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Smart grids lead to record energy storage in USA

Steve Rogerson
June 20, 2017

The first quarter of 2017 was the biggest quarter in history for the US energy storage market, according to GTM Research and the Energy Storage Association’s (ESA) latest US Energy Storage Monitor.
About 234MW-hours of energy storage were deployed in the first quarter, which represents more than fiftyfold growth year-over-year.
When measured in megawatts, it was the third-largest quarter in history, only behind the fourth quarters of 2015 and 2016. Front-of-meter deployments grew 591 per cent year-over-year, boosted by a few large projects in Arizona, California and Hawaii.
“Much of this growth can be attributed to a shift from short-duration projects to medium- and long-duration projects in the utility-scale market, along with a surge of deployments geared to offset the Aliso Canyon natural gas leak,” said Ravi Manghani, GTM Research’s director of energy storage. “Although, the industry shouldn’t get too comfortable, as with fulfilment of Aliso Canyon deployments, there aren’t that many 10+ megawatt-hour projects in the 2017 pipeline, indicating that the first quarter may be the largest quarter this year.”
In all, front-of-meter energy storage represented 91 per cent of all deployments for the quarter.
The behind-the-meter market segment, which is made up of residential and commercial energy storage deployments, declined 27 per cent year-over-year in megawatt-hour terms. The report attributes the slowdown to a pause in California’s self-generation incentive programme.
California will remain the undisputed king of the US storage market over the next five years. Arizona, Hawaii, Massachusetts, New York and Texas will all battle for second place, with each market forming a significant chunk of deployments through 2022, at which point GTM Research forecasts the US annual market to reach 2.6GW, and 7.2GW-hours.
Among the key findings was that 71MW of energy storage was deployed in Q1 2017, growing 276% over Q1 2016. And 233.7MW-hours of energy storage were deployed in Q1 2017, an increase of 944% from the same quarter last year.
Front-of-the-meter deployments grew 591% from Q1 2016 in MWs, boosted by a few large projects in Arizona, California and Hawaii. Behind-the-meter deployments dropped 32% year-over-year in MWs, much of which can be attributed to declines in California’s behind-the-meter market as players awaited the opening of the new self-generation incentive programme regime.
GTM Research expects the US energy storage market to grow to roughly 2.6GW in 2022, almost 12 times the size of the 2016 market. By 2022, the US energy storage market is expected to be worth $3.2bn, a tenfold increase from 2016 and a fivefold increase from this year. Cumulative 2017-2022 storage market revenues will be $11bn.
Delivered quarterly, the US Energy Storage Monitor contains research on energy storage markets, deployments, policies and financing in the USA. These reports provide energy industry professionals, policymakers, government agencies and financiers with consistent, actionable insight into the burgeoning US energy storage market.
GTM Research, a division of Greentech Media, provides market analysis in the form of research reports, data services, advisory services and strategic consulting.
The ESA is the national trade association for the energy storage industry whose mission is to promote, develop and commercialise competitive and reliable energy storage delivery systems for use by electricity suppliers and their customers. ESA members represent a diverse group of entities, including electric utilities, energy service companies, independent power producers and technology developers deploying batteries, flywheels, compressed air energy storage, thermal storage, pumped hydropower, super-capacitors and component suppliers.