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Released May 15, 2017 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--"Energy storage" could be an answer to the rhetorical question often asked about renewable energy: "What happens when the sun doesn't shine and the wind doesn't blow?" But energy storage also was paired with gas-fired peaking plants to keep the lights on in Southern California last year after a leak shuttered the Aliso Canyon gas storage facility. And among non-utilities, demand is strong for residential and commercial energy storage projects, typically paired with a distributed energy resource (DER) like rooftop solar.
Energy storage projects come in all shapes and sizes. For utility-scale deployments, California is driving the market right now. A few years ago, the California Public Utilities Commission (CPUC) (San Francisco, California) instructed the state's three investor-owned utilities to procure 1,325 megawatts (MW) of cost-effective energy storage projects by 2020. Southern California Edison (SCE) (Rosemead, California), a unit of Edison International (NYSE:EIX) (Rosemead, California), and Pacific Gas & Electric (PG&E) (San Francisco, California), a subsidiary of PG&E Corporation (NYSE:PCG) (San Francisco, California), were required to acquire 580 MW of storage projects each by 2020. And San Diego Gas & Electric (SDG&E) (San Diego, California), a unit of Sempra Energy (NYSE:SRE) (San Diego, California), had to acquire 165 MW of storage projects by that date.
Last month, SDG&E announced that it had signed contracts for five storage projects totaling 83.5 MW. The company would not disclose the per-MW cost of those projects. With those contracts, the utility has nearly fulfilled its 165-MW mandate three years before the 2020 deadline.
The San Diego Union Tribune reported that PG&E has 225 MW of storage projects either in place or under development while SCE said it has signed contracts for 409 MW of storage, which it said is almost double the amount that was installed in the entire nation in 2015.
Other California utilities, including the Imperial Irrigation District (IID) (Imperial, California), also have deployed energy storage projects. And the trend is not limited to California: Industrial Info's North American Project Platform shows storage projects are under development in Idaho and Nevada as well as Arizona, Texas and elsewhere. The platform shows 15 active utility-scale storage projects with total investment value of $349 million. Many more are sure to come.
The U.S. energy storage market will experience strong demand growth for the next several years, predicted consultants at Greentech Media (Boston, Massachusetts). In the firm's first quarter 2017 Energy Storage Monitor report, it forecasts that U.S. storage capacity will rise from an estimated 260 MW in 2016 to 2,045 MW by 2021. Utility-scale deployments will account for roughly half of the market in 2021 while residential projects will garner about 30% of the market and the remaining 20% of the market will be deployed at commercial sites.
Click on the icon at right to see recent deployments of storage in the U.S. and a forecast of future deployments.
In its annual survey of utility solar generation, the Smart Electric Power Alliance (SEPA) (Washington, D.C.) has started tracking utilities that pair solar generation with energy storage. It's most recent survey of solar + storage utilities, released last month, includes California utilities (IID, SCE, PG&E and SDG&E) as well as utilities in Illinois, Ohio, Indianapolis and Arizona. SEPA surveyed 178 utilities and found that 43 added storage to their portfolios last year.
"The technology is rapidly improving and becoming more economic," said Brenda Chew, a research analyst at SEPA. "Overall, it's just seen as an important player for integrating higher levels of renewable (energy)."
Last year, consultants at McKinsey & Company (New York, New York) predicted storage costs would decline by 50% by 2020. Other firms also see sharply declining costs over the next few years.
"There's no doubt the storage market, while small now, is poised to grow sharply," observed Brock Ramey, Industrial Info's North American Power Specialist. "But there are some fire suppression challenges and concerns with some battery storage systems. Insurance companies are taking a very close look at that. We expect there will be technologies coming out in the next year to two that will address that issue."
Ramey continued: "I expect we will see storage technologies deployed in a number of different ways. We know some companies are looking at storage to complement renewable generation. Others are considering storage on the transmission & distribution side, to enhance grid reliability. Still others are thinking about pairing storage with internal combustion units and small gas turbines. And some are analyzing situations where storage could be paired with microgrid projects. It's a very dynamic market."
Utilities announce new electric storage projects virtually every day. Last month, Arizona Public Service Company (APS) (Phoenix), a unit of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix, Arizona), announced plans to add over more than 500 MW of energy storage projects over the next 15 years as part of its plan to reduce its reliance on coal-fired generation. For more on that, see May 2, 2017, article - Arizona to Surge Up Solar Power, Battery Storage in the Next 15 Years. Also in April, SCE and General Electric Company (NYSE:GE) (Boston, Massachusetts) unveiled the pairing of a 50MW gas turbine generator with a 10MW energy storage unit. That hybrid project will be deployed in Norwalk, California.
"Energy storage is expensive at this time, but as the market matures, costs will come down," Steven Greenlee, senior public information officer for the California Independent System Operator (CAISO) (Folsom, California), told Industrial Info in an interview. Most of the energy storage projects he has seen deployed in California have ranged between 20 MW and 30 MW, and one has been 40 MW.
Kevin Barker, an advisor at the California Energy Commission (CEC) (Sacramento, California), added: "We designed a state-wide procurement target large enough to drive the market without impacting negatively on (customers). There is no one size fits all solution when it comes to storage, but states and regions must go beyond renewables targets and recognize energy storage as a key element of a successful energy transition."
Storage is a win-win for the Power industry, and not just for the renewable energy developers, CAISO's Greenlee said. When the Aliso Storage natural gas storage facility was closed in 2016, SCE paired energy storage with gas-fired peaking plants to keep the lights on in Southern California. While acknowledging the pairing of energy storage and renewables has garnered a lot of media attention, he noted that pairing of storage projects with gas-fired generation "is what we're seeing in the market at the moment."
Greenlee said it was up to the market to decide if the optimal deployment of storage was to pair it with fossil-fueled generation to meet peak demand, or to enhance grid reliability, or to store electricity generated by wind turbines or solar panels. He added that battery storage is not the only way electricity could be stored. Concentrated Solar Power (CSP) plants, like the Ivanpah Solar Electric Generating Station in California and the Solana Solar Generating Station in Arizona, are designed to store solar-generated electricity for several hours after the sun goes down. Electric vehicles and rooftop solar are increasingly seen as types of energy storage, providing the proper infrastructure is in place. And hydroelectric pumped storage projects are a longstanding and prominent form of energy storage.
Carl Stills, vice president of storage integration with 8minutenergy Renewables (El Centro, California), said in an interview that some integrated photovoltaic solar/energy storage projects are cheaper that gas-fired generation.
Industrial Info's Ramey commented, "Electric storage in all its forms is one of the most powerful forces driving change in the Power industry. As was the case with renewable energy a generation ago, costs are high in the beginning. But I'm sure electric utilities and their customers will greatly benefit from ongoing research and early deployments. Someone has to be the first to go through the door, and the mandates enacted in California are expected to help create a market, which should drive down the costs of subsequent electric storage projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
Energy storage projects come in all shapes and sizes. For utility-scale deployments, California is driving the market right now. A few years ago, the California Public Utilities Commission (CPUC) (San Francisco, California) instructed the state's three investor-owned utilities to procure 1,325 megawatts (MW) of cost-effective energy storage projects by 2020. Southern California Edison (SCE) (Rosemead, California), a unit of Edison International (NYSE:EIX) (Rosemead, California), and Pacific Gas & Electric (PG&E) (San Francisco, California), a subsidiary of PG&E Corporation (NYSE:PCG) (San Francisco, California), were required to acquire 580 MW of storage projects each by 2020. And San Diego Gas & Electric (SDG&E) (San Diego, California), a unit of Sempra Energy (NYSE:SRE) (San Diego, California), had to acquire 165 MW of storage projects by that date.
Last month, SDG&E announced that it had signed contracts for five storage projects totaling 83.5 MW. The company would not disclose the per-MW cost of those projects. With those contracts, the utility has nearly fulfilled its 165-MW mandate three years before the 2020 deadline.
The San Diego Union Tribune reported that PG&E has 225 MW of storage projects either in place or under development while SCE said it has signed contracts for 409 MW of storage, which it said is almost double the amount that was installed in the entire nation in 2015.
Other California utilities, including the Imperial Irrigation District (IID) (Imperial, California), also have deployed energy storage projects. And the trend is not limited to California: Industrial Info's North American Project Platform shows storage projects are under development in Idaho and Nevada as well as Arizona, Texas and elsewhere. The platform shows 15 active utility-scale storage projects with total investment value of $349 million. Many more are sure to come.
The U.S. energy storage market will experience strong demand growth for the next several years, predicted consultants at Greentech Media (Boston, Massachusetts). In the firm's first quarter 2017 Energy Storage Monitor report, it forecasts that U.S. storage capacity will rise from an estimated 260 MW in 2016 to 2,045 MW by 2021. Utility-scale deployments will account for roughly half of the market in 2021 while residential projects will garner about 30% of the market and the remaining 20% of the market will be deployed at commercial sites.
Click on the icon at right to see recent deployments of storage in the U.S. and a forecast of future deployments.In its annual survey of utility solar generation, the Smart Electric Power Alliance (SEPA) (Washington, D.C.) has started tracking utilities that pair solar generation with energy storage. It's most recent survey of solar + storage utilities, released last month, includes California utilities (IID, SCE, PG&E and SDG&E) as well as utilities in Illinois, Ohio, Indianapolis and Arizona. SEPA surveyed 178 utilities and found that 43 added storage to their portfolios last year.
"The technology is rapidly improving and becoming more economic," said Brenda Chew, a research analyst at SEPA. "Overall, it's just seen as an important player for integrating higher levels of renewable (energy)."
Last year, consultants at McKinsey & Company (New York, New York) predicted storage costs would decline by 50% by 2020. Other firms also see sharply declining costs over the next few years.
"There's no doubt the storage market, while small now, is poised to grow sharply," observed Brock Ramey, Industrial Info's North American Power Specialist. "But there are some fire suppression challenges and concerns with some battery storage systems. Insurance companies are taking a very close look at that. We expect there will be technologies coming out in the next year to two that will address that issue."
Ramey continued: "I expect we will see storage technologies deployed in a number of different ways. We know some companies are looking at storage to complement renewable generation. Others are considering storage on the transmission & distribution side, to enhance grid reliability. Still others are thinking about pairing storage with internal combustion units and small gas turbines. And some are analyzing situations where storage could be paired with microgrid projects. It's a very dynamic market."
Utilities announce new electric storage projects virtually every day. Last month, Arizona Public Service Company (APS) (Phoenix), a unit of Pinnacle West Capital Corporation (NYSE:PNW) (Phoenix, Arizona), announced plans to add over more than 500 MW of energy storage projects over the next 15 years as part of its plan to reduce its reliance on coal-fired generation. For more on that, see May 2, 2017, article - Arizona to Surge Up Solar Power, Battery Storage in the Next 15 Years. Also in April, SCE and General Electric Company (NYSE:GE) (Boston, Massachusetts) unveiled the pairing of a 50MW gas turbine generator with a 10MW energy storage unit. That hybrid project will be deployed in Norwalk, California.
"Energy storage is expensive at this time, but as the market matures, costs will come down," Steven Greenlee, senior public information officer for the California Independent System Operator (CAISO) (Folsom, California), told Industrial Info in an interview. Most of the energy storage projects he has seen deployed in California have ranged between 20 MW and 30 MW, and one has been 40 MW.
Kevin Barker, an advisor at the California Energy Commission (CEC) (Sacramento, California), added: "We designed a state-wide procurement target large enough to drive the market without impacting negatively on (customers). There is no one size fits all solution when it comes to storage, but states and regions must go beyond renewables targets and recognize energy storage as a key element of a successful energy transition."
Storage is a win-win for the Power industry, and not just for the renewable energy developers, CAISO's Greenlee said. When the Aliso Storage natural gas storage facility was closed in 2016, SCE paired energy storage with gas-fired peaking plants to keep the lights on in Southern California. While acknowledging the pairing of energy storage and renewables has garnered a lot of media attention, he noted that pairing of storage projects with gas-fired generation "is what we're seeing in the market at the moment."
Greenlee said it was up to the market to decide if the optimal deployment of storage was to pair it with fossil-fueled generation to meet peak demand, or to enhance grid reliability, or to store electricity generated by wind turbines or solar panels. He added that battery storage is not the only way electricity could be stored. Concentrated Solar Power (CSP) plants, like the Ivanpah Solar Electric Generating Station in California and the Solana Solar Generating Station in Arizona, are designed to store solar-generated electricity for several hours after the sun goes down. Electric vehicles and rooftop solar are increasingly seen as types of energy storage, providing the proper infrastructure is in place. And hydroelectric pumped storage projects are a longstanding and prominent form of energy storage.
Carl Stills, vice president of storage integration with 8minutenergy Renewables (El Centro, California), said in an interview that some integrated photovoltaic solar/energy storage projects are cheaper that gas-fired generation.
Industrial Info's Ramey commented, "Electric storage in all its forms is one of the most powerful forces driving change in the Power industry. As was the case with renewable energy a generation ago, costs are high in the beginning. But I'm sure electric utilities and their customers will greatly benefit from ongoing research and early deployments. Someone has to be the first to go through the door, and the mandates enacted in California are expected to help create a market, which should drive down the costs of subsequent electric storage projects."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook-Twitter-LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com/.
