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Supply shocks highlight strategic role of battery energy storage systems

Disruptions to global energy flows triggered by the conflict involving the US, Israel and Iran, now in its eighth week, have underscored the growing strategic importance of battery energy storage systems, as countries face supply risks and heightened market volatility.

Shipping through the Strait of Hormuz has effectively ceased following US/Israeli attacks on Iran on Feb. 28, increasing uncertainty around a key chokepoint that carries roughly one-fifth of global oil and liquefied natural gas trade.

The crisis has reinforced that energy security depends not only on diversifying supply sources but also on building resilient energy systems, with battery storage systems emerging as a critical component to enhance grid flexibility and stability.

As global investment in renewable energy accelerates, the variability of electricity generation is increasing the need for effective supply-demand balancing.

Battery storage systems address this challenge by storing excess electricity during periods of low demand and supplying it when needed, supporting both energy security and the transition to cleaner energy systems.

According to the International Energy Agency, global battery storage capacity is projected to increase 14-fold by 2030 compared with 2023, reaching around 1,200 gigawatts, with investments expected to rise by 400%.

– Growing strategic importance

Can Tutasi, chairman of Türkiye’s Energy Storage Systems Association, told Anadolu that renewable energy, with its variable output, requires complementary storage systems.

“Electricity generated from renewable sources can be stored and later fed back into the grid, ensuring continuity of supply,” Tutasi said.

He noted that recent geopolitical developments have made the strategic value of battery technologies more visible, reflected in market reactions.

Following the onset of tensions between the US, Israel, and Iran, the market valuations of major Chinese battery manufacturers rose by around 20%, corresponding to approximately $70 billion, Tutasi said.

“This rapid rise demonstrates just how strategic battery technologies have become at a time when energy supply security has once again come to the forefront,” he said.

Tutasi added that the battery supply chain has not yet faced major disruptions but warned that risks remain. “There are no bottlenecks in the supply chain at the moment, but that does not mean they will not occur in the future.”

– Türkiye’s storage build-up

Türkiye is among the countries prioritizing battery storage to mitigate energy supply shocks. According to London-based energy think tank Ember, Türkiye leads Europe in battery projects aimed at strengthening grid security as renewable capacity expands, with 33 gigawatts of storage capacity allocated.

The country’s electricity system is undergoing a structural shift as renewable capacity expands, with generation becoming increasingly distributed through resources such as rooftop solar installations, electric vehicles and storage systems deployed at different scales.

This transition is moving the system away from a fully centralized model and increasing the need for advanced management of grid flexibility and stability.

Tutasi said that as renewable capacity grows in Türkiye, system management has become more critical.

“Regulatory groundwork for storage was laid in 2022, installations are underway, and the first battery-backed systems were commissioned in 2025,” he said.

He noted that the country has allocated around 33,000 megawatts of storage capacity, with applications exceeding this level by roughly tenfold, reflecting strong investor interest.

This year will be a turning point as projects move from administrative approval to investment and commissioning, with around 2,000 to 3,000 megawatts expected to come online, he stated.

He added that progress has been faster in solar-linked storage projects and is expected to accelerate further as wind projects begin operation.

“A 65% increase in installed electricity capacity is expected by 2035 compared to last year, and more than half of this growth is targeted to come from renewable sources. To achieve this goal, the implementation of battery storage systems is essential,” he noted.

– Technology and investment flows

Tutasi said foreign investors, particularly from China and Europe, are eyeing Türkiye, with interest ranging from project development to equipment supply and direct investment.

He highlighted Türkiye’s geographic position between Europe, where renewable capacity is rapidly expanding, and the Middle East, where production is still largely based on conventional sources.

The country’s location creates opportunities in battery technologies and facilitates technology transfer.

He noted that global battery production is concentrated in East Asia and said efforts are underway to transfer knowledge and technology to Türkiye, with domestic battery cell production initiatives already in progress.

Tutasi also stressed that software is a key differentiator in modern energy systems.

“Manually managing the numerous components in the network is no longer feasible. There is a need for advanced software,” he said, adding that domestically developed software is being exported.

He noted that European restrictions on certain foreign software have created new opportunities for Türkiye, accelerating local development and value creation in the sector.

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