US Battery storage to reach new heights in 2019

With so much focus on EVs, it’s easy to forget about the growing behemoth known as the energy storage sector.

Recent analysis by Wood Mackenzie Power & Renewables and the Energy Storage Association (ESA) shows the deployment of energy storage installations in the US alone doubled in 2018, with 2019 set for another doubling of deployed capacity.  

The research found an 80% year-on-year jump in deployed storage capacity to 777 megawatt-hours (MWh) of capacity in 2018, with the forecast calling for 1,681MWh of grid-connected storage to be deployed in the US alone in 2019.

The US residential storage market quadrupled in 2018 year-over-year.

The researchers credit policy intervention at the state level for most of the growth. They point to a series of gubernatorial, legislative and regulatory actions aimed at unlocking the potential of storage, specifically to create a more resilient, efficient, sustainable and affordable electricity grid.

Incorporating energy storage in utility planning processes was another key US policy theme for 2018, with the National Association of Regulatory Commissioners adopting a resolution calling on utilities to include storage in long-term planning efforts. At the federal level, the Federal Energy Regulatory Commission’s landmark and bipartisan Order 841 provided a critical policy signal that triggered discussions on breaking down storage deployment barriers in regional markets.

The report noted 311MW of energy storage were deployed in the US in 2018, with Front of the Meter (FTM) accounting for 47% in megawatt terms.

Critically, more Behind the Meter (BTM) storage was deployed in 2018 in the US than any previous year on record, accounting for 53% of the megawatts deployed in 2018. The US BTM market is expected to pick up an increasing share of overall storage market value and is expected to account for more than half of annual market value in dollar terms by 2021.

Indeed, during 2018, several utilities initiated programs to explore the use of residential storage for grid services, opening a new chapter in residential storage where market players can access diverse new revenue streams beyond backup power, the ESA said.

2018 was also marked by battery supply shortages, as manufacturers committed capacity to the South Korean market to take advantage of incentives.

Consequently, US storage system price declines slowed in 2018, with some products even seeing slight price increases. These shortages are expected to be short lived and to decline from the end of the March-quarter, as several Tier 1 battery vendors bring new production capacity online.

The researchers expect battery-rack prices to fall below US$150/kWh over the next five years.

WoodMac estimates that the annual value of the US energy storage market will exceed $2.4 billion in 2020, rising to $3.8 billion by 2023 as falling costs and favourable policies drive new demand.

This all bodes well for technology metals such as cobalt, graphite and nickel, all of which are needed to make lithium-ion batteries – the current, undisputed leader in the race for dominance as the commercial technology of choice for grid storage.

Yes, vanadium-flow batteries have been catching up, however, that particular tech continues to play second fiddle by a very large margin, since today’s world is a lithium-ion world. Lithium-ion batteries will continue to dominate the grid-storage mix for at least the next decade, if not longer, given the incredible amounts of capital flowing into lithium-ion battery mega-factory build-outs happening in the US, Europe and especially in Asia.

Disclaimer

The Oregon Group has full editorial control over all content published on this website and the author has not been compensated or remunerated by any person to provide content for The Oregon Group, and all statements and expressions herein are the sole opinion of The Oregon Group. However, from time to time, The Oregon Group and its directors, officers, partners, employees, authors, or members of their families, as well as persons who are interviewed for articles on this website, may have a long or short position in securities or commodities mentioned and may make purchases and/or sales of those securities or commodities in the open market or otherwise. By accessing and using this website, readers are cautioned to assume that each of the foregoing persons may have a financial interest in all companies and sectors mentioned on this website. Any projections, market outlooks or estimates herein are forward looking statements and are inherently unreliable., and any such statements are based upon certain assumptions and should not be construed to be indicative of the actual events that will occur.  Other events that were not taken into account may occur and may significantly affect the returns or performance of the securities or commodities discussed herein. The information provided herein is based on matters as they exist as of the date of preparation and not as of any future date, and The Oregon Group undertakes no obligation to correct, update or revise the information in this document or to otherwise provide any additional material. The information provided on this website is for informational purposes only and is not, directly or indirectly, an offer, solicitation of an offer and/or a recommendation to buy or sell any security or commodity, and the information provided on this website should not be construed as any advice or an opinion as to the price at which the securities of any company or commodity may trade at any time. The Oregon Group is a publisher of financial information, not an investment advisor.  We do not provide personalized or individualized investment advice or information that is tailored to the needs of any particular recipient, and the information provided on this website is not and should not be construed as personal, financial, investment or professional advice. Readers are cautioned to always do their own research and review of publicly available information and to consult their professional and registered advisors before purchasing or selling any securities or commodities and should not rely on the information contained herein. Neither The Oregon Group nor any of its affiliates accepts any liability whatsoever for any direct or consequential loss howsoever arising, directly or indirectly, from any use of the information contained herein. By using the Site or any affiliated social media account, you are indicating your consent and agreement to this disclaimer and our terms of use. Unauthorized reproduction of this newsletter or its contents by photocopy, facsimile or any other means is illegal and punishable by law.

Share this article

about the author

Anthony Milewski

Anthony Milewski

Anthony Milewski has spent his entire career in various aspects of the investment world, including as a company CEO, board director, advisor, founder and investor, with a focus on commodities

Tags

Subscribe for the macro, so you can invest in the micro

Subscribe and get today’s market and industry trends delivered to you in real-time.

Members only

Our invite only, members area with exclusive industry updates and commentary is coming soon. Submit your name and email below to join the waiting list.

The Oregon Group

The Oregon Group is for investors who want to be ahead of the curve, who think in angles and timing, and who know the importance of the big picture when it comes to investing.

Subscribe for the macro, so you can invest in the micro

Subscribe and get today’s market and industry trends delivered to you in real-time.