In a famous children’s fable, a stuffed rabbit becomes real when its owner believes in it.
The nation’s utilities may now be similarly transforming battery energy storage.
The U.S. utility-scale battery storage installed capacity grew by another 221 MW in 2016 as costs continued to drop, according to a recent report from GTM Research and the Energy Storage Association.
More importantly, the sector last year doubled the amount of megawatt-hours (MWh) of battery capacity deployed compared to 2015.
This, analysts say, shows growth in the use of long-duration batteries and an increased confidence that the large energy storage facilities can be used to help manage peak demand.
“Growth remains steady, but 2016 was a turning point because the PJM frequency regulation market faded while demand for 4-hour duration storage capacity grew,” said report co-author Dan Finn-Foley, a GTM Research senior energy storage analyst.
The longer duration capacity growth was largely from California battery storage projects, Finn-Foley said. They were brought online in 2016 to address power grid needs created by the shutdown of the Aliso Canyon natural gas storage facility due to a methane leak in 2015.
Those batteries were rushed online to provide peak demand electricity that local power plants could not supply without natural gas from the Aliso Canyon facility. They represented 60 MW of the 221 MW added last year, but accounted for 168 MWh of the total 336 MWh deployed in 2016, according to Finn-Foley.
“With a 4-hour duration battery, a 20 MW energy storage system can deliver 80 MWh of capacity to meet a peak demand spike,” he said.
The fast deployment of those California grid-scale batteries — all sited, constructed and put into operation in nine months — has a number of analysts and sector insiders touting 2016 as a “turning point” for energy storage. But other say the true storage revelation is yet to occur as utilities discover how to better capture the multiple values of storage.
“The watershed event for energy storage will be when we can unlock multiple value streams from batteries,” said Stuart Laval, director of technology development at Duke Energy.
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