The U.S. energy storage market continued its rapid expansion in the third quarter of 2018, and new state storage incentives and mandates and FERC Order 84 have doubled the country’s pipeline of projects to a record-setting 33 gigawatts. But battery supply constraints, slower than expected progress by some utilities, and new fire codes in the key market of California are headwinds facing the industry through this and next year.
These are some of the key data points from the U.S. Energy Storage Monitor released this week by Wood Mackenzie Power & Renewables and the Energy Storage Association (ESA), which reported 61.3 megawatts and 136.3 megawatt-hours of storage deployed in the third quarter of the year. These are slightly below the second quarter’s figures, but nearly twice the scale of projects reported from the same quarter last year.
And the types of projects being deployed has shifted over the past year as well. For example, the third quarter’s front-of-meter, utility-scale battery projects were down 14 percent year-over-year when measured in terms of their megawatt power ratings. But in terms of megawatt-hours – how long they can provide their rated power capacity – the projects deployed in the third quarter were up 178 percent compared to the same quarter last year.
This is largely because, unlike the short-duration frequency regulation projects that have made up the lion’s share of historical front-of-meter deployments, more recent projects are starting to tackle longer-duration challenges such as providing capacity and load shifting. Four-hour systems are becoming the norm for front-of-meter projects, the report noted.
In terms of sheer duration of storage deployed, 2018 hasn’t yet caught up to the records set by the massive Aliso Canyon procurements in California during late 2016 and early 2017. But a host of policy and market developments are setting the stage for faster storage growth, such as Arizona’s continued push into solar-plus-storage projects, Xcel Energy’s plan for 275 megawatts of batteries to support nearly 2 gigawatts of wind and solar power, or NV Energy’s plan for 100 megawatts of storage to accompany more than a gigawatt of new solar.
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