Energy storage development in 3Q down from one year ago

There was 16.4 MW of energy storage deployed nationwide during the third quarter, which is a 75% drop from the same quarter in 2015, according to an update from GTM Research and the U.S. Energy Storage Association.

Front-of-the-meter deployments dropped 96% from 3Q 2015, as no projects above 1 MW were brought on-line for the first time since 2Q 2014.

The behind-the-meter deployments stayed essentially steady, increasing 1% from 3Q 2015. Behind-the-meter deployments accounted for 86% of total MW deployed in 3Q 2016, a record percentage driven by strong performance in the non-residential space, along with a slow quarter for utility-scale deployments.

The United States deployed 31.4 MWh of energy storage in 3Q 2016, down 43% from 55.1 MWh in 3Q 2015, driven by a slow quarter in the front-of-the-meter segment.

Front-of-the-meter deployments fell from 26.3 MWh in 3Q 2015 to 3.7 MWh in 3Q 2016, a year-over-year decrease of 86%. As utility procurements come on-line in the coming months, we expect the front-of-the-meter segment to regain a significant market share, as several 4-hour duration projects are set to come on-line in the fourth quarter.

But GTM anticipates better times in the foreseeable future, although it will be watching closely for federal policy shifts during the incoming Trump administration.  

GTM Research expects the U.S. energy storage market to grow from 226 MW in 2015 to 260 MW in 2016, and over 2 GW by 2021, eight times the size of 2016 market.

The behind-the-meter sectors will grow from 15% share in 2015 to account for almost a quarter of all deployments this year, and will account for half of the 2021 annual storage market.

“With the pending White House administration change, our outlook may be revised if the incoming administration puts forward regressive policy measures in 2017,” the GTM/Energy Storage Association authors say in the report.

“Our outlook is based on a business-as-usual regulatory landscape and incremental developments, and with most storage regulatory activities in state and regional markets, the only scenario in which our forecast will be negatively affected is if renewable policies or initiatives such as the Grid Modernization Initiative or commitments announced at the White House Summit on Scaling Renewable Energy and StorageWith SmartMarkets are overturned,” according to the report.

There continues to be a lot of pro-energy storage policy being passed on the state level. California, Nevada, Washington, Massachusetts, New Jersey and New York City are advancing energy storage efforts.

Nationally, FERC held a technical conference on Nov. 9 to examine the role of storage as a grid asset and obtain a baseline understanding of transmission and distribution grid applications. On Nov. 17, it issued a notice for proposed rulemaking (NOPR) to open up wholesale markets for energy storage and aggregation.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.