Consulting firm Wood Mackenzie said that 96% of network-scale deployments took place in the states of Texas and California.
Wood pointed out that grid-scale or utility-scale storage has set another record quarter of deployments, with 4.7 GWh installed in Q3 2022, surpassing the previous record of 4.6 GWh set in Q1 2021. That’s enough battery storage to power 150,000 homes for a day.
“Demand continues to grow in the residential and grid-scale storage segments, despite rising costs and persistent supply chain challenges,” said Vanessa Witte, senior analyst in the energy storage team at Wood Mackenzie.
The grid-scale storage market is well established, with 96% of total capacity installed this quarter in California and Texas, which are also the largest markets for grid-scale solar. Grid-scale storage in front of the meter is more concentrated in these markets than residential energy storage behind the meter.
Jason said, “California’s reliance on energy storage to meet record peak demand this September demonstrates why it is absolutely critical that policymakers and grid operators address supply constraints to ensure reliability. ” Berwen, vice president of energy storage for the American Clean Power Association.
Forecasts for the 2022-2026 period are up 109% compared to the previous quarter, with the US market expected to account for approximately 65 GW during the period. Grid-scale installations are expected to account for 84% of that capacity.
“Installed capacity is expected to more than double next year, driven by announcements of new grid-scale projects in California and increased residential and non-residential volumes due to a community solar program and the introduction of NEM 3.0,” Witte said.
Residential energy storage also installed a record quarter of 400 MWh, surpassing the previous record of 375 MWh for Q2 2022. California, Puerto Rico, Hawaii and Texas led the market. Wood Mackenzie expects this segment to grow to 2.2 GW by 2026.
Meanwhile, the second quarter of community, commercial and industrial storage fell short of expectations, with 56.6 MWh installed in the third quarter. Wood Mackenzie says it expects the segment to grow as well, benefiting from residential and grid-scale demand.
A trend of project delays due to supply chain constraints continues to hinder near-term growth, yet 2022-2028 interconnection queues are up 120% quarter-on-quarter.
“Some developers have considered delaying projects until 2023 to receive the Inflation Reduction Act tax credit, but this only applies to a very specific segment of projects,” Witte said.
Witte noted that supply chain issues and delays in interconnection queues could delay the project’s installation ahead of schedule. For this reason, Wood Mackenzie has raised its 2024-2026 forecasts to between 9% and 13% per year.
Grid-scale energy storage capacity is expected to exceed 30 GW by the end of 2025, 111 GWh installed capacity, according to an Energy Information Administration (EIA) report. Battery storage capacity in the US was negligible before 2020, when it started to grow. As of October 2022, 7.8 GW of utility-scale storage assets were in operation, with an additional 1.4 GW of capacity to be added by the end of 2022.
The EIA estimates that a further 20.8 GW of battery storage capacity will be added between 2023 and 2025.
The growth of energy storage capacity is outpacing the initial growth rate of commercial-scale solar. US solar capacity began to increase in the 2010s, rising from less than 1 GW in 2010 to 13.7 GW in 2015. By comparison, the EIA projects energy storage to increase from 1.5 GW in 2020 to 30 GW in 2025.
Today, the 409 MW Manatee Energy Storage in Florida is the largest operating battery storage project in the US. Developers have earmarked more than 23 grid-scale battery projects, ranging from 250 MW to 650 MW, to be deployed between now and 2025.
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