Much ado about storage?
North America – 2017 Electrochemical Storage Capacity
Energy storage has been, arguably, the most discussed topic among industry enthusiasts for years. Its versatility solves all ailments. Save money on utility bills! Defer or avoid costly grid investments! Replace peaking power plants! A person could be forgiven for assuming storage had already taken its place in the mainstream electric sector.
But this person is wrong. Today’s storage industry is just a drop in the ocean compared to the broader generation technology landscape. According to Sandia National Laboratories, only 707 megawatts of electrochemical storage (i.e. batteries) are in operation as of March 2018. For reference, this is less than 0.1% of operating generation capacity in the US and Canada. Over 80% of operating projects are in PJM’s (restructuring) Frequency Regulation market, or California’s various programs that support its 1.3 GW goal. That’s not much for an installed base.
However, as Wayne Gretzky once said, “skate to where the puck is going, not to where it has been.” We at Enovation are, admittedly, bullish on the future of storage. Rapidly falling costs, regional markets with lucrative value streams, and a promise of future clarity from FERC 841 make for a compelling story.
How much? How fast? Where? What does it mean for your business? In this regulatory climate, nothing is certain, but our expertise and bottom-up forecasting approach provides a clear structure for answering our clients’ questions.