Published on December 7th, 2016 | by Joshua S Hill0
Corporate Energy Storage Investment Reaches $660 Million In Third Quarter
December 7th, 2016 by Joshua S Hill
New figures from GTM Research has revealed corporate investment in the energy storage sector reached an all-time high in the third quarter, totaling $660 million and bringing the annual cumulative total up to $812 million.
GTM Research, in tandem with the Energy Storage Association (ESA), published its most recent US Energy Storage Monitor on Tuesday, based on data from the US energy storage market’s corporate investment movements for the past quarter. According to disclosed venture funding and private financing, corporate investment in the energy storage sector for the third quarter reached $660 million, bringing the yearly total up to $812 million.
Disclosed Corporate Investments in Energy Storage, 2010-Q3 2016
“Financing activities in this most recent quarter are noteworthy not just because of the scale, but also because project financing made up a significant portion of the total,” said Ravi Manghani, GTM Research’s director of energy storage. “While one quarter alone doesn’t constitute a trend, growth in project financing, especially in the residential segment, is a harbinger for further strengthening of deployment business models.”
The largest deal made in the third quarter was the $300 million in project financing for Tabuchi Electric, provided by the Electric & Gas Industries Association. Advanced Microgrid Solutions also closed a hefty deal in the quarter, with a $200 million project financing arrangement completed with Macquarie Capital.
As for deployment, a total of 16.4 megawatts (MW) of energy storage was deployed in the third quarter, a 75% drop on the same quarter a year earlier, due primarily to a decline in ‘Front of the Meter’ deployments which declined 96%, with no projects above 1 MW brought online in the quarter for the first time since the second quarter of 2014. ‘Behind the Meter’ deployments for the third quarter actually narrowly beat out the third quarter in 2015, and accounted for 86% of total MW deployed in the third quarter.
However, despite the lackluster third quarter, GTM Research believes the sector will finish strong, with several ‘Front of Meter’ projects slated to come online in December. Specifically, GTM predicts the US annual energy storage market will grow to 260 MW, up from 226 MW in 2015.
US Annual Energy Storage Deployment Forecast, 2012-2021E (MW)
“In 2016 we are seeing a critical trend in energy storage deployment — a wider range of competitive applications is becoming available to storage systems, and as a result demand for longer-duration systems is increasing,” added Matt Roberts, executive director of the Energy Storage Association. “Measured in megawatt-hours, the industry is projected to grow by more than 284 percent by the end of the year, reflecting a broader set of applications, an increase in distributed storage systems, and a larger role in grid reliability like the Aliso Canyon procurements.”
Finally, GTM Research is predicting that the US energy storage market will grow from 226 MW in 2015 to over 2 gigawatts (GW) by 2021. Further, the ‘Behind the Meter’ sector will grow from accounting for 15% of the market, to almost 25% in 2016, up to nearly half in 2021.
However, GTM did warn that the “pending White House administration change” might modify the outlook “if the incoming administration puts forward regressive policy measures in 2017.”