TODAY’S STUDY: THE U.S. BATTERY ENERGY STORAGE MARKET
U.S. Energy Storage Monitor Q2 2015
September 2015 (GTM Research)
Largest Quarter for Energy Storage Since Q4 2012
• 40.7MW of energy storage was deployed in Q2 2015, a nine-fold increase from Q2 2014, and sixfold increase from Q1 2015.
• Behind-the-meter market continued its strong showing of previous quarters, and grew over eleven times from same period last year.
• Front-of-meter market also had its best quarters since Q4 2012 when the 36 MW Notrees project was interconnected (which incidentally will be repowered with lithium-ion batteries, as announced this quarter).
Behind-the-Meter Segments on an Upward Trend
• The residential storage market grew 61% in Q2 2015 vs. Q1 2015. However, it still was the smallest of three segments, and accounted for only 1% of Q2 2015 deployments.
• Q2 2015 was the largest quarter yet for nonresidential segment, beating the previous best in Q4 2014 by 13%.
• The utility-scale (front-of-meter) segment accounted for 87% of the market, which shows the disparity between the two sectors. Q2 2015 was a quarter where both behind-the-meter segments had meaningful growth.
• Market-specific deployment data is provided in the full report.
Top Energy Storage Markets’ Cumulative Deployments Since Q1 2013
U.S.: Legislation introduced in Senate for national renewable energy target and for grid modernization
• PJM and California exchange the number 1 and 2 spots in utility-scale and non-residential cumulative deployments since Q1 2013. Collectively, these markets have deployed 137 MW of the 156 MW deployed in the last 10 quarters (88% combined market share).
• California is the largest residential and non-residential market, and accounts for 62% and 77%, respectively, of the total deployed storage in these segments.
• Utility-scale deployments are just as concentrated among these two markets. Other markets such as Hawaii, Texas and New York have had more than 20 MW of utility-scale energy storage deployments prior to Q1 2013, and hence do not show up in the top 3.
Front-of-the-Meter Policy and Market Developments, Q2 2015
Oregon: State legislature passed a bill mandating storage procurement targets for utilities; ODOE announced RFP for an energy storage demonstration project Washington: State legislature passed the Clean Energy Fund 2 to provide funds for modernization of state grid.
Arizona: TEP will select a developer in 2015 for an RFP released for a 10 MW storage system
Texas: Bill offering ad valorem tax benefits for large-scale energy storage amended to specifically include only compressed-air energy storage
California: CPUC DRP applications filed in July;; also held hearing and divided scope of Energy Storage Procurement Framework into two tracks;; SCE issued an RFP to procure between 2 MWh and 8 MWh of storage. CAISO issued ESDER and DERP initiatives to develop market rules and increase participation of DERs
PJM: In discussion to modify RegD dispatch rules;; FERC approved capacity performance proposal
Massachusetts: DOER committed $10 million to energy storage initiative;; State Senate initiated a proceeding to determine utility energy storage procurement targets
Minnesota: State legislature introduced bills to promote in-state manufacturing of energy storage technology
New York: PSC issued NY REV to require utilities to submit DER-focused demonstration projects;; NYSERDA issued financial awards for storage technology prototypes;; PSEG Long Island issued an RFP to address capacity constraints
Space NASA: Issued technology roadmaps including a provision for research to improve energy storage systems
Behind-the-Meter Policy and Market Developments, Q2 2015
U.S.: Legislation introduced in Senateto create microgrids in isolated communities
New York: PSC NY REV proposals include behind-the-meter projects;; NYSERDA issued $83.3 million for microgrid feasibility studies;; also offered up to $50,000 incentive for solar - plus-storage under NY-SUN;; PSEG Long Island issued RFP to address capacity constraints and an RFI for T&D system relief;; Con Edisonpursuing residential VPP pilot project under NY REV
California: CPUC’s SGIP program has provided upfront incentives to 10.1 MW of behind-the-meter storage and reserved funding for an additional 91.2 MW;; SGIP also modified to increase system performance requirements and increase project extensions;; also initiated residential rate reform and pursuing net-zero action plan for residential homes;; CAISOissued ESDER and DERP initiatives to develop market rules and increase participation of DERs
Hawaii: HECO instituted an investigation of distributed energy resource policies, including residential time-of-use electricity pricing pilot
New Jersey: BPU issued Straw Proposal for FY 2016 Renewable Electric Storage Incentive Program
Arizona: APS announced up to $1 million in rebates for solar-plus-storage pilot program, in addition to potential residential non- volumetric charges that could impact storage
Maryland: Energy Administration started making awards through Demand Response & Building Automation grants
Massachusetts: DPU issued anticipatory regulatory framework for time-of-use electricity pricing
Minnesota: State Legislature introduced bills to promote in-state manufacturing of energy storage technology
Oregon: ODOE announced RFP for an energy storage demonstration project
New State Markets Opening Doors for Energy Storage
2015 on Path to Be the Biggest Year Yet for Energy Storage
• We expect significant growth in the U.S. energy storage market over the next five years across all sectors, resulting in an 858 MW annual market in 2019 –13 times the size of the 2014 market, and four times the size of 2015 market. • 2015 will see rapid growth, with 220 MW deployed and each segment more than doubling on an annual basis, with a further upside in non-residential segment, but a significant downside to utility-scale segment.