Global Battery Capacity Set to Soar, But Safety Gaps Threaten Clean Energy Progress

As global battery energy storage capacity is projected to reach 7.3 TWh by 2035, the World Bank warns that safety must become a core priority to prevent fires, explosions, and operational failures that could undermine the clean energy transition. The report urges governments, development partners, and private investors to strengthen regulations, adopt advanced safety technologies, and improve emergency preparedness to ensure reliable and sustainable battery deployment worldwide.

Battery energy storage systems (BESS) are becoming a critical part of the global clean energy transition, helping countries integrate solar and wind power while improving grid reliability. According to a new World Bank report, global energy storage installations are expected to reach a record 92 GW (247 GWh) in 2025, up 23% from 2024, while total installed storage capacity could rise to 2 TW (7.3 TWh) by 2035.

However, the rapid expansion of battery storage is also creating new safety challenges. Past incidents involving fires, explosions, and thermal runaway events in countries such as the United States, South Korea, Australia, China, and the United Kingdom have highlighted the risks associated with large-scale battery deployment. These incidents have led to costly outages, equipment damage, emergency evacuations, and concerns about public safety.

The report, prepared by World Bank experts and drawing on research from organizations including the International Energy Agency (IEA), International Electrotechnical Commission (IEC), National Fire Protection Association (NFPA), BloombergNEF, and South Korea's Ministry of Trade, Industry and Energy (MOTIE), stresses that safety must remain a top priority as storage markets grow worldwide.

Key Lessons for Governments and Regulators

The report finds that battery incidents are rarely caused by a single failure. Instead, they often result from a combination of technical faults, weak monitoring systems, poor installation practices, environmental factors, and regulatory gaps.

For governments, the findings underline the need for stronger regulations covering the entire battery lifecycle, including manufacturing, installation, operation, maintenance, recycling, and decommissioning. South Korea's experience offers an important lesson. After a series of battery fires between 2017 and 2019, the country introduced stricter standards and monitoring requirements, significantly improving safety performance.

The World Bank recommends that countries adopt international standards such as IEC 62933, UL 9540, and NFPA 855 while adapting them to local climate conditions, grid requirements, and deployment models. Clear permitting, inspection, and emergency response requirements can reduce risks and improve investor confidence.

Economic Impact and Opportunities for Investors

Battery storage is increasingly viewed as a key enabler of renewable energy growth, helping reduce dependence on fossil-fuel-based backup generation and supporting energy security. However, major safety incidents can have significant financial consequences, including project shutdowns, asset losses, higher insurance costs, legal liabilities, and delayed investments.

The report notes that the industry has already made significant progress. Since 2022, most new utility-scale projects have shifted toward lithium-iron-phosphate (LFP) batteries, which are more thermally stable than older nickel-manganese-cobalt (NMC) systems. Developers are also adopting modular, containerized designs with better fire separation and fault isolation features.

For private-sector stakeholders, these trends create opportunities in advanced battery management systems, fire detection technologies, predictive analytics, safety testing, insurance services, and emergency response solutions. Companies that prioritize safety and quality assurance are likely to gain a competitive advantage as investors increasingly evaluate projects based on risk management and operational reliability.

What Development Partners Should Focus On

The report highlights a growing role for multilateral development banks, donor agencies, and climate-finance institutions in promoting safe battery deployment. As storage projects become a major component of energy transition programs, development partners can support governments through regulatory reforms, technical assistance, workforce training, and emergency preparedness programs.

Looking ahead, the World Bank identifies several priorities, including faster gas-detection systems, improved ventilation technologies, stronger thermal barriers, advanced battery management systems, and dedicated safety standards for emerging storage technologies and second-life batteries. It also calls for better data sharing across projects and stronger monitoring of battery degradation as systems age.

The report concludes that battery storage will be essential for achieving climate and energy-access goals, but its long-term success will depend on embedding safety into every stage of project development. For policymakers, development institutions, and investors alike, safe battery deployment is not just a technical requirement—it is a strategic necessity for building reliable, resilient, and sustainable energy systems.