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US energy storage deployment up 243% as utilities embrace lithium-ion battery power

Fri, 03/04/2016 - 13:00 -- Paul Crompton
US energy storage deployment up 243% as utilities embrace lithium-ion battery power

The US adoption of battery energy storage saw a massive increase in 2015 with total deployment rising by more than 150MW — with lithium-ion being used in 96% of systems.

During 2015 the US deployed 221MW/ 161MWh, up from 65MW/ 86MWh in 2014, according to the GTM Research/Energy Storage Association’s U.S. Energy Storage Monitor 2015 Year in Review report.

This amounted to a 243% year-on-year rise in MW deployments as utility scale system costs dropped $100 to $700-1,200/kWh.

A fall in lithium-ion battery costs last year, which GM reported in December was down to $145kWh, coincided with a 24% rise in adoption of the technology from 2014.

Utility, or front-of-meter storage, accounted for 85% of all 2015 deployments, with 187MW going online (mostly in the PJM market), up from 58MW in 2014 (a rise of 223%). California led this segment.

Ravi Manghani, GTM Research senior energy storage analyst and author of the report, said: “We can look back at 2015 as the year when energy storage really took off.

“While most of the growth was limited to a single wholesale market of PJM, we expect growing interest for storage in several markets.”

The report breaks down the market into residential and non-residential (behind-the-meter) and utility sectors.

The residential market was led by Hawaii in 2015 as the behind-the-meter market saw 35MWs deployed last year, up from 6.9MW in 2014— a jump of 405%.

This is set to grow with launches of residential ESSs by firms such as Tesla and Sonnenbatterie and an extension of the Investment Tax Credit (30% up to 2019) for solar and Production Tax Credit (2.3-cent per kWh up to 2017) for wind.

“Energy storage is changing the paradigm on how we generate, distribute and use energy,” said Matt Roberts, executive director of Energy Storage Association (ESA).

“With exponential growth predicted over the next couple of years, energy storage solutions will deliver smarter, more dynamic energy services, address peak demand challenges and enable the expanded use of renewable generation like wind and solar.

“The net result will be a more resilient and flexible grid infrastructure that benefits American businesses and consumers.”

GTM research predicts the annual U.S. energy storage market will cross the 1-gigawatt mark in 2019 and by 2020 will be a 1.7 gigawatt market valued at $2.5 billion.