U.S. energy storage market is on the rise
For years battery costs prohibited the development of many energy storage projects. Times are changing. By one account, storage system costs dropped by roughly two-thirds in the last five years. Analysts at IHS Markit predict lithium-ion costs (currently the most common battery choice for storage) will fall below $200/kWh by 2019, and some claim Li-ion has reached that price point already.
Last year, grid-connected storage successfully surpassed the 1-GWh mark with no signs of slowing down. In fact, GTM Research expects the U.S. storage market to nearly double that figure in 2018, with more than 1,000 MWh of energy storage forecast to deploy this year. (For more findings, check out GTM and the Energy Storage Association’s new report, “U.S. Energy Storage Monitor 2017 Year in Review” at tinyurl.com/EnergyStorageMonitor).
Power companies are taking notice. For example, Siemens and AES Corporation recently partnered to form Fluence Energy, a storage product, engineering and services company. As one of its first tasks, Fluence says it will supply the world’s largest Li-ion battery-based storage project, a 100-MW, 400-MWh facility in Long Beach, California, that will serve Southern California Edison and Western Los Angeles.
GE has also joined the storage market and recently launched the GE Reservoir, a flexible and modular energy storage platform for AC or DCcoupled systems. The Reservoir can enhance electric grid operations by seamlessly integrating renewables or balancing loads for supply and demand. GE says the Reservoir generated a 20-MW, 80-MWh pre-launch commitment.
Utility-scale storage is only one portion of the market, however. Demands for residential and commercial battery-based storage projects, including solar+storage, are also rising rapidly. This part of the market grew by 79% last year, found GTM Research.
“We’re going to have to strike the word ‘nascent’ from our vocabularies when describing the U.S. energy storage market,” said Ravi Manghani, GTM’s director of energy storage. “Falling costs and favorable policies will be among the core drivers of the market’s breakout 2018. It’s not hard to imagine that every solar RFP (request for proposal) by the end of the year will include storage.”
The Energy Storage Association points to the unanimous landmark decision by the Federal Energy Regulatory Commission—which opened U.S. wholesale power markets to energy storage that’s on par with generators and other electric grid resources—and expects it to lay the foundation for greater adoption of storage in the U.S. wholesale market.
Inclusive policies and falling system costs are encouraging signs of a productive industry. It will be interesting to follow the market and see what storage can do in 2018.
Your ESN editors,