The US expands energy storage capacity deployment by 162%


The US market for energy storage has recorded a 162% increase during the second quarter of 2021 compared to the same period in 2020, according to a new report issued by research firm Wood Mackenzie and the US Energy Storage Association.

The US has connected 345MW of energy storage capacity during the second quarter of 2021. This made Q2 2021 the second-largest quarter on record by MW for new additions, according to the study.

The continued market expansion is a result of efforts by utilities and energy stakeholders to leverage energy storage to address the fluctuating nature of renewable energy resources. By using energy storage to store clean energy generated during times when generation is possible and high, energy companies can ensure the reliability of grid networks during times when energy demand is high and generation low. As a consequence, storage enables the use of renewable energy to provide baseload power.

Jason Burwen, US Energy Storage Association Interim CEO, said: “Energy storage deployment achieves decarbonisation and resilience goals simultaneously.

“Storage is increasingly necessary to enable the accelerated commissioning of wind and solar power—with the U.S. Department of Energy’s just-released Solar Futures Study projecting as much as 400 GW needed by 2035.

“Storage also assures that power delivery remains resilient to increasingly frequent and intensive weather disruptions, like the heat waves and hurricanes seen in the US this past summer.”

One can argue, the increase in energy storage deployments is a result of continued decreases in costs and increased awareness of the benefits of the technology. Moreover, emerging business cases such as time of use energy pricing and frequency regulation are pushing utilities into adopting energy storage systems to expand their revenue streams and keep their operations in line with changes within the industry.

Increased support from both the state and federal governments has paved the way for more funding to be made available for research, development, and adoption of technologies with the US energy department setting up a target to reduce the cost of grid-scale, long-duration storage systems by 90% by 2030.

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The market is expected to continue to expand throughout the second half of 2021 with projects equivalent to $5 billion in investments anticipated to be brought online.

Despite the positive market developments, the residential sector recorded its first decrease in the amount of energy storage capacity added, the first drop for the segment in nine quarters (since Q4 2018). This was due to equipment constraints, including an ongoing Tesla Powerwall shortage, according to the study.

The non-residential sector comprising onsite storage and community-scale projects saw quarter-on-quarter deployments rise by 31%, driven by the growth of the community storage market in Massachusetts.

The front-of-the-meter (FTM) market deployed 218 MW/729 MWh in Q2 2021, with California, Texas and Arizona leading the segment.

Vanessa Witte, senior energy storage analyst with Wood Mackenzie, added: “The United States remains on course for a record-setting year, further demonstrating battery storage’s growing acceptance within the power market and underlining its importance to the energy transition.”