates, India's Ministry of Power co-location requirements, and Australia's grid modernisation initiatives under the Australian Energy Market Operator's Integrated System Plan.

Recent corporate developments underscore the intensifying competitive dynamics within the Grid Storage Management vendor landscape. In June 2026, Wärtsilä Corporation announced a strategic joint venture with Germany's RCT Solutions to consolidate its global energy storage business and pursue vertical integration in battery-storage production. That same month, GE Vernova introduced GridOS for Transmission, a unified intelligence platform integrating real-time operations, forecasting, and system stability management for increasingly decentralised grids, while Schneider Electric launched a battery-agnostic "cell-to-grid-to-cell" battery energy storage system platform at its Innovation Summit India 2026.

Wood Mackenzie's Global Head of Grid Transformation, Ben Hertz-Shargel, has noted that batteries are becoming an essential resource for data centres reliant on onsite gas generation, given that gas generators cannot respond quickly enough to the volatile demand patterns of AI-driven data centre operations. This observation reflects a broader convergence between electrification-driven demand growth and the strategic premium placed on flexible, software-optimised storage assets.

Bottom Line

The Grid Storage Management Market is positioned for sustained structural expansion, projected by NMSC to grow from USD 2.8 billion in 2025 to USD 18.4 billion by 2035 at a 21.0% CAGR, directly tracking the record 108 GW of global battery storage capacity added in 2025 as documented by the IEA. Growth is anchored by utility-scale deployment momentum in China, the United States, and Europe, alongside rapid emerging-market acceleration in Australia, Saudi Arabia, and India. Opportunities are concentrated in AI-native dispatch optimisation, virtual power plant orchestration, and long-duration storage management software, while performance-based commercial models are reshaping vendor revenue structures. Key risks include cybersecurity compliance burdens under NERC CIP and NIS2 frameworks, integration complexity with legacy utility SCADA systems, and battery supply chain exposure to geopolitical disruption. For investors, the market's recurring subscription and performance-based revenue profiles, combined with durable regulatory tailwinds across major electricity markets, present an attractive long-term capital allocation thesis within the broader energy transition and grid modernisation investment cycle.

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