The value of the US battery storage market could grow from $300 million a year to as much as $3 billion by 2020— adding up to rich pickings for electricity distribution cooperatives, according to a new report.
Capital costs for battery systems could fall below $300 per kilowatt hour this year as “significant expansion” boost economies of scale for the manufacture of cells and battery packs, said the report by national rural industries finance institution CoBank.
The report claimed “Li-based batteries will define the future of battery storage in the US, accounting for roughly 65% of all US battery projects that are under construction or have been contracted”. Multiple chemistries available for Li-ion batteries “make them attractive to electricity providers, especially for applications that require a duration of four hours or less”.
However, CoBank lead industry economist Taylor Gunn warned “the lack of historical operational data for lithium-ion batteries create uncertainty when evaluating this new technology”.
And the report said some co-ops involved in the study are “also considering flow battery technology”.
Load shaping is currently the “single largest driver for adoption” of battery systems among electricity distribution cooperatives, the report said. But as co-ops “become more comfortable with battery technology, they are sure to explore other uses that can maximise the value of batteries on their system, and provide new services to their member owners”.
The size of systems among the co-ops reviewed for the study ranged from 3.3kW to 15,000kW, with durations from one to four hours.