Energize Weekly, September 12, 2018
The U.S. energy storage market added 61.8 megawatts (MW) in the second quarter of 2018, a 42 percent increase over the first quarter, as demand for customer-owned batteries continued to grow, according to the Wood Mackenzie U.S. Energy Storage Monitor.
Market growth year-over-year was up 60 percent, “thanks in large part to strong growth in residential deployments as customers continue to exhibit increased interest in self-consumption and resilience,” the report said.
The behind-the-meter market, including residential and non-residential, made up 75 percent of installations on a per megawatt basis in the second quarter.
Measured by storage capacity, the growth was even stronger, rising 200 percent year-over-year to 156.5 megawatt-hours in the second quarter.
Wood Mackenzie forecasts the storage market growing to $541 million in 2018 and reaching more than $1 billion in 2019. The market is projected to more than double between 2018 and 2019 and then double again between 2019 and 2020.
By 2023, the market will reach 3.9 MW a year and $4.6 billion in market value, according to Wood Mackenzie.
The Wood Mackenzie report noted that the second quarter of 2017 was “particularly low” as it followed the installation of nearly 100 MW of energy storage in Southern California to ease grid pressures created by the problems at the Aliso Canyon natural gas storage facility.
The two utilities in the country with the most storage are Southern California Edison with 56.2 MW and San Diego Gas & Electric with 45.3 MW, according to the Smart Electric Power Alliance’s (SEPA) “Energy Storage Snapshot.”
Still, after the two quarters when the Aliso Canyon projects came online, the second quarter of 2018 is the biggest quarter on record. “This mainly resulted from a rebound in the non-residential market and continued strength of the residential market,” the Mackenzie Wood report said.
From 2016 to 2017, annual residential capacity by MW grew 202 percent to 13 MW, while non-residential capacity was up 9 percent, according to SEPA’s market snapshot. Utility-scale projects still accounted for the bulk of storage, 144 MW, in 2017.
The alliance, a non-profit working with utilities on renewable energy and storage issues, said the snapshot is based on data and surveys from 137 utilities representing 83 million customer accounts, about 58 percent of all customer accounts in the country.
California continues to lead in residential storage systems with the number of installations growing to 1,211 in 2017 from 182 in 2016.
In the second quarter of 2018, California led the way in residential installations, followed by Hawaii, according to the Wood Mackenzie report.
“Nationally, the storage market is quite nascent,” Nick Esch, co-author of the SEPA snapshot, said in a statement. “However, state policy action and regulatory action are creating opportunities in local energy storage markets. Hawaii and California are the leading markets today, but Maryland, Massachusetts, New Jersey, New York and Nevada will not be behind for long.”
Among the notable utility-scale initiatives, Wood Mackenzie said, are Arizona Public Service’s announced plan to add 106 MW of storage, NV Energy’s $2 billion plan for solar-plus-storage in Nevada, and Xcel Energy’s announced plan to procure 275 MW of solar with storage in Colorado by 2022.
