US Energy Storage Market May Grow 12× By End Of 2024 (Interview)

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The recent Wood Mackenzie Q4 2019 US Energy Storage Monitor report contains a number of insights about energy storage trends that many people may enjoy reading about. Energy storage in the United States has been growing steadily over the last 5-10 years, and this trend is an important one for a variety of reasons. Perhaps most importantly, it is solving the ‘intermittency problem’ which is the lack of solar power production at night and certain times of day, and lack of wind power production in periods of no or low wind. Another key aspect of energy storage is the potential capacity for utilities to use it to replace fossil-fuel peaker plants. There are other benefits as well. Daniel Finn-Foley, head of energy storage research at Wood Mackenzie, generously answered some questions about the report for CleanTechnica.

Daniel Finn-Foley (Image credit: Wood Mackenzie)

The US energy storage market may grow more than 12× from 2019 through 2024, according to the report. How much of this new growth will be residential and commercial and how much will be from utilities?

Over the next five years the FTM market will be the largest segment, accounting for almost 60% of new storage deployments.

US energy storage will be a $5.4 billion market in 2024, according to the report. Which energy storage companies stand to do well as the market expands over the next four years?

Without getting into speculative specifics, companies appear to be developing diverging strategies. In the FTM space in particular players are either focusing on specific markets, segments, or regions to differentiate themselves, or aiming for leadership across the board by leveraging existing expertise and scale. My personal prediction would be that companies with significant large-scale solar-plus-storage experience will be best positioned to capture revenue as that market surges.

Do you have any sense of how the considerable US energy storage market growth will impact renewable energy like solar power and wind power?

Storage and renewables have a reciprocal relationship, though for now with the storage industry so nascent it’s generally renewables deployments that are encouraging storage capacity, and then primarily through pairing with solar. As more renewables come online the potential to affect deregulated markets or require firm capacity will continue to drive storage, eventually scaling dramatically as 100% renewable mandates accelerate.

What practical benefits might result from a surge in new energy storage capacity, like demand reduction savings, decreasing blackouts, or public safety power shutoffs, etc.?

Utilities have already reported energy storage saving money, with solar-plus-storage out-competing existing resources and distributed storage in Green Mountain Power’s territory not only helped keep 1,100 homes powered during an outage but saved hundreds of thousands of dollars in capacity fees during peak hours over the past few years. While it’s harder to put a price tag on resiliency, backups, or safety, studies have shown that storage investment could provide billions of savings even in smaller markets.

California, Hawaii, and Arizona were energy storage leaders in Q3 2019. What were some of the reasons for success?

Storage has a diverse range of applications and this is reflected in the wide range of markets where it is finding footholds. In Hawaii and Arizona solar-plus-storage has been an accepted technology by leading utilities for years, and California’s suite of high-impact state policies have made the market one of the first success stories.

 The California Public Utilities Commission ordered 2-3 GW of new resources to meet capacity shortfall anticipated in Southern California. Is there any timetable for when this capacity might be installed?

Expect this capacity to come online soon, between 2021 and 2023, with installations front-loaded into 2021 if further studies refine expectations for the shortfall. Much, if not the vast majority, of this capacity is expected to be energy storage. Luckily the expedited Aliso Canyon energy storage procurements have given southern California utilities a blueprint for getting storage onto the grid quickly and effectively.

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Jake Richardson

Hello, I have been writing online for some time, and enjoy the outdoors. If you like, you can follow me on Twitter:

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