• Global storage capacity to double by 2025, lifting demand for lithium, phosphorus, and manganese

• BESS sector could account for 20% of battery market by 2030

• Shift to LFP batteries weakens outlook for cobalt and nickel in energy storage

With their crucial role in the energy transition, demand for critical minerals has surged in recent years. While the electric vehicle market remains one of the most substantial consumers, other sectors such as energy storage are gradually asserting their presence.

As of 2024, energy storage installations have reached a total capacity of 200 GWh globally, a 53% increase year-on-year, according to research firm Rho Motion. Given the burgeoning growth of these systems amid the global energy transition, this emerging market could significantly impact global demand for critical minerals.

Battery Energy Storage Systems (BESS) increasingly support the development of renewable energies amid the energy transition. Thanks to dedicated batteries, these systems store electricity for use during high demand or low production periods. These technologies rely on various types of batteries, each necessitating different critical minerals.

For instance, lithium-ion batteries require lithium, nickel, cobalt, and graphite, whereas lithium-iron-phosphate (LFP) batteries also use lithium and sodium-ion batteries incorporate manganese. According to the International Energy Agency, these minerals are "fundamental tools" in energy storage systems.

Market forecast to be worth $114 billion by 2030

Rho Motion predicts another surge in the number of energy storage installations in 2025, with a total installed capacity of 400 GWh expected. Meanwhile, Mordor Intelligence projects a compound annual growth rate (CAGR) of 14.31% for the market, which should be valued at $114 billion by 2030, up from $58 billion in 2025.

These dynamics are expected to drive strong demand for BESS batteries. According to Rho Motion, the sector could represent about a fifth of the global battery market. This trend could greatly benefit several minerals already in high demand in energy storage systems.

Lithium, 9% of whose global demand is currently accounted for by energy storage technologies, is particularly well-positioned. In its Global Critical Minerals Outlook 2025 report, the IEA explains that "energy storage will start to drive a significant increase in lithium demand."

Similarly, total demand for graphite is projected to exceed 10 million tons by 2035, largely driven by energy storage. However, while the emergence of BESS systems bodes well for many critical minerals, the trend looks different for some.

Declining interest in cobalt and nickel

While minerals like lithium, graphite, and manganese stand to gain from the growth of energy storage, cobalt and nickel seem left behind. This trend is attributed to manufacturers' growing preference for lithium-iron-phosphate (LFP) batteries, which don't require cobalt or nickel. In 2024, these batteries accounted for 87% of energy storage installations, up from an already significant 83% the previous year, according to Rho Motion.

"We have seen a truly monumental decrease in the intensity of nickel and cobalt use in battery demand," said Martin Jackson, a raw materials consultant at London-based commodities advisory firm CRU.

However, this does not signify a broad decline in demand for cobalt and nickel. Energy storage still constitutes a minority share of the global battery market, 80% of which is dominated by the electric vehicle (EV) industry, according to the IEA. This sector remains a significant outlet for lithium-ion batteries containing nickel and cobalt, particularly NMC (nickel-manganese-cobalt) models.

Regardless, Africa, which holds about 30% of the world's critical mineral reserves, stands to benefit from these dynamics. The continent, primarily owing to the Democratic Republic of Congo, is the main supplier of cobalt and represents 11% of the world's lithium production, according to the IEA. Moreover, it is a significant contributor to the global graphite and manganese market.