The emergence of renewable energy sources and the decarbonisation of the grid will require new energy storage facilities in the coming years to provide flexible energy and capacity. In addition to increasing shares of solar and wind power in the electricity mix, the US will see increased installation of energy storage, as storage is critical to ensuring more solar and wind power generation.
America has the potential to see 100 gigawatts (GW) of new energy storage deployed by 2030, the US Energy Storage Association (ESA) said in a new White paper this month.
That is an ambitious goal, given that in its previous estimate of 2017, ESA projected 35 GW of energy storage – including batteries, thermal, mechanical and pumped storage hydro – installed by 2025.
The ambitious 100-GW target of new energy storage is achievable if supportive policies and emerging policies continue to remove barriers to market participation, the trade association says.
“Significant growth ahead”
“With the right policies and regulatory frameworks in place, we believe that the realization of 100 GW of new storage facilities by 2030 is completely reasonable and achievable. Current market projections indicate remarkable growth for energy storage over the coming decade, and their role expands to maintain and improve the reliability, resilience, stability and affordability of electricity in the coming decades, sei Kelly Speakes-Backman, CEO of ESA.
All estimates point to the exponential growth of energy storage facilities over the coming decade.
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The most recent US Energy Storage Monitor from Wood Mackenzie Power & Renewables and the ESA shows that a total of 523 MW of energy storage was deployed in the United States. This year, the storage facility is set to double to nearly 1.2 GW, despite the coronavirus crisis that has changed and challenged energy markets and business plans. In 2025, the energy storage commitment is set to reach 7 GW, which represents six-fold growth compared to the new storage facilities in 2020.
Policy support
Supporting legislation would be one of the key growth factors for energy storage deployment, which could create at least 200,000 jobs directly associated with the expanding energy storage market – almost a threefold increase from current levels, ESA said in has report.
These legislative initiatives could be Congress introducing an investment tax credit (ITC) for stand-alone storage facilities, the trade association says. State-level promises for decarbonization of networks, expansion of solar and wind generation, and standards for clean energy would also be used for energy storage.
“A supportive policy framework and a vibrant clean energy economy would drive the growth of energy storage and set a trajectory to reach the 100 GW storage target by 2030,” says ESA, noting that seven states have set deployment targets totaling approximately 11 GW of new storage by 2035, and that more than US $ 1 billion in energy-specific incentives have been made available in six states, with several more states boosting storage.
Utilities and businesses are using more energy storage
The other major growth factors include the fact that utilities are now planning and preparing for energy storage in their resource planning, and companies in various sectors are increasingly seeking to deploy sustainable + battery storage on site to cut their electricity bills.
A growing number of utilities in the United States include storage in their integrated resource planning (IRP). According to ESA, more than
80 percent of IRPs from 2018-2019 researched storage in their models, and more than 20 GW of storage is economically selected in IRPs by 2040.
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For example, El Paso Electric, a regional electric utility in the Rio Grande Valley, plans to expand solar energy and utilize battery storage with a 100-MW solar power supply combined with 50 MW battery storage in Otero County, New Mexico, and a stand-alone battery storage facility of 50 MW in Canutillo, Texas.
Businesses are also increasingly looking to use solar-plus storage to access cheaper electricity.
Technology Infrastructure Technology Company Switch and asset management company Capital Dynamics broken ground last month about what they described as the largest solar-plus-battery project behind the meter in the world.
The ‘Gigawatt 1’ project will use thousands of solar panels made by American company First Solar, and battery storage with Tesla Megapack made in Storey County, Nevada.
“This project also ensures that Switch’s energy costs in the 5 cents remain a KWh range and Switch clients continue to do so for decades, with cheap, 100% sustainable power,” said Adam Kramer, Switch EVP of Strategy, said.
The energy costs would be several cents lower than what Switch would pay to buy electricity from the local utility NV Energy, which would save Switch tens of millions of dollars a year, Katherine Blunt of The Wall Street Journal writes.
“Our goal is to run round the clock on green electrons,” Kramer told the Journal.
As an example of sustainable business practices and care for the environment, companies have a good financial incentive to install solar-plus battery on site.
Beer Maker Sierra Nevada Brewing Company installed in 2018 in Chico, California, a Tesla Powerpack battery system to help it better use the energy it produces. The Powerpack calculates when energy demand is low, and then steps in when demand jumps.
With the battery system, Sierra Nevada has cut its energy costs from US $ 50,000 to below US $ 10,000 per month, sustainability manager Mandi McKay told the Journal.
This year, several U.S. companies are expected to install 220 MW of storage at or near their locations by 2020 – and this annual rate of deployment is set to quadruple by 2029, Ricardo Rodriguez, research analyst at Guide House Insights, told the WSJ.
Businesses and utilities are beginning to realize that energy storage could help them cut costs and adapt to the pressure to clean energy in many U.S. states. Combined with the right incentives and policies, America could witness a boom in energy storage in the coming decade.
By Tsvetana Paraskova for Oilprice.com
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