EDGE
Business Advisory

Market Analysis
Current US Energy Storage Market

11-Jan-14

Ib Olsen
eMail olsen@edgebusinessadvi...
EDGE
Business Advisory

About EDGE Business Advisory?
EDGE Business Advisory is a Nordic, San Francisco-based market devel...
EDGE
Business Advisory

The US Energy Storage Market
• According to the DOE Global Energy Storage Database there
are at le...
EDGE
Business Advisory

The US Energy Storage Market
Technology Type Category
Battery
Compressed Air
Flywheel
Pumped Hydro...
EDGE
Business Advisory

Technical Drivers
• Several technologies have reached a maturity that allows for
predictable perfo...
EDGE
Business Advisory

Multiple Value Streams Maximizes Asset Utilization

6
EDGE
Business Advisory

Energy Storage Provides Flexibility That Traditional
Generation Cannot Provide

7
EDGE
Business Advisory

Estimated Target Market Size and Target Value Analysis
EPRI Analysis 2010
2014: The markets are si...
EDGE
Business Advisory

Total Addressable US Market - 2012
•

•

In 2012 Kema (now DNV GL) pooled
data from various source...
EDGE
Business Advisory

Regulatory Drivers
• FERC (Federal Energy Regulation Committee) in 2012 and 2013
recognized energy...
EDGE
Business Advisory

North American Regional Transmission Organizations

11
EDGE
Business Advisory

California Public Utilities Commission’ Energy Storage
Procurement Targets
•

The targets adopted ...
EDGE
Business Advisory

CA Energy Storage Targets (MW)

The mandate does not specify duration, but talking with utility re...
EDGE
Business Advisory

US Fast Regulation Market

14
EDGE
Business Advisory

Status Today
• Today there is an identified energy storage market in the US
for at least 2GW of ca...
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EDGE Business Advisory Energy Storage Market Analysis 2014 01-21

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EDGE Business Advisory Energy Storage Market Analysis 2014 01-21

  1. 1. EDGE Business Advisory Market Analysis Current US Energy Storage Market 11-Jan-14 Ib Olsen eMail olsen@edgebusinessadvisory.com Phone (US) +1 917 379 3590 EdgeBusinessAdvisory.com
  2. 2. EDGE Business Advisory About EDGE Business Advisory? EDGE Business Advisory is a Nordic, San Francisco-based market development consultancy unlike any other... We operate like your local business development subsidiary in the US and provide you with a cost efficient way to enter or further develop the US market without the risk and costs associated with establishment of your own office. Our services are designed to support your business interests in establishing or growing the US market for your products and services. Given our location in San Francisco and Silicon Valley, we are well positioned to market companies in the tech industry, but we also operate as a US market hub for other products and services. Our team is made up of experienced consultants, often with a cross-cultural backgrounds, from market leading companies. Due to our low overhead we provide highly skilled consultants at competitive rates
  3. 3. EDGE Business Advisory The US Energy Storage Market • According to the DOE Global Energy Storage Database there are at least 141 energy storage installations in operation in US rated at 100kW or more, with another 37 installations in contract or under construction 3
  4. 4. EDGE Business Advisory The US Energy Storage Market Technology Type Category Battery Compressed Air Flywheel Pumped Hydro Thermal Storage Technology Type Category Battery Compressed Air Flywheel Pumped Hydro Thermal Storage Technology Type Category Battery Compressed Air Flywheel Pumped Hydro Thermal Storage Operational 54 units 3 units 3 units 36 units 45 units Operational 204 MW 114 MW 26 MW 20,330 MW 227 MW Operational 310 MWh 6,050 MWh 7 MWh 247,010 MWh 1,621 MWh Under Construction 21 units Contracted Announced Offline/Under Repair 10 units 4 units 3 units 2 units 1 units 1 units 5 units DeCommissioned 3 units 1 units 3 units Under Construction 40 MW Contracted 1 units Announced Offline/Under Repair 7 MW 32 MW 626 MW 16 MW 1,300 MW 6 MW 2,950 MW DeCommissioned 2,012 MW 2 MW 540 MW Under Construction 88 MWh Contracted 0.1 MW Announced Offline/Under Repair 20 MWh 31 MWh 43,934 MWh 11 MWh NA 12 MWh 27,963 MWh DeCommissioned 36,344 MWh 0.01 MWh 3,980 MWh Data extracted and analyzed from: http://www.energystorageexchange.org/ 0.1 MWh 4
  5. 5. EDGE Business Advisory Technical Drivers • Several technologies have reached a maturity that allows for predictable performance over the 10 to 15 years life of an installation. • Significant development money is going in to especially battery based energy storage. – Mechanical, thermal, and compressed air storage have also received substantial public funding to be developed into commercial scale. • Early installations have shown the benefits of fast acting resources on the grid and the electrical grid is getting better at integrating multiple resources. 5
  6. 6. EDGE Business Advisory Multiple Value Streams Maximizes Asset Utilization 6
  7. 7. EDGE Business Advisory Energy Storage Provides Flexibility That Traditional Generation Cannot Provide 7
  8. 8. EDGE Business Advisory Estimated Target Market Size and Target Value Analysis EPRI Analysis 2010 2014: The markets are significantly increased. Frequency regulation alone is now more than 1 GW, and the study did not include ramp-rate control for renewable energy, which is expected to be at least 600MW for Puerto Rico alone However, the $/kWh is still a good guideline Source: http://www.epri.com/abstracts/pages/productabstract.aspx?ProductID=000000000001020676 8
  9. 9. EDGE Business Advisory Total Addressable US Market - 2012 • • In 2012 Kema (now DNV GL) pooled data from various sources including EPRI and Sandia National Laboratories, and came up with a total potential market of ranging from 232GW to 415GW in US. Since then a lot has happened on the regulatory side… Kema report: Market Evaluation for Energy Storage in the United States, 2012 9
  10. 10. EDGE Business Advisory Regulatory Drivers • FERC (Federal Energy Regulation Committee) in 2012 and 2013 recognized energy storage as fast acting regulation for the grid, which should be able to bid into the open electrical market • Several Independent System Operators (ISO) have / are following the FERC rulings by creating actual markets. – At this point PJM, serving the Mid Atlantic area, is the largest • California has issued a separate bill requiring energy storage as part of the mix to replace several outdated power plants • Puerto Rico and Hawaii require firming of renewable energy, which can best be served by energy storage • Texas has recognized that energy can provide service both during discharge and charge 10
  11. 11. EDGE Business Advisory North American Regional Transmission Organizations 11
  12. 12. EDGE Business Advisory California Public Utilities Commission’ Energy Storage Procurement Targets • The targets adopted on Thursday, October 17, 2013, apply to California’s three major investor-owned utilities (IOUs): Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric. The IOUs are required to collectively procure 1,325 MWs of energy storage capacity by 2020, with an installation deadline of the end of 2024, to implement AB 2514 (2010). The CPUC directed the utilities to file, by March 1, 2014, separate procurement applications with a proposal for their first energy storage procurement. The IOUs are required to conduct their first solicitation by December 1, 2014, and further procurement applications and solicitations will be held biennially until 2020. http://www.reedsmith.com/California-Public-Utilities-Commission-Adopts-Energy-Storage-Procurement-Targets-10-23-2013/ 12
  13. 13. EDGE Business Advisory CA Energy Storage Targets (MW) The mandate does not specify duration, but talking with utility representatives it will probably be at least four hours (i.e. 1 MW for 4 hours = 4MWh of energy) Based on Transmission and Distribution demand alone, the addressable market in California is at least 1.1GW / 4.5GWh 13
  14. 14. EDGE Business Advisory US Fast Regulation Market 14
  15. 15. EDGE Business Advisory Status Today • Today there is an identified energy storage market in the US for at least 2GW of capacity, which translates into at least 4GWh of energy • As renewable energy penetration increases this number will go up – especially the need for longer duration energy storage • As outdated power plants are phased out, there is a trend towards increased renewable energy – New York just announced the closure of a nuclear power plant and the announcement associated replacement is expected soon • States continue to pass regulation, which expands the energy storage market 15
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