The US energy storage project pipeline has doubled in 2018, reaching an impressive 32.9 gigawatts (GW), according to the latest US Energy Storage Monitor published this week, providing what the authors describe as a “clear signpost” that energy storage in the United States is the bullish new technology for developers.
The US Energy Storage Monitor was published on Thursday by Wood Mackenzie Power & Renewables and the Energy Storage Association (ESA), revealing that US energy storage deployments in the third quarter rose 44% year-over-year — which is even more impressive than it sounds, when you consider that deployments in the third quarter of 2017 had increased by 46%. Specifically, the United States saw a total of 61.3 megawatts (MW) deployed in the third quarter, with behind-the-meter deployments accounting for 57% of the total, experiencing a 198% year-over-year growth.
US Q3 2018 deployments in megawatts
In terms of megawatt-hours (MWh) deployed in the third quarter, the quarter actually saw a quarterly decline, down 15% to 136.3 MWh deployed. Conversely, MWh as compared to the third quarter of 2017 increased by 220%, from 42.5 MWh. Behind-the-meter deployments accounted for 60% of total MWh deployed in the quarter, while front-of-the-meter MWh deployed were dominated by a single 8-hour project brought online in New York.
US Q3 2018 deployments in megawatt-hours
“Just over a year has passed since ESA, on behalf of our members, announced the industry vision of deploying 35 GW of new energy storage by 2025,” said Kelly Speakes-Backman, CEO of ESA. “With today’s recognition of the nearly 33 GW pipeline of US storage projects, we have proof of the industry’s commitment to realizing our collective vision, which is projected to bring with it the creation of more than 167,000 new jobs, reduced emissions, and $4 billion in cumulative operational cost savings, among other benefits.”
“Developers in markets across the entire country are seeing the raw economic potential that energy storage can provide, and they’re trying to get their foot in the door in key interconnection territories prior to FERC Order 841 mandated changes going into effect,” added Dan Finn-Foley, senior energy storage analyst with Wood Mackenzie. “Outside of the raw megawatt numbers, 2018 saw proposed projects or utility investment from Alabama to the Dakotas, from the Carolinas to Nevada, and everywhere in between. With everything energy storage can do there really is no US market that isn’t emerging as an opportunity.”
California remained the leading energy storage market in the United States across all sectors — residential, non-residential, and front-of-the-meter. Hawaii was third in residential and second in non-residential, while New York was third in non-residential and second in front-of-the-meter.
Front-of-meter deployments were down 14% in the third quarter as compared to the same quarter a year earlier when measured in megawatts, yet were up 178% year-over-year when measured in megawatt-hours. The authors of the report explain that more long-duration projects are being brought online for services such as capacity and load-shifting. This is a shift on previous trends which normally saw projects brought online for frequency regulation, which generally have less than 1-hour discharge durations.
The behind-the-meter segment — made up of residential and commercial energy storage deployments — was down 24% from the second quarter of 2018, but was nevertheless the second-strongest quarter on record.
By the end of 2018, Wood Mackenzie expects 338 MW and 686 MWh of energy storage to be deployed in 2018, and continue to see increases before eventually reaching annual deployments in the range of 3.8 GW by 2023. Wood Mackenzie also expects the market to be worth $4.5 billion in 2023, doubling in value between 2018 and 2019, and then again from 2019 to 2020.
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