2017 was one of the most exciting years yet for energy storage, as several markets saw formative policy developments, interesting business models materialize and a rush of corporate merger and acquisition activity. And according to some analysts, 2018 will see China surpass all markets, with exception of the US, when it comes to energy storage.
A recent report from GTM Research says that the first quarter of 2017 set the record for most megawatt-hours deployed in any given quarter in the U.S., with a total of 234 MWh of storage deployments. The bulk of these deployments went toward the fulfillment of California Public Utilities Commission’s expedited procurement to meet capacity needs stemming from the Aliso Canyon facility’s shutdown. Taken as a whole, the remaining three quarters of 2017 collectively deployed less storage in the US was installed in the first quarter, but 2017 was still a big year for US energy storage.
According to GTM Research, the biggest reason for this market momentum was the renewed diversity in storage efforts from various state markets. Massachusetts and New York enacted laws to set energy storage targets. Several other states initiated legislative and regulatory efforts to incorporate energy storage in grid-planning activities, while a few others made strides in energy storage procurement requests and contracts. The biggest of these developments took place in Arizona and California. Arizona utilities issued plans for almost 600 MW of energy storage in their resource planning, only to be recently overshadowed by Arizona Corporate Commission’s more ambitious energy modernization plan that calls for 3,000 MW of energy storage.
The authors of the report noted that while the US is expected to remain the leading market from 2018 through 2022, China will surpass all markets besides the US to become the second-largest market in 2019; it will maintain this spot through 2022. Several markets will see continuous refinement of policy and market mechanisms to encourage energy storage on several fronts – renewable integration, time-of-day-based PPA structures, competitive market redesigns, retail rate reforms, urban and remote microgrids, and distributed resources for grid services and as virtual power plants. As a result of these initiatives and energy storage system improvements, the annual global energy storage market will be 8.6 GW and 21.6 GWh by 2022.
In March, Navigant Research issues a report saying the global energy storage for the grid and ancillary services (ESGAS) industry is projected to deploy 1,220.7 MW of new capacity, growing to 29,300.5 MW by 2027.The growth of energy storage is expected to continue following the increasing development of renewable generation. Many countries have recently seen significant growth in renewable generation, but energy storage has yet to take hold. This is expected to change in the coming years as energy storage system (ESS) prices continue to decline and project developers gain experience efficiently building, integrating, and monetizing ESSs alongside renewable plants.
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