Energy storage hits record in market grid-scale segment
A record 4,733 megawatt-hours (MWh) of energy was stored in the market grid-scale segment in the third quarter of 2022, according to the latest U.S. Energy Storage Monitor, produced by the American Clean Power Association (ACP) and Wood Mackenzie.
This topped the previous quarterly high of 4,598 MWh that occurred in the first quarter of 2021. Grid-scale storage deployments relied heavily on California and Texas, which accounted for 96 percent of total installed capacity this quarter.
“Demand in the grid-scale and residential storage segments continues to increase, despite rising costs and lingering supply chain challenges,” said Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team. “Installed capacity is expected to more than double next year, driven by new grid-scale project announcements and increased residential and non-residential volumes in CA due to the introduction of a community solar program and NEM 3.0.”
The total forecast volume between 2022-2026 across all segments increased by 109 percent quarter-over-quarter, according to the report. In this timeframe, the U.S. storage market will install almost 65 gigawatts (GW) in total, with grid-scale installations accounting for 84 percent of that capacity.
“Demand for energy storage is at an all-time high, driven by sustained higher energy prices, state decarbonization mandates, and Inflation Reduction Act incentives,” Jason Burwen, vice president of energy storage at the American Clean Power Association, said. “California’s reliance on energy storage to meet record peak demand this September shows why it’s absolutely critical that policymakers and grid operators remove barriers to supply to ensure reliability. The rapid increase in grid-scale storage capacity requesting to connect to the grid demonstrates that the pace of U.S. industry growth is increasingly dependent on the availability of transmission and timely grid access.”
Breaking down the numbers, residential storage had another record quarter, with 400 MWh installed, surpassing the previous quarterly record of 375 MWh in the second quarter of 2022. California, Puerto Rico, Texas, and Hawaii were leaders in the third quarter for residential installments. By 2026, according to Wood Mackenzie, this segment is anticipated to climb to 2.2 GW.
The numbers were lower in terms of community, commercial, and industrial storage deployments, with only 56.6 MWh installed in the third quarter. However, all segments are anticipated to grow steadily over the long-term forecast, bolstered by the strong demand from residential and grid-scale.
While elevated prices and supply chain challenges have pushed several projects further out, the pipeline remains strong. Active storage requests in the interconnection queue between 2022 and 2028 increased by 120 percent quarter-over-quarter.
“Some developers have considered delaying projects into 2023 to receive tax credits from the Inflation Reduction Act, but this only applies to a very niche segment of projects. In general, supply chain challenges and interconnection queue backlogs will push capacity to later in the forecast, with 2024-2026 seeing increases of 9-13 percent per year due to this,” Witte added.
