State of the U.S. Energy Storage Industry: 2019 Year in Review - - PowerPoint PPT Presentation

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State of the U.S. Energy Storage Industry: 2019 Year in Review - - PowerPoint PPT Presentation

Energy Storage Technology Advancement Partnership (ESTAP) Webinar State of the U.S. Energy Storage Industry: 2019 Year in Review Hosted by Todd Olinsky-Paul, Project Director, CESA February 6, 2020 Housekeeping Join audio: Choose Mic


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State of the U.S. Energy Storage Industry: 2019 Year in Review

Hosted by Todd Olinsky-Paul, Project Director, CESA February 6, 2020

Energy Storage Technology Advancement Partnership (ESTAP) Webinar

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Housekeeping

Join audio:

  • Choose Mic & Speakers to use VoIP
  • Choose Telephone and dial using the

information provided Use the orange arrow to open and close your control panel Submit questions and comments via the Questions panel This webinar is being recorded. We will email you a webinar recording within 48

  • hours. This webinar will be posted on

CESA’s website at www.cesa.org/webinars

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www.cesa.org

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Energy Storage Technology Advancement Partnership (ESTAP) (bit.ly/ESTAP)

ESTAP Key Activities:

  • 1. Disseminate information to stakeholders
  • 2. Facilitate public/private partnerships to support joint

federal/state energy storage demonstration project deployment

  • 3. Support state energy storage efforts with technical, policy

and program assistance

  • ESTAP listserv >5,000 members
  • Webinars, conferences, information

updates, surveys.

Massachusetts: $40 Million Resilient Power/Microgrids Solicitation: 11 projects $10 Million energy storage demo program Alaska: Kodiak Island Wind/Hydro/ Battery & Cordova hydro/battery projects Northeastern States Post-Sandy Critical Infrastructure Resiliency Project New Jersey: $10 million, 4-year energy storage solicitation: 13 projects Pennsylvania Battery Demonstration Project Connecticut: $50 Million, 3-year Microgrids Initiative: 11 projects Maryland Game Changer Awards: Solar/EV/Battery & Resiliency Through Microgrids Task Force

ESTAP Project Locations:

Oregon: 500 kW Energy Storage Demonstration Project New Mexico: Energy Storage Task Force Vermont: 4 MW energy storage microgrid & Airport Microgrid New York: $40 Million Microgrids Initiative Hawaii: 6MW storage on Molokai Island and HECO projects

ESTAP is supported by the U.S. Department of Energy Office of Electricity and Sandia National Laboratories, and is managed by CESA.

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Webinar Speakers

  • Dr. Imre Gyuk

Director, Energy Storage Research, U.S. Department of Energy Todd Olinsky-Paul Project Director, Clean Energy States Alliance (moderator) Dan Finn-Foley Head of Energy Storage, Wood Mackenzie Power & Renewables

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Grid Scale Energy Storage: 3 Recent DOE Projects

IMRE GYUK, DIRECTOR, ENERGY STORAGE RESEARCH, DOE-OE

ESTAP 02–06-20

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Sterling, MA: Microgrid/Storage Project

Sterling Municipal Light Department. $1.5M Grant from MA Community Clean Energy Resiliency Initiative (Dept. of Energy Resources). Further Funding fromDOE/Sandia. 2MW/2hr storage with existing 3.4 MW PV to provide resiliency for Police HQ and Dispatch Center. Li-ion batteries provided by NEC.

Sterling, MA, December 2016 Sterling, MA, October 2016

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April 2019: 1 million Avoided Cost!

Visitors: Germany, Switzerland, Denmark, Sweden, England, Ireland, Australia, Japan, Malaysia, Taiwan, Brazil, Chile, …. Thailand

Chart: Carina Kaainoa Sean Hamilton

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Cordova, Alaska, Municipal System

6MW Run of RiverHydro Power Cordoba, Grid Isolated

Total Generating Capacity: 6MW + 1.25MW Hydro; 2x 1MW Diesel 0.5MW Deflected as Spinning Reserve Hydro: $0.06/kW; Diesel: $0.60/kW

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Ribbon Cutting with Sen. Murkowski 1 MW / 1 hr Li-ion Storage

  • Frequency Regulation
  • Load following
  • Emergency Supply

Commissioned June 7, 2019

Thanksgiving, Nov. 2019 2 days: 4hrs diesel vs. 48 hrs $10,000 in savings

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Nantucket – National Grid, Tesla, PNNL/DOE

Installation: 6MW/8hr Storage + 6-10 MW Generator to yield required 91MW Peaking Capacity

71 MW Submarine Cables Analytics: Balducci et al. PNNL $110 million Deferral Value + $36 million Operational Benefits

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Ribbon Cutting: Oct. 8, 2019. Return on Investment: 1.55

In addition to transmission deferral, other potential economic benefits could include:

  • ISO-NE demand response program

participation

  • ISO-NE ancillary service markets
  • ISO-NE forward capacity and reserve markets
  • Energy arbitrage, Outage mitigation

PNNL evaluated technical and financial benefits of energy storage:

  • Financial benefits of ES
  • Technical impact on distribution system
  • Control strategies to maximize financial

benefits while achieving resiliency goals.

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Wood Mackenzie U.S. energy storage market overview woodmac.com

U.S. Energy storage market

  • verview

Dan Finn-Foley

Head of Energy Storage

Daniel.Finn-Foley@woodmac.com

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1 Wood Mackenzie U.S. energy storage market overview woodmac.com

Wood Mackenzie offices Wood Mackenzie Power & Renewables offices

Wood Mackenzie is ideally positioned to support consumers, producers and financers of the new energy economy.

 Acquisition of MAKE and Greentech Media (GTM)  Leaders in renewables, EV demand and grid-connected storage  Over 500 sector-dedicated analysts and consultants globally, including 75 specifically to power and renewables  Located close to clients and industry contacts

About Wood Mackenzie

We provide commercial insight and access to our experts leveraging our integrated proprietary metals, energy and renewables research platform

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Deployment trends 1.

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3 Wood Mackenzie U.S. energy storage market overview woodmac.com

  • 20

40 60 80 100 120 140 160 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Deployments (MW) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables

U.S. Q3 2019 deployments up 32% quarter-over-quarter

Rebounding front-of-the-meter segment helps push market higher; behind-the-meter market roughly flat QOQ

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4 Wood Mackenzie U.S. energy storage market overview woodmac.com

  • 50

100 150 200 250 300 350 400 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Deployments (MWh) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables

In Q3 2019, megawatt-hours deployed increased by 59%

Market grew 93% year-over-year

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Technology and system price trends 2.

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6 Wood Mackenzie U.S. energy storage market overview woodmac.com

* “Other” includes flywheel and unidentified energy storage technologies. Source: Wood Mackenzie Power & Renewables

Lithium-ion still dominates the market, accounting for 99.2% share in Q3 2019

Lead-acid hovers around 0.8%; a single vanadium flow battery project in Q3 accounts for roughly 0.01% share Quarterly energy storage deployment share by technology (MW %) 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016 Q3 2016 Q1 2017 Q3 2017 Q1 2018 Q3 2018 Q1 2019 Q3 2019 Energy storage deployments by technology (MW) Lithium Ion Lead Acid Sodium Chemistries Flow - Vanadium Flow - Zinc Other

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7 Wood Mackenzie U.S. energy storage market overview woodmac.com

Note: The prices shown in charts are for fully installed systems including interconnection Source: Wood Mackenzie Power & Renewables

Prices of long- and medium-duration FTM systems set to decline more than 15% by 2021

Price trends for front-of-the-meter fully installed systems, Q4 2019 and 2021E, 4-hour ($/kW) Price trends for front-of-the-meter fully installed systems, Q4 2019 and 2021E, 2-hour ($/kW) Median - $2,025 Median - $1,625 $0 $500 $1,000 $1,500 $2,000 $2,500 $3,000 Front-of-the-meter (4-hour) Q4 2019 Front-of-the-meter (4-hour) 2021E Q4 2019 system price ranges ($/kW) Median - $1,375 Median - $1,150 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 Front-of-the-meter (2- hour) Q4 2019 Front-of-the-meter (2- hour) 2021E Q4 2019 system price ranges ($/kW)

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8 Wood Mackenzie U.S. energy storage market overview woodmac.com

Note: The prices in the chart are for fully installed systems including interconnection Source: Wood Mackenzie Power & Renewables

Short-duration FTM system prices expected to decline by 10% over the next two years

Median - $725 Median - $675 $0 $200 $400 $600 $800 $1,000 $1,200 Front-of-the-meter (30-minute) Q4 2019 Front-of-the-meter (30-minute) 2021E Q4 2019 system price ranges ($/kW) Price trends for front-of-the-meter fully installed systems, Q4 2019 and 2021E, 30-min. ($/kW)

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woodmac.com Trusted intelligence

Energy Cycle Life Safety Cost Depth of Discharge LFP NMC

Source: Wood Mackenzie

Changing battery chemistry will drive down battery prices

2018 was the year of NMC shortage, but LFP is here to stay

Source: Wood Mackenzie Power & Renewables

2019 2020E 2021E 2022E 2023E 2024E Battery price ($/kWh) NMC LFP

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woodmac.com Trusted intelligence

2018 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E Annual battery manufacturing capacity (GWh) China USA Germany Sweden Turkey Australia South Korea Hungary Japan Poland France England Unknown

Source: Wood Mackenzie

Global battery manufacturing scale-up will drive down battery prices in the future

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Market drivers and outlook 3.

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12 Wood Mackenzie U.S. energy storage market overview woodmac.com

Source: Wood Mackenzie Power & Renewables

Front-of-the-meter policy and market developments, Q3 2019

The U.S. Senate introduced a bill to create a distributed energy opportunity board for the purpose

  • f streamlining DER permitting. An amended BEST

act was also passed in the U.S. Senate. Additional tariffs were placed in Chinese lithium-ion batteries.

Federal

Alabama Power submitted plans for five power- purchase agreements for solar-plus-storage systems.

Alabama

Georgia Power signed a PPA for a 40 MW/80 MWh system for 2021 delivery.

Georgia

The Federal Energy Regulatory Commission approved storage participation rules for grid operators PJM and SPP under Order 841 and opened a proceeding examining capacity qualifications.

FERC

Grid operator ERCOT established Battery Energy Storage Task Force.

Texas

Utility HECO’s Phase II renewables request for proposals includes targeted procurement of resources, including storage, to replace retiring fossil fuel plants.

Hawaii

Dominion released an RFP for new capacity resources.

Virginia

The Department of Energy Resources proposed changes to the SMART program as part of a review process.

Massachusetts

New York Fire Prevention and Building Code Council and the New York Department of State issued an emergency rulemaking concerning storage permitting in New York, followed by a finalized change to the fire prevention and building code. FDNY’s outdoor storage permitting rules went into effect on 1 October 2019. The NY Public Service Commission approved plans for a 316 MW battery system to replace existing combustion turbines. Additional financing available through the Green Bank.

New York

Northern Indiana Public Service Company released an RFP for 2,300 MW of solar and solar-plus-storage resource, among others.

Indiana

PacifiCorp’s 2019 integrated resource plan calls for dramatic increases in planned solar and storage compared to 2017’s version. It impacts multiple states in the utility’s Northwest U.S. service territory.

PacifiCorp

California Public Utilities Commission ordered 2-3 GW of new resources to meet capacity shortfall anticipated in Southern California. CPUC approved 95 MW of storage procurements to provide local capacity requirements for utility SCE.

California

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13 Wood Mackenzie U.S. energy storage market overview woodmac.com

Source: Wood Mackenzie Power & Renewables

Behind-the-meter policy and market developments, Q3 2019

The U.S. Senate introduced a bill to create a distributed energy opportunity board for the purpose of streamlining DER permitting.

Federal

DOER proposed changes to the SMART program as part of a review. The Massachusetts fire code was amended to add storage provisions more in line with recent National Fire Protection Association rules.

Massachusetts

New York Fire Prevention and Building Code Council and the New York Department of State issued an emergency rulemaking concerning storage permitting in New York, followed by a finalized change to the fire prevention and building code. FDNY’s outdoor storage permitting rules went into effect on 1 October 2019. NYSERDA added a fourth block to the retail incentive program under the bridge incentive.

New York

Maryland Public Service Commission approved new energy storage interconnection standards.

Maryland

The California Public Utilities Commission revised the Self-Generation Incentive Program to include additional funding for systems supporting low-income communities and customers with resilience needs; it also denied a petition to remove mandatory time-of-use rates from residents of affordable multifamily housing enrolled in virtual net energy metering programs and approved 95 MW of storage procurements to provide local capacity requirements for utility SCE. East Bay Community Energy, Peninsula Clean Energy, Silicon Valley Clean Energy and Silicon Valley Power issued a joint RFP to procure 32.7 MW of BTM storage to support resource adequacy and customer resilience. The City of San Jose issued a grid resiliency replacement memorandum.

California

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14 Wood Mackenzie U.S. energy storage market overview woodmac.com

Source: Wood Mackenzie Power & Renewables

Total FTM pipeline grows to 78 GW led by PJM and Massachusetts

This represents a 15% increase to the pipeline QOQ and a 2.4x growth YOY U.S. front-of-the-meter energy storage pipeline by market, Q3 2015-Q3 2019 (MW) 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Total FTM energy storage pipeline (MW) Arizona California Colorado Florida Hawaii Massachusetts Nevada New Jersey New York PJM (Exc. NJ) Texas All Others

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Total FTM pipeline grows to 78 GW led by PJM and Massachusetts (cont.)

This represents a 15% increase to the pipeline QOQ and a 2.4x growth YOY U.S. front-of-the-meter energy storage pipeline market share, Q3 2015-Q3 2019 (%) 0% 20% 40% 60% 80% 100% Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Total FTM pipeline share

  • ver time

(% of MW) Arizona California Colorado Florida Hawaii Massachusetts Nevada New Jersey New York PJM (Exc. NJ) Texas All Others

Source: Wood Mackenzie Power & Renewables

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woodmac.com Trusted intelligence Source: Pacificorp IRP

Case study – Pacificorp integrated resource plan, 2017 vs. 2019

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woodmac.com Trusted intelligence

Case study – Pacificorp integrated resource plan, 2017 vs. 2019

Source: Pacificorp IRP

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woodmac.com Trusted intelligence

Case study – Pacificorp integrated resource plan, 2017 vs. 2019

Source: Pacificorp IRP

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woodmac.com Trusted intelligence

U.S. energy storage market – integrated resource plans

> 300 MW > 0 MW

Note – state storage mandate- based procurement planning excluded

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20 Wood Mackenzie U.S. energy storage market overview woodmac.com

311 430 5,421

  • 1,000

2,000 3,000 4,000 5,000 6,000 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E Energy storage deployments by segment (MW) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables

U.S. energy storage annual deployments will reach 5.4 GW by 2024

A shift in utility planning and procurement priorities will drive FTM deployments higher U.S. energy storage annual deployment forecast, 2012-2024E (MW)

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21 Wood Mackenzie U.S. energy storage market overview woodmac.com

$489 $645 $5,363 $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 2012 2013 2014 2015 2016 2017 2018 2019E 2020E 2021E 2022E 2023E 2024E Annual energy storage market size (million $) Residential Non-Residential Front-of-the-Meter

Source: Wood Mackenzie Power & Renewables. Note: Market size is reported as energy storage system deployment revenue (product of deployments and installed system prices).

U.S. energy storage will be a $5.4 billion market in 2024

Annual value will surge to almost $2 billion in 2020 before more than doubling again to $4.2 billion in 2021 U.S. annual energy storage market size, 2012-2024E (million $)

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woodmac.com Trusted intelligence

Opportunity and strategy surrounding energy storage shifts dramatically as the market moves from capturing value to the necessity of flexibility

Eligibility Opportunity Necessity

Adaptation -> Transition -> Transformation

Adapt to new market forces (2020 – 2024)

  • Capture early market, establish scale
  • Diversify or specialize markets and offerings?
  • Establish supply chain amid growing competition

Transition technology to new system needs (2025 – 2035)

  • Commercialize investments in next-gen storage technology
  • Scale solutions to needs, ensure flexibility of offerings
  • Expand into new markets, out-compete

Transform the way electricity is delivered (2036 – 2050)

  • Decentralization
  • Deep decarbonization
  • Disrupt at the grid edge
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Thank you for attending our webinar

Todd Olinsky-Paul Project Director, CESA todd@cleanegroup.org Find us online: www.cesa.org facebook.com/cleanenergystates @CESA_news on Twitter

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Upcoming Webinar

Read more and register at: www.cesa.org/webinars

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