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Liquid Air Energy Storage Market

The market for Liquid Air Energy Storage was estimated at $1.6 billion in 2025; it is anticipated to increase to $3.8 billion by 2030, with projections indicating growth to around $8.7 billion by 2035.

Report ID:DS2407007
Author:Chandra Mohan - Sr. Industry Consultant
Published Date:
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Energy & Power
Energy Storage
Liquid Air Energy Storage
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Report Summary
Market Data
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Table of Contents

Global Liquid Air Energy Storage Market Outlook

Revenue, 2025

$1.6B

Forecast, 2035

$8.7B

CAGR, 2026 - 2035

18.2%

The Liquid Air Energy Storage (LAES) industry revenue is expected to be around $1.6 billion in 2026 and expected to showcase growth with 18.2% CAGR between 2026 and 2035. This robust outlook underscores the growing strategic importance of the Liquid Air Energy Storage market as utilities and commercial operators seek reliable, long-duration energy storage systems to support renewable integration, grid stability, and the decarbonization of the power sector. Utility and Commercial end-use segments together account for 90.7% of current demand, reflecting strong adoption of grid-scale energy storage solutions that can deliver flexible power generation, peak shaving and load shifting, and improved industrial energy management. Standalone Type configurations dominated industry revenue with sales of around $1.18 billion in 2025, highlighting the preference for independent, utility-scale energy storage assets that can be sited close to demand centers, enhance network resilience, and complement existing generation portfolios.

Liquid Air Energy Storage is a cryogenic energy storage technology that converts surplus electricity into liquid air at very low temperatures, stores it in insulated tanks, and later regasifies it to drive turbines and regenerate power when needed. Key features such as high scalability, long storage durations, low land footprint, and the use of proven industrial equipment make these systems well suited for utility-scale energy storage, integration of variable wind and solar resources, backup power for commercial and industrial facilities, and support for transmission and distribution networks. Recent trends driving demand include the emergence of bankable project pipelines, increasing policy support for long-duration storage, growing interest in hybrid configurations that combine LAES with batteries or hydrogen, and the deployment of pilot and early commercial plants near industrial clusters to capture waste heat and cold, thereby improving overall round-trip efficiency and project economics.

Liquid Air Energy Storage market outlook with forecast trends, drivers, opportunities, supply chain, and competition 2025-2035
Liquid Air Energy Storage Market Outlook

Market Key Insights

  • The Liquid Air Energy Storage market is projected to grow from $1.6 billion in 2025 to $8.7 billion in 2035. This represents a CAGR of 18.2%, reflecting rising demand across Grid Balancing, Renewable Energy Integration, and Peak Shaving.

  • Sumitomo Heavy Industries, MAN Energy Solutions, and Highview Power are among the leading players in this market, shaping its competitive landscape.

  • U.S. and UK are the top markets within the Liquid Air Energy Storage market and are expected to observe the growth CAGR of 17.5% to 25.5% between 2025 and 2030.

  • Emerging markets including India, Brazil and South Africa are expected to observe highest growth with CAGR ranging between 13.6% to 18.9%.

  • Transition like Transition to Renewable Energy is expected to add $510 million to the Liquid Air Energy Storage market growth by 2030.

  • The Liquid Air Energy Storage market is set to add $7.1 billion between 2025 and 2035, with manufacturer targeting Commercial & Industrial Application projected to gain a larger market share.

  • With

    increased demand for sustainable energy solutions, and

    Advanced Grid Infrastructure, Liquid Air Energy Storage market to expand 432% between 2025 and 2035.

liquid air energy storage market size with pie charts of major and emerging country share, CAGR, trends for 2025 and 2032
Liquid Air Energy Storage - Country Share Analysis

Opportunities in the Liquid Air Energy Storage

Liquid Air Energy Storage provides dispatchable, long-duration energy storage that stabilizes wind- and solar-heavy grids and strengthens renewable energy integration across Western Europe. Transmission utilities seek non-flammable, low-impact options for peak shaving and frequency regulation, making LAES systems attractive versus lithium-ion and pumped hydro. Standalone LAES for grid-scale storage should also grow most rapidly in this region, supported by global revenue increasing from $1.18 billion in 2025 to $2.64 billion by 2030 and fostering utility–OEM collaboration on large plants.

Growth Opportunities in Europe and Asia Pacific

In Europe, Liquid Air Energy Storage is emerging as a preferred grid-scale energy storage and long-duration energy storage option, with utility end-use expected to hold the highest relevance due to deep renewable integration targets and the need for firm, dispatchable low-carbon capacity. Top opportunities include positioning utility-scale storage projects to provide flexibility services and capacity in liberalized power markets, retrofitting or repurposing existing thermal generation sites with cryogenic energy storage, and co-locating Liquid Air Energy Storage with offshore wind hubs to smooth intermittency and enable peak shaving. Competitive dynamics are shaped by strong incumbency of lithium-ion batteries in short-duration applications and pumped hydro in legacy markets, opening a niche for Liquid Air Energy Storage developers that can demonstrate superior performance for long-duration and high-cycle use cases, especially where land and water constraints limit alternatives. Key regional drivers include stringent decarbonization policies, the need to stabilize increasingly volatile wholesale prices, and transmission bottlenecks that make locational renewable energy storage a strategic asset for utilities and large grid operators.
In Asia Pacific, Liquid Air Energy Storage is poised for rapid adoption in industrial energy management and industrial decarbonization, with industrial end-use likely to be the most relevant segment given the concentration of energy-intensive clusters in steel, chemicals, and refining, alongside constrained urban grids. Top opportunities lie in integrating Liquid Air Energy Storage with industrial waste-heat sources, port and LNG infrastructure, and captive power plants to deliver long-duration energy storage that can shave peaks, reduce reliance on gas peakers, and enhance on-site energy security. Competition is intensifying from gas-fired flexibility, advanced battery chemistries, and emerging thermal storage solutions, but Liquid Air Energy Storage can be differentiated through high-roundtrip efficiency when coupled with process heat, low environmental footprint, and scalability for both on-grid and behind-the-meter deployments. Core regional drivers include rapid growth in variable renewable generation, policy-driven diversification away from imported fossil fuels, and the need for resilient, modular renewable energy storage systems that can support the broader energy transition across industrial parks, special economic zones, and urban load centers.

Market Dynamics and Supply Chain

01

Driver: Rising Renewable Energy Deployment and Increasing Demand for Long-Duration Energy Storage Solutions

A primary driver for the liquid air energy storage market is also the rapid expansion of renewable energy capacity combined with the growing need for long-duration energy storage. As solar and wind installations increase globally, grid operators face intermittent supply challenges, creating a demand for scalable storage technologies like LAES that can also store energy for hours or even days. Additionally, long-duration storage addresses the mismatch between generation and consumption, particularly during periods of low renewable output. These trends encourage utilities and energy developers to invest in LAES systems capable of storing surplus electricity efficiently and releasing it on demand. Technological advancements in cryogenic air liquefaction, heat recovery, and energy-efficient compressors further enhance storage efficiency, making LAES a viable and attractive solution for renewable-heavy grids seeking stability, flexibility, and sustainable energy integration.
Technological innovation in cryogenic storage systems is also another key market driver. Modern LAES systems employ advanced liquefaction processes, high-efficiency turbines, and integrated heat recovery to maximize round-trip efficiency and energy output. These developments allow operators to scale storage capacity according-to demand and provide rapid energy dispatch when required, making LAES suitable for grid balancing and peak shaving applications. Enhanced system modularity and automation also reduce operational costs and maintenance requirements. The combination of improved efficiency, operational flexibility, and compatibility with renewable energy sources is also increasing LAES adoption across utilities, industrial users, and energy service providers worldwide.
02

Restraint: High Capital Costs and Infrastructure Requirements Limit Commercial Deployment of LAES Projects

One of the main restraints for liquid air energy storage is the high upfront capital cost and complex infrastructure requirements. Building LAES plants requires significant investment in cryogenic liquefaction equipment, large‑scale storage tanks, and integrated heat recovery systems. These costs can deter utilities and developers, especially compared with established storage technologies like pumped hydro or lithium‑ion batteries. For example, some planned LAES facilities have been delayed or scaled back due to financing challenges, reducing near‑term project pipelines and slowing revenue growth for technology providers in the market.
03

Opportunity: Hybrid LAES for hyperscale data centers in North America and Industrial decarbonization storage for steel and cement clusters in China

North American hyperscale operators increasingly require carbon-neutral backup power and grid-interactive flexibility, positioning LAES as an alternative to diesel generators. Hybrid LAES plus battery architectures provide fast response, multi-hour backup, microgrid resilience, and capacity-market participation. This data center application is poised for strong growth as operators value cryogenic energy storage safety, negligible local emissions, and low degradation. Hybrid LAES in North American facilities is expected to grow fastest, reinforced by collaborations among cloud providers, utilities, and technology developers.
China’s heavy industrial clusters are adopting Liquid Air Energy Storage to decouple furnaces, kilns, and other processes from volatile grid supply and support industrial decarbonization. Co-located LAES systems absorb off-peak power, use process waste heat recovery, and deliver low-carbon electricity during price spikes. Hybrid LAES integrated with onsite renewables is expected to grow fastest in this segment, with global hybrid revenues rising from $0.46 billion in 2025 to $1.15 billion by 2030 and addressing untapped demand in coastal manufacturing hubs.
04

Challenge: Lower Round‑Trip Efficiency Compared to Competing Energy Storage Technologies Reduces Appeal

Another restraint is the relatively lower round‑trip energy efficiency of LAES systems compared to alternatives such as lithium‑ion batteries or pumped storage. Although LAES offers long‑duration storage and scalability advantages, its efficiency typically ranges below other storage options, meaning more energy is lost during the liquefaction and expansion cycle. This can influence demand where efficiency metrics are prioritized, such as in frequency regulation or short‑duration peak shaving. As a result, some grid operators hesitate to adopt LAES, preferring higher‑efficiency storage solutions that deliver stronger performance in revenue‑critical applications, which limits LAES market expansion.

Supply Chain Landscape

1

Cryogenic Equipment Supply

Sumitomo Heavy Industries Ltd.MAN Energy SolutionsChart Industries
2

Long-Duration Storage Systems

Highview PowerSOLVENO TECHNOLOGIESMAN Energy Solutions
3

Liquid-Air Energy Storage

Highview PowerSumitomo Heavy Industries Ltd.Chart Industries
4

Grid-Scale Applications

Utility-scale power utilitiesRenewable energy developers
Liquid Air Energy Storage - Supply Chain

Use Cases of Liquid Air Energy Storage in Grid Balancing & Renewable Integration

Grid Balancing : In grid balancing applications, LAES systems play a critical role in stabilizing electricity supply and demand fluctuations. LAES plants store excess electricity by cooling air to a liquid state and then expand it to generate power when needed. Utilities and grid operators deploy these systems to smooth out frequency variations, manage voltage levels, and maintain consistent power delivery. The advantage of LAES lies in its scalability and long-duration energy storage capability, allowing operators to balance intermittent supply from various sources without relying solely on conventional fossil-fuel backup systems, improving overall grid reliability.
Renewable Energy Integration : Liquid air energy storage is increasingly applied to facilitate renewable energy integration by storing excess electricity generated from solar and wind farms. During periods of low demand, surplus renewable energy is converted into liquid air, which can later be expanded to generate electricity when generation drops or demand spikes. End-users such as renewable energy developers and utility-scale operators benefit from LAES systems by reducing curtailment, enhancing grid flexibility, and maximizing the utilization of clean energy. The technology’s ability to store energy over long durations without geographic limitations makes it ideal for renewable integration projects.
Peak Shaving : LAES systems are effectively used for peak shaving, helping industrial and utility operators reduce peak electricity consumption and associated costs. By storing energy during off-peak hours and releasing it during high-demand periods, liquid air energy storage allows end-users to lower peak load on the grid and avoid expensive peak-rate charges. The system is particularly advantageous for heavy industrial consumers and commercial grids where demand spikes are frequent. Additionally, LAES technology provides rapid response capabilities and scalable energy release, making it a cost-efficient solution for managing peak loads while maintaining grid stability and operational efficiency.

Recent Developments

Recent developments in liquid air energy storage highlight growing adoption for grid balancing, renewable energy integration, and peak shaving. Key market trends include the deployment of long-duration energy storage systems that support intermittent solar and wind generation while enhancing grid stability. Companies are investing in cryogenic liquefaction technology, heat recovery systems, and modular storage designs to improve efficiency and scalability. These advancements enable utilities and industrial users to optimize energy management, reduce curtailment, and enhance operational flexibility in modern power grids.

November 2024 : INOX India Ltd secured a supply agreement with Highview Power to deliver five high‑pressure, vacuum insulated cryogenic tanks for the Carrington, UK LAES facility. This contract supports the first commercial‑scale long duration energy storage project in the UK using liquid air technology, boosting infrastructure supply chains and reinforcing Highview’s leadership in the LAES market.
December 2025 : Sumitomo Heavy Industries Ltd. alongside Hiroshima Gas Co., Ltd. successfully commenced commercial operations of their LAES demonstration plant at the Hatsukaichi LNG terminal. This partnership involved the design, construction, operation, and management of the facility, which uses LNG cold energy to improve LAES efficiency and contributes grid stability and renewable integration goals in Japan.
June 2024 : Highview Power raised £300 million from the UK Infrastructure Bank, Centrica, and a consortium of investors to advance construction of its Carrington liquid air energy storage plant in Manchester. The funding agreement accelerates deployment of large‑scale LAES systems for grid flexibility and renewable integration, marking a major financing achievement for long‑duration energy storage.

Impact of Industry Transitions on the Liquid Air Energy Storage Market

As a core segment of the Energy Storage industry, the Liquid Air Energy Storage market develops in line with broader industry shifts. Over recent years, transitions such as Transition to Renewable Energy and Greater Grid Flexibility have redefined priorities across the Energy Storage sector, influencing how the Liquid Air Energy Storage market evolves in terms of demand, applications and competitive dynamics. These transitions highlight the structural changes shaping long-term growth opportunities.
01

Transition to Renewable Energy

Driven by the global transition to renewable energy, the LAES market is evolving into a critical enabler of low‑carbon power systems, with this shift projected to contribute an additional $510 million to market growth by 2030. By converting surplus wind and solar generation into dispatchable capacity, LAES systems provide long-duration energy storage that strengthens grid stability and improves asset utilization. Their scalability and long-cycle life position LAES technology as a strategic alternative to fossil-fuel peaker plants, reducing curtailment and supporting renewable energy storage at utility-scale. As governments and utilities accelerate decarbonized power systems and seek flexible, zero-emission balancing resources, investment in LAES is expected to intensify, reinforcing its role at the core of future clean energy infrastructure.
02

Greater Grid Flexibility

The liquid air energy storage market is being reshaped by the growing need for grid flexibility and resilience. Rising adoption of electric vehicles and decentralized renewable energy systems has increased pressure on power grids to maintain a stable electricity supply. LAES technology addresses these challenges by storing excess electricity as liquid air and quickly releasing it during peak demand, providing rapid response and efficient energy discharge. Utilities and grid operators in Europe and North America are increasingly integrating LAES plants to manage load fluctuations and stabilize frequency. For example, renewable-heavy grids use LAES to store surplus wind or solar energy, reducing curtailment and ensuring consistent power delivery, demonstrating its critical role in modern energy infrastructure.