GTM Research--US Energy Storage Monitor Q2 2017 -Exec Summary

U.S. Energy Storage Monitor:
Q2 2017 Executive Summary
June 2017

Tables of Contents (Full Report)
1. Introduction and Key Findings 5
2. Energy Storage Market Overview 6
3. In Focus: Bridging the Gap – ESA’s 35 GW Target 39
4. Utility-Scale Market Trends 48
5. Behind-the-Meter Market Trends 66
6. Non-Residential Market Trends 75
7. Residential Market Trends 84
8. Appendices 94
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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About This Report
U.S. Energy Storage Monitor is a quarterly publication of GTM Research and the Energy Storage Association (ESA). Each quarter, we gather data on U.S. energy storage
deployments, prices, policies, regulations and business models. We compile this information in this report, which is intended to provide the most comprehensive, timely
analysis of energy storage in the U.S.
Notes:
• All forecasts are from GTM Research; ESA does not predict future pricing, costs or deployments
• References, data, charts and analysis from this report should be attributed to “GTM Research/ESA U.S. Energy Storage Monitor”
• Media inquiries should be directed to Mike Munsell from GTM Research (munsell@gtmresearch.com) or Matt Roberts with the Energy Storage Association
(m.roberts@energystorage.org)
For more information or to purchase the full report, visit www.energystoragemonitor.com.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Deployments (MW)
U.S. Q1 2017 Deployments in Megawatts Up 276% Over Previous Year
U.S. Quarterly Energy Storage Deployments by Segment (MW), 2013-Q1 2017
160
140
120
100
80
60
40
20
-
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Source: GTM Research
Residential Non-Residential Utility
• The U.S. deployed 71 MW of energy storage in Q1 2017, a 50% decrease from the 140.8 MW deployed in Q4 2016 and up 276% from t he 18.9 MW deployed in Q1 2016.
The follows the trend of the first quarter of each year generally seeing a smaller megawatt deployment level after an active fourth quarter.
• Behind-the-meter deployments decreased 22% from Q4 2016. The residential market held roughly flat, falling only 5% quarter-over-quarter. In contrast, the non-residential
segment fell 26%. The majority of this decline is attributable to the drop in California’s non -residential market, much of which resulted from players awaiting the next phase
of the Self-Generation Incentive Program.
• Overall, behind-the-meter deployments accounted for 9% of the total market in MW terms in Q1 2017.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Deployments (MWh)
U.S. Q1 2017 Deployments in Megawatt-Hours Up 944% Over Previous Year
U.S. Quarterly Energy Storage Deployments by Segment, 2013-Q1 2017 (MWh)
250
200
150
100
50
-
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Source: GTM Research
Residential Non-Residential Utility
• The U.S. deployed 233.7 MWh in Q1 2017, a 2% increase over Q4 2016 and up 944% over Q1 2016, when 22.4 MWh were deployed. Q1 2017 marked a record quarter in
MWh terms, breaking the record set in the previous quarter.
• Behind-the-meter deployments dropped 21% from Q4 2016. The residential market held roughly flat quarter-over-quarter, and in fact increased 1% from Q4 2016 to Q1 2017.
In contrast, the non-residential market fell 24% during the same period. The majority of this decline is attributable to the drop in California’s non-residential market, much of
which resulted from players awaiting the next phase of the SGIP.
• Overall, behind-the-meter deployments accounted for 6% of total deployments in MWh terms.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Top Energy Storage Markets, Q1 2017: California Remains Powerhouse, Hawaii Grows
Top 3 Markets by Segment in Q1 2017 (Power Capacity)
Rank Residential Non-Residential Utility
1 All Others* California California
2 Hawaii Hawaii Hawaii
3 California All Others* Arizona
*GTM Research is currently monitoring eight individual markets. Complete coverage of all markets is available in the full report.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Energy Storage Deployments by
Technology (MW)
Lithium-Ion Technology Continues the Trend of More Than 95% Share
Quarterly Energy Storage Deployment Share by Technology (MW %)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Lithium Ion Lead Acid Sodium Chemistries Flow - Vanadium Flow - Zinc Other
Source: GTM Research
• Lithium-ion batteries dominated the energy storage market for the tenth straight quarter, holding 96.5% of the market in Q1 2017. The majority of utility-scale projects deployed in Q1
2017 employed lithium-ion chemistry, and the technology is also favored in the behind-the-meter segment. Growing acceptance of lithium-ion is expected to cause this trend to continue
over the next few years.
• Vanadium flow batteries came in second place with 3% of the market, as a single vanadium-redox project was deployed in California.
• Lead-acid came in third place with 0.7% of the market.
* “Other” includes flywheel and unidentified energy storage technologies
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Front-of-the-Meter Policy and Market Developments, Q2 2017
Nevada
SB 204 would require regulators to consider
implementing energy storage targets; SB 65
could alter how resources are dispatched
Washington
Washington Utilities and
Transportation Commission
directed utilities to consider
storage within IRPs.
Indiana
Vectren’s grid modernization
filing includes a 1 MW battery
storage system paired with 4
MW of solar energy.
Massachusetts
Massachusetts Clean Energy Center
(MassCEC) released an RFP for its Advancing
Commonwealth Energy Storage (ACES)
Program for projects; MA DOER will set an
energy storage target in July 2017.
California
SDG&E announced winners for its 2016
preferred resources RFP; California State
Legislature introduced AB 1405, which would
establish a clean peak standard for California;
SDG&E released a Distribution
Reliability/Power Quality RFP; the CPUC
announced an additional 500 MW of
distributed energy targets for the three main
IOUs, distributed evenly among the three.
CAISO released latest ESDER revision.
Arizona
New York
NYSERDA offered up to $15.5 million for energy
storage demonstration projects via PON 3541; Con Ed
announced new details on its mobile 1 MW / 4 MWh
energy storage system.
PJM
Complaints have been filed with FERC over changes
to PJM’s frequency regulation market; Ongoing
meetings on markets and reliability, including
implementation of new RegD signal
APS announces its 2017 Integrated Resource
Plan (IRP), including more than 500 MW of
energy storage.v
Virginia
Maryland
Hawaii
KIUC’s 13 MW / 52 MWh energy storage
project, developed by SolarCity, came on-line.
Appalachian Power filed an
IRP which included a proposal
for 10 MW of battery storage
by 2025.
State legislature enrolled bills to instruct Power
Plant Research Program to investigate market
incentives and regulatory reforms necessary or beneficial
to bolster implementation of storage.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Behind-the-Meter Policy and Market Developments, Q2 2017
Nevada
State legislature saw the introduction of SB 145 and SB 146, the former
proposing the establishment of a behind-the-meter storage incentive program,
and the latter directing utilities to explore distributed resource plans.
New York
NY PSC issued an order regarding the valuation of DERs and the successor to NEM. NYSERDA offered up to $15.5
million for energy storage demonstration projects via PON 3541. NREL, CUNY and Meister released a report
identifying the value of storage for resiliency. Solar 1 issued an RFQ for a community solar-plus-storage program.
California
CPUC approved doubling of the SGIP budget for 2017
through 2019; also considered a proposed decision
on Track 2 Energy Storage Issues. The state
legislature is considering a bill to develop an energy
storage rebate program, with a particular focus on
systems deployed in low-income communities. CAISO
released its latest ESDER revision.
Arizona
APS and TEP submitted rate-case dockets to the
Arizona Corporation Commission.
Massachusetts
MassCEC launched the ACES program.
Maryland
The state legislature enrolled bills to
instruct Power Plant Research Program
to investigate market incentives and
regulatory reforms necessary or
beneficial to bolster implementation of
storage; also considering bill to create a
tax credit for behind-the-meter energy
storage systems.
Hawaii
The state legislature is considering HB 1593, a bill
that would establish a storage rebate program.
Florida
The state legislature passed SB 90 to exempt
80% of storage system value from ad valorem
taxation.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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MW
ESA’s 27th Annual Conference and Expo Sets Bold Target: 35 GW of Energy Storage by 2025
ESA’s 35 GW by 2025 Vision
40,000
35,000
• At ESA’s 27th Annual Conference and Expo in Denver in April 2017,
Matt Roberts, ESA's executive director, laid out a bold vision for
advanced energy storage’s future, calling for 35 GW to be deployed in
the United States by 2025.
30,000
25,000
20,000
• During his opening keynote, Roberts stated: "Electrification will
fundamentally transform the entire power sector – and this
confluence of forces is putting us on a path to deploy more than 35
GW of energy storage by 2025.” He cited cost declines, market and
regulatory reforms, and increasing recognition of the diverse value of
storing energy as drivers for this growth.
15,000
10,000
5,000
-
2017 2018 2019 2020 2021 2022 2023 2024 2025
Total Utility-Scale (MW)
Total Behind-the-Meter (MW)
Source: ESA
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Cumulative Installations (GW)
Bridging the Gap – 35 GW by 2025: Acceleration or Inflation?
GTM Research Total Cumulative 5-Year Forecast
40
35
30
25
20
15
10
5
The “hockey stick” effect:
Beyond the five-year
horizon, significant
disruptors could drive 8 to
10 GW of annual growth.
Inflation: Short-term
incremental changes drive
new business models and
accelerate existing forecasts
beyond expected levels.
• These signposts suggest several ways to bridge the policy gap from current forecasts to
2022 to ESA’s 35 GW target – unexpected short-term disruptions to the market that
would inflate current forecasts, or medium- and long-term changes that would drive
exponential growth beyond the five-year time frame.
• Inflation: Short-term policy and regulatory movement could front-load forecasted
growth, pushing the 1 GW annual threshold up and making future growth easier as
scale drives innovation and cost declines, which in turn drive new business models
and market opportunities. GTM Research updates its forecasts quarterly, so if this
trend emerges, it will be reflected in adjusted 5-year outlooks moving forward. These
short-term disruptions would have to occur quickly, likely in the next year, to drive
forecasts significantly upward.
• Acceleration: Long-term resource planning, legislation, and market reforms could
create a new “boom” for energy storage, allowing levels to proceed at roughly their
current pace before suddenly accelerating around the five-year horizon. This “hockey
stick” effect would create a tremendous opportunity as stakeholders scramble to move
at scale in a suddenly expanded market.
0
Source: GTM Research
Residential Non-Residential Utility ESA Target
• The next one to two years will be key as energy storage is being actively examined
nationwide at the state, ISO and federal level, and the decisions made now will
determine how the market looks eight years from now.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Energy Storage Deployments by
Segment (MW)
U.S. Energy Storage Annual Deployments Will Reach 2.6 GW by 2022
U.S. Annual Energy Storage Deployment Forecast, 2012-2022E (MW)
3,000
2,500
2,567
2,000
1,500
1,000
500
221
395
Source: GTM Research
-
2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E
Residential Non-Residential Utility
• GTM Research expects the U.S. energy storage market to grow to roughly 2.6 GW in 2022, almost 12 times the size of the 2016 market (221 MW).
• The behind-the-meter segment represented 20% of the 2016 market. This will grow to 53% of the annual storage market by 2022.
• California will remain the undisputed emperor of the U.S. storage market over the next five years. Arizona, Hawaii, Massachusetts, New York and Texas will all battle for second place, with
each market accounting for a significant chunk of deployments through 2022.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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Annual Energy Storage Market Size
(Million $)
Energy Storage Will Be a $3.2 Billion Market in the U.S. by 2022
U.S. Annual Energy Storage Market Size, 2012-2022E (Million $)
$3,500
$3,189
$3,000
$2,500
$2,000
$1,500
$1,000
$500
$320
$618
$0
Source: GTM Research
2012 2013 2014 2015 2016 2017E 2018E 2019E 2020E 2021E 2022E
Residential Non-Residential Utility
• By 2022, the U.S. energy storage market is expected to be worth $3.2 billion, a tenfold increase from 2016, and a fivefold increase from this year. Cumulative 2017-2022 storage
market revenues will be $11 billion.
• Revenues in 2016 ended up slightly higher than the previous year, as system prices have continued to be pushed down aggressively, and the overall deployments in megawatts were
down 3%. Also, the typically higher-priced residential segment, despite its mainstream buzz, only brought in about 4% of storage market revenues in 2016.
• Revenues in 2017 will grow almost twofold over 2016, with the residential segment providing the biggest percentage jump with 650% growth, while the utility segment will see the
highest growth in dollar terms, of $128 million versus the previous year.
GTM Research/ESA | U.S. Energy Storage Monitor: Q2 2017
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U.S. Energy Storage Monitor
Produced in a collaboration between GTM Research and the Energy Storage Association (ESA), the U.S. Energy Storage Monitor is the industry’s only comprehensive quarterly research
report on energy storage markets, deployments, policies, financing and regulations in the U.S. The report is available for purchase quarterly or as an annual subscription.
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Deployment Forecast National Aggregate By State and Segment
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June 2017