Utilities' Energy Storage
by Sarah Golden
As companies and states pursue aggressive decarbonization goals, the pressure to find a cost-effective storage solution is mounting.
A growing number of companies are deploying on-site energy storage, usually paired with solar. Commercial and industrial behind-the-meter storage just had its best quarter yet, reaching 44.9 megawatts of capacity in Q1.
But C&I buyers aren't driving the growth in storage. Utilities are, with massive energy storage deployments and announcement becoming more common. In fact, the United States just became the world’s largest grid-connected energy storage market, and researcher Wood Mackenzie’s Energy Storage Monitor shows that Q1 2019 was the best quarter for deployments, with 148.8 megawatts coming onto the grid.
Projections show utility energy storage deployments are just getting started; they're expected to double in 2019 and triple in 2020.
Utility energy storage is growing like gangbusters
Utilities have been announcing 100+ MW energy storage plans at an impressive clip over the last six months:
Pacific Gas & Electric (PG&E) gained approval from the California Public Utilities Commission for four energy storage projects, totaling 567.5 MW, to replace a gas plant in South San Francisco late last year.
Reason: A policy priority from regulators to shift from natural gas to clean energy sources for flexible capacity.
Reason: A policy that sought to grow capacity during the peak demand period, between 3 and 9 pm.
Reason: Energy reliance, as the town relies on just one power line (and no backup source), which is susceptible to falling tree branches in storms.
Reason: Peak shaving applications.
Reason: Cost-effective option to reduce emissions.
Reason: Meet increasing energy demands in the oil-field operations in the Permian Basin.
As was the case with renewable energy, the increase in storage deployments, favorable policies and falling cost of technologies are sure to continue to bring down costs and spur on financial models that work for more use cases.
That means more businesses soon could be thinking about energy storage as a key tool to reach 100 percent renewable goals, especially as more companies consider how to match clean energy loads with demand.
"We expect to see larger corporate off-takers looking to storage as a means to achieve cleaner energy that matches their facilities’ load profiles and add resilience attributes," Ravi Manghni, head of energy storage at Wood Mackenzie, said in an email.
Manghni pointed out that Google and Microsoft already have made moves in this direction, and Kaiser Permanente signed a combined wind, solar and storage contract with Nextera last year.
Here Comes the Sun: Solar Plus Storage Energy Solutions Get Competitive by Daniel Rothberg, GreenBiz, 6/25/18
Can Smarter Solar Inverters Save the Grid? by Benjamin Kroposki, IEEE Spectrum, 10/20/16
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