Energy Storage Has A Breakout Year On Both Sides Of The Meter

2018 may have been the year of residential energy storage, according to a leading analyst, but grid storage was no slouch.
2018 was also the year that grid-level batteries broke out of early adopter states, said Dan Finn-Foley, a senior analyst with Wood Mackenzie Power & Renewables, and began appearing in places that might once have seemed unlikely.
"This isn’t just a Starbucks in California talking about energy storage," Finn-Foley said Thursday. "We have Alabama, this past quarter Georgia, the Carolinas talking about energy storage. This tells you this is about cost. This is not an emotional decision. This is now about finding the least-cost solution, as a utility, to customers. And that’s a big deal.
"If you can tell a utility this is your least-cost solution, your market is about to take off, and that’s exactly what’s going to happen for front-of-the-meter energy storage."
Wood Mackenzie has not yet released its report on 2018, but Finn-Foley offered a sneak preview to Clean Energy States Alliance members Thursday, telling them that the fourth quarter of 2018 broke energy-storage records everywhere.
"The really exciting news is Q4 2018. Q4 2018 is going to beat these records handily, quite handily. Even from the front-of-the-meter side, residential/non-residential storage, every metric is going to set a new record for quarter-by-quarter deployments of energy storage."
While residential storage may still be driven more by emotion than economics, grid-level storage is reaching the magic point where the cost curve crosses the value line.
"That intersection is emerging, that point where cost meets value, sooner than a lot of people in the market anticipated, and the market’s responding. We’re seeing a lot of interest not only in the traditional markets with policy mechanisms in place—California, New York, Massachusetts, etc—but in these non-traditional markets where utilities are looking at solar-plus-storage competing directly with conventional generation peaking applications."
In addition to the Southeast, notable solar+storage projects have emerged in Florida, Minnesota, Texas, and Arizona.
Arizona Public Service recently made headlines by expanding its procurement of 500 MW of storage+solar by 2030 to 850 MW by 2025. But APS also entered into a 7-year contract to buy power from a natural-gas plant. Why is that significant? Because it wasn't a 20-year contract.
"They're saying in 7 years, I don't even know if we're going to want this natural gas. So we need the flexibility to take it or leave it. I know I say this a lot, this word, but that is a huge signpost. It's absolutely remarkable that energy storage+solar is so competitive that it is affecting the kind of contracts that a natural-gas plant can receive. This is becoming an existential—I don't want to say threat—an existential disruptor for the entire energy market."

Tip Jar: If you found value on this page, please consider tipping the author.