By Jason Deign
At least two US regions outside California now represent double-digit markets for electrochemical energy storage, in terms of the number of projects and megawatts installed.
A new report from Energy Storage Update shows PJM Interconnection, the regional transmission organisation, clocking up 28 battery projects and more than 126MW. Hawaii, meanwhile, has 19 projects and 38MW.
PJM overtook California for utility-scale battery installations in the third quarter of 2015, according to US Energy Storage Association data.
A further 28 projects, summing 95.7MW, are under construction in the market and 48 more, totalling 668.3MW, are under review, the Newly emerging energy storage markets Guide 2016 says.
“The PJM market is particularly attractive for battery storage deployment for frequency regulation services,” says the guide. “In 2015, the average hourly regulation market clearing price was USD$31 per MWh.”
Foremost market for residential storage
Hawaii, meanwhile, “looks set to become the US’s foremost market for residential and commercial and industrial energy storage following the approval of regulations that favor the installation of batteries alongside rooftop solar.”
Retail electricity rates of $0.30 per kWh have led to rooftop solar adoption by 12% of homeowners, the highest level in the US.
This proliferation of residential PV led the Hawaiian Public Utilities Commission to end its net metering scheme last October.
Instead, residential users can now choose to install self-supply systems, grid-supply systems with rates below the net metering scheme, or time-of-use tariffs to shift energy consumption towards midday solar production peaks.
“All options are expected to promote the use of storage alongside PV,” concludes the guide, which is being issued in the run up to Energy Storage Update USA 2016 is on June 15 and 16 at the Hilton San Diego Mission Valley.
Three other storage markets
The Newly emerging energy storage markets Guide 2016 lists three other electrochemical storage markets that could reach double-digit magnitude, in terms of both installed megawatts and project numbers, by 2017.
Arizona already has a couple of projects summing 10.5MW, New York State has 13 projects and 3MW, and Texas has seven projects totalling 42MW. Both Arizona and New York also have significant non-electrical storage reserves.
In Arizona, for example, Abengoa Solar’s Solana Generating Station has up to 1.68GWh of molten salt thermal storage. New York, meanwhile, has a 20MW flywheel array from Beacon Power, located at Stephentown.
New York is already looking to procure significant additional battery storage reserves, according to Doug Staker, vice president of global sales at Demand Energy, which is highly active in the market.
The Brooklyn Queens Demand Management Program, for example, involves procurement of 23MW of load relief, which could be supplied by storage systems.
“A serious time crunch”
The cutoff for bids is April 1, 2017, and another 9MW procurement round is due in 2018. “This is a serious time crunch,” said Staker.
Overall, says the Energy Storage Update report: “It is clear that energy storage in the US is no longer just a Californian affair. There are other markets, too, that are emerging as worthy of attention.”
At the same time, though, the guide points out that experience gained in one particular US market might not be directly transferable to others.
“One of the more interesting trends emerging in markets across the US is the great diversity of business models that apply in different regulatory regimes,” it says.
“Thus, while distributed storage will be favored by the new regulations coming into force in Hawaii, in PJM it is utility-scale plants that are expected to dominate the landscape for the foreseeable future.”
Clear view of market conditions
This disparity makes it useful for developers and investors to have a clear view of different market conditions before committing to expansion across the US, said Iulia-Lorena Rus, industry analyst at Energy Storage Update.
“This guide will help you identify new market opportunities and strategies to further expand your business in the US,” she said.
- Energy Storage Update USA 2016 is on June 15 and 16 at the Hilton San Diego Mission Valley. Register by March 25 and save USD$300.