3.5GWh! U.S. energy storage project development hits record

In the third quarter of 2021, the number of energy storage projects developed in the United States has grown rapidly, exceeding 3.5GWh, almost equal to the total of all of 2020.

According to the latest U.S. Energy Storage Monitor quarterly report released by Wood Mackenzie Power & Renewables, between July and September this year, the United States installed 1,140MW/3,515MW of energy storage.

The research and analysis firm said late last year that 1,464MW/3,487MWh of new energy storage projects had been connected to the grid in the past 12 months. That's higher than U.S. development in six years (from 2013 to 2019).

In other words, the quarterly development volume in the third quarter of 2021 was a record, surpassing the previous development record of 612MW in the fourth quarter of 2020.

Image: Wood Mackenzie

As before, large-scale energy storage projects on the grid side with an installed capacity of nearly 1GW (998.8MW) are the main driving force. Most of the projects are located in California, which should come as no surprise to longtime Energy-Storage readers.

There was also growth in the residential and non-residential (commercial, industrial, community, etc.) sectors. The household installed capacity is 97.9MW/225MWh, and the non-household installed capacity is 43.6MW/92.1MWh, which is the highest level in this field in 2021.

The duration of the energy storage market is getting longer, with the average energy storage duration for market-side projects being 3.2 hours. Additionally, this average is largely influenced by California, where 4-hour programs are increasingly common, due to Resource Adequacy (RA) contracts. Resource adequacy is a market mechanism through which grid operator CAISO ensures that energy suppliers meet capacity obligations.

The average duration of user projects was 2.3 hours, and the average duration of non-user projects was 2.1 hours.

California ranks first in ground-based large-scale PV and residential

California led the way with 2,744MWh of Q3 development, followed by Texas (304MWh) and Arizona (100MWh) in third place.

In the non-residential sector, Massachusetts leads with 44.6MWh of installed capacity, followed by New York (21.8MWh) and California (16.8MWh), driven by policies such as the Massachusetts Renewable Energy Target Program and Clean Peaking Standards. .

California led the way in residential capacity (88.8MWh in the quarter), Puerto Rico was second (29.9MWh) and Texas was third (16.8MWh). The residential solar market in these markets has performed strongly. In addition, the need for flexibility and backup power has grown in addition to the extreme weather and power outages experienced over the past few months and years.

Previously, the company predicted that the U.S. energy storage market would be worth about $5 billion in 2021, and then the forecast was raised to $5.844 billion. This figure is expected to double to $10.41 billion from this year to 2023, with grid-side projects continuing to play a leading role.

Analysts at Wood Mackenzie said growth in the market will slow since then, but the total market will be worth about $11.546 billion by 2026.

The U.S. Energy Storage Monitoring Report is a collaboration between Wood Mackenzie and the National Energy Storage Association (ESA). ESA interim chief executive Jason Burwen said the record-breaking quarter showed that "the game of power system investment has officially changed" with a shift toward energy storage "as a game-changing technology."

"The decade of energy storage has arrived," Burwen said.

Wood Mackenzie energy storage analyst Vanessa Witte pointed out that the company expects as many as 4.7GW of large-scale energy storage projects to come online in 2021.

In other words, the record-breaking quarter was just "the beginning of a slew of large new projects coming online this year and next."

Still, some developers have reported slight delays to projects this year, with some grid-side projects scheduled for completion in the fourth quarter likely to be delayed until early next year, Wood Mackenzie said.

So far, only 1.8GW of grid-side projects will be connected to the grid in 2021, and more than 2.9GW of grid-side projects are expected to be put into operation. There is a growing trend towards hybrid systems, most of which are solar-storage projects. Less than half of the projects in operation are power generation projects with storage.

The research team also predicts that the passage of President Joe Biden's Build Back Better Act, including the Investment Tax Credit (ITC) policy for independent energy storage, would provide a significant boost to the market. .

This week, Energy-Storage released an in-depth interview with ESA CEO Jason Burwen and American Clean Energy Association CEO Heather Zichal. The two organizations will merge on January 1, 2022.

Burwen and Zichal say this reflects the combined role of energy storage in driving wind, solar and transmission and as a complementary technology.