The U.S. energy storage industry installed a record quantity of power capacity in the first quarter of 2019.
The 148.8 megawatts of new grid storage capacity represented a 232% growth over Q1 2018, according to the most recent edition of the Energy Storage Monitor report created by Wood Mackenzie Power & Renewables and the Energy Storage Association. The ESM monitors storage concerning instantaneous power capacity (megawatts) in addition to energy capacity (megawatt-hours).
Historically, the first quarter tends to be the tiniest of the year for storage action, however, Q1 2019 narrowly edged from the previous quarter of 2016 for the title of the majority of megawatts deployed.
The preceding record came during the Aliso Canyon procurements, where California fast-tracked battery growth to react to a grid crisis. The new record came out of business as usual, as more states pursue storage technology to deliver rapid-fire ancillary providers, shift solar power for nighttime consumption and supply local capacity without local emissions.
“People are putting projects in the ground,” explained ESA CEO Kelly Speakes-Backman in a meeting. “We’re seeing state policy engagement and general awareness by the states. It’s not just about incentives, it’s about beginning to address long-term regulatory frameworks.”
This original achievement sets up the industry for another record year. Founded in 2019 will over double 2018, and 2020 deployments will triple 2019, Woodmac analysts forecast. The five-year forecast culminates in 4,543 megawatts delivered in 2024, a more rapid rise compared to the scope of the market now.
That forecast rose 4 percent compared to last quarter's accounts, as a result of significant procurements announced in Florida along with Hawaii.
In terms of dollar evidence, the general value of this U.S. storage economy is predicted to double this year to almost $1 billion. It increases to $4.837 billion in 2024, analysts forecast.
Surprise champions in Q1:
New Jersey. The Garden State assembled almost half of the quarter’s utility-scale megawatts, thrusting it to the rankings of high marginal markets, at least briefly.
Behind-the-meter-storage. Customer-sited batteries made up almost half of all megawatts deployed this quarter, and over fifty percent of all megawatt-hours.
Commercial and industrial storage. This subset of behind-the-meter storage place up a personal best, providing 44.9 megawatts and 108.7 megawatt-hours at Q1. After a collection of on-again, off-again quarters, C&I revealed it could grow for two quarters in a row.
Megawatts vs. megawatt-hours. In general energy capacity, measured in megawatt-hours, dropped 23 percent compared to the preceding quarter as megawatts deployed rose. This reflects shorter length projects coming online throughout the recent quarter, due to an unusual preponderance of systems aimed for fast-response grid solutions.
Florida. The analysts included Florida to the ranks of nations they break out separately for storage investigation. The Sunshine State includes a heating-up residential marketplace plus also a 409 megawatt procurement by utility Florida Power & Light, announced in March.
Why so large?
Battery supply constraints hit the sector hard in the second half 2018, thanks in large part to a sudden surge in demand for capacity in the South Korean marketplace that lowered the volume of cells available for export. The bottleneck pushed some jobs forwards into 2019, leading to the unusually busy first quarter.
Geographical diversity assisted. In preceding years, single niches like PJM or California regularly dominated quarterly deployments. The two of the early leaders had been silent this year, but the joint efforts of New Jersey, New York, Arizona and Massachusetts maintained the count high.
That’s just on the utility-scale side. The behind-the meter section played a significant role that quarter, with 60% of megawatt-hours. Within that class, C&I won out using twice as much energy capacity as the residential business. This marked the first time because Q2 2017 the C&I economy grew for two successive quarters.
“I think we may observe continued steady growth in that sector,” Speakes-Backman stated of the section. “The story is getting out about the way that it is able to decrease peak demand. ”
What has built?
One of the utility-scale projects that are possible to track separately, New Jersey headed the quarter with just two 20 megawatt/ 20 megawatt-hour jobs that Viridity developed to participate in PJM’s frequency law marketplace.
Those jobs bucked the trend in that market, which was the hotspot for U.S. storage action, but quieted down after rule changes decreased the payment battery crops could make.
“It’s going to be very interesting to determine if they really have deciphered the code on such PJM economy,” stated Daniel Finn-Foley, a chief analyst covering energy storage at WoodMac plus a coauthor in the report. “We haven’t noticed significant jobs in PJM because, actually, 2015, when the economy went through that major shift. ”
New York also posted a 20-megawatt system for frequency law. Arizona usefulness Salt River Project completed a 10 megawatt/ 40 megawatt-hour standalone storage project, providing it instant spot for energy capacity.
Finn-Foley cautioned against reading too deeply to the quarterly results as they are nevertheless based on a few jobs, given the early stage in the industry’so growth.
“Because there are so few jobs going in quarter to quarter, one project happening in late March versus April can completely alter the quarterly results,” Finn-Foley stated. “As we scale up, this ’s going to be less and less the case. ”
After the growth expected this year, 2020 will likely be when energy storage proceeds against”a nascent market to a market at scale,” he further added.
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