ORIGINAL REPORTING: A storage bubble?
A storage bubble? High investment in nascent industry sows fears of a battery bust; Market reforms and continued innovation will be needed to see storage reach its potential, experts say
HermanK. Trabish, Jan. 3, 2017 (Utility Dive)
Editor’s note: Battery storage continues to expand with no sign of a bubble.
Investment and interest in energy storage technologies has never been higher — too high, in fact, for the comfort of some analysts. The energy storage market added about 475 MWh in 2016, almost 300% more than 2015 numbers, but the attention it is getting from the financial community has all the makings of a bubble, according to GTM Research’s senior vice president Shayle Kann. A handful of policies and events have spurred investments in energy storage, particularly in California and the PJM Interconnect region, and companies like Tesla have brought batteries into the mainstream with sleek new products. But rising interest and investment didn’t necessarily manifest itself in actual deployments or regulatory approval.
Pacific Gas & Electric is under a mandate to procure 580 MW of storage by the end of 2020. But so far, only 70 MW of its first 76 MW in contracts were approved by the California Public Utilities Commission (CPUC). The commission rejected some contracts because they were not cost-effective. Storage is a more complex technology with a more complex value stream and utilities are still learning how understand and monetize that value stream and address cost-effectiveness, PG&E exec Steve Malnight told Utility Dive. But Tesla expects economies of scale to drive down energy storage prices to as low as $0.05/kWh by 2030, said Mateo Jaramillo, vice president of Tesla’s products and programs. Work remains to get the battery, the power electronics, and the mechanical and electrical systems down the cost curve. But, Jaramillo said, it is engineering work, not science work, and Tesla is doing that work… click here for more
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