The U.S. Energy storage market had a breakout year in 2015, as documented in the latest annual edition of GTM Research and the Energy Storage Associations (ESA) Energy Storage Monitor. The market grew 243% by capacity with 221 MW installed over the course of 2015, and the fourth quarter was particularly intense, with 112 MW installed – more than in all of 2013 and 2014.
As in previous years, utility-scale battery projects in the PJM Interconnection market made up the large majority of new storage. Including all technologies, PJM interconnect installed 160 MW of storage in 2015.
However, the most rapid growth is in the nations distributed storage market, where installations grew more than 400% to 35 MW deployed in 2015. Hawaii dominated a residential market which GTM Research describes as geographically diverse, and California led the non-residential segment.
This are meager levels compared to what is expected over the next four years. GTM Research projects that the energy storage market will grow eight-fold by 2020 to 1.7 GW annually, and for investments to increase more than five-fold to US$2.5 billion.
And while Energy Storage Monitor is described as an energy storage report, it might as well be called a battery report, given that batteries comprise the overwhelming majority of capacity tracked. Increasingly it is also one battery chemistry, as lithium-ion batteries comprised 96% of all 2015 energy storage installations by capacity.
Energy storage is a policy-enabled market, and a primary factor in the dominance of the PJM Interconnection market is rules that enable utilities to value frequency regulation and other services offered by energy storage.
As such, a main focus of the report is new policy. GTM Research and ESA found significant policy developments during 2015 in more than a dozen states, as well as developments at the federal level, in the Midcontinent Independent System Operator (MISO) grid, and in Guam.
California continues to be a leader in terms of state policies, with multiple policy tacks at the California Public Utilities Commission, the California Energy Commission and the California Independent System Operator. Notably, California utilities are beginning to procure storage as required under AB 2514.