Post on 23-Apr-2020
Director, Energy Storage
manghani@gtmresearch.com
Ravi Manghani
The State of U.S. Storage Market Opportunities for Customers and Utilities
January 2017
1 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
News/Online
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Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Deployment Trends
3 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
-
10
20
30
40
50
60
70
80
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Deplo
ym
ents
(M
Wh)
Residential Non-Residential Utility
U.S. Energy Storage Market Has Grown In Fits And Starts U.S. Energy Storage Deployments (MWh)
Source: GTM Research/ESA U.S. Energy Storage Monitor
4 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Where Is Energy Storage Deployed So Far?
Residential Non-Residential Utility
California 31%
Hawaii 24%
All Other 45%
California 86%
All Other 14%
PJM 42%
California 36%
All Other 22%
U.S. Energy Storage Deployments (MWh), Cumulative Through Q3 2016
Source: GTM Research/ESA U.S. Energy Storage Monitor
Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Market Drivers
Key Wins in 2016
6 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Energy Cost Reduction
T&D Cost Reduction
Ancillary Services and Wholesale Market Cost Reductions
Reduced Peak Capacity
$275 M
$305 M
$397 M
$1,083 M
$219
M
Renewable
Integration Cost
Reduction
Source: State of Charge Report – Massachusetts Energy Storage Initiative
$2.3B in total potential
system benefits
The Value Of Energy Storage Is Increasingly Clear Potential System Benefits Highlighted by Massachusetts State of Charge Report
7 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan
Alison Canyon: 15 Months Of History
2015 2016 2017
40 MW of
capacity
scheduled to
come online in
SCE
Remaining 7 MW of
capacity scheduled to
come online in SCE and
37.5 MW of capacity
scheduled to come online
in SDG&E
Aliso Canyon
gas leak is
discovered
Governor
Brown declares
state of
emergency
California
energy
agencies
release action
plan
Gas leak is
permanently
plugged; SDG&E
launches
preferred
resource LCR
RFO
CPUC orders
SCE to undertake
“expedited
procurement” for
storage resources
to meet capacity
shortfall
SDG&E releases
plans to expedite
37.5 MW of
energy storage
projects with
AES
SCE
announces
winners
totalling 47 MW
of capacity
Initial leak lasts
118 days;
97,000 tons of
methane
released
Source: GTM Research
8 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Aliso Canyon Procurement Result Breakdown
SCE Procurements
1. Western Grid, 5 MW/20 MWh
2. Altagas-Greensmith, 20 MW/80 MWh
3. Tesla, 20 MW/80 MWh
4. Powin Energy, 2 MW/8 MWh
SDG&E Procurements
1. AES, 30 MW – 120 MWh
2. AES. 7.5 MW – 30 MWh
Aliso Canyon gas leak
site
1
4
2
SCE SDG&E
47 MW / 4 hr
duration
37.5 MW / 4 hr
duration
Multiple RFP
Winners
Single Awardee
Online 2016/2017 Online 2017
New procurements Expedited from
ongoing
procurement
Procurement data sources: SCE and SDG&E announcements and procurement websites, CA County Map
Source: California Elections Website http://www.sos.ca.gov/elections/map
2 3
1
9 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Proposed participation model must…
The Biggest Boost Yet: FERC Proposal, November 17
..ensure that storage resources are eligible to provide
all capacity, energy and ancillary services that they
are technically capable of providing
..incorporate bidding parameters that account for the
physical and operational characteristics of electric
storage resources
…establish a minimum size requirement for
participation that does not exceed 100 kW
Source: FERC Open Commission Meeting Staff Presentation Item E-1,
11/17/2016
10 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
$212
$502
$183 $161
$551
$416
$167
$5
$172
$645
22
29
24
32
39
35
38
0
10
20
30
40
$0
$200
$400
$600
$800
$1,000
2010 2011 2012 2013 2014 2015 Q1-Q3 2016
De
al C
ou
nt
Dis
clo
se
d V
alu
e (
Mill
ion
s U
SD
)
VC Project Financing Deal Count
Corporate Investments in Energy Storage at $660 Million in Q3 2016
Note: The total disclosed investment in 2014 was boosted by a rumored $250 million investment in Boston-Power (shaded in the figure above); Data excludes battery materials and upstream companies. 2014 data differs from U.S. Energy Storage
Monitor 2014 Year in Review due to the exclusion of EV startup Atieva and inclusion of stealth startup Fluidic Energy.
Disclosed Corporate Investments in Energy Storage, 2010-Q3 2016 (Million $, Number of Deals)
Source: GTM Research/ESA U.S. Energy Storage Monitor
Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Case Studies Are Worth Thousand Deployments…
12 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Option 1
Option 2
Option 3
$6,501/custom
er
Total = $488K
Residential Case Study: Green Mountain Power to Use Behind-the-Meter Storage to Reduce Peak Capacity and Transmission Costs
Forward
Capacity
Market
(75%)
Transmission
Costs (50%)
Total benefit
= $81K per
year
75 225 200
Total Grid Services Benefits = $205K per year
$6,501/custom
er
Total = $488K
Forward
Capacity
Market
(100%)
Transmission
Costs (70%)
Total benefit
= $124K per
year
Rate rider =
$37.5/month/
customer
Total = $91K
per year
Bill credit =
$31.8/month/
customer
Total = $81K
per year
Source: Green Mountain Power, GTM Research
System Sale/Lease
Cash Transaction
Grid Service
13 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Non-Residential Case Study: Demand Reduction for a Commercial Customer Bill Savings Opportunity
0%
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100%
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/14
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5 2
4
Sto
rag
e S
tate
of C
ha
rge
(%)
De
ma
nd
- W
ith
an
d W
ith
ou
t S
tora
ge
(kW
)
Baseline Demand (kW) After Storage Demand (kW) Storage SoC (%)
Source: GTM Research The Economics of Commercial Energy Storage in the U.S.: The Outlook for Demand Charge
Management
14 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Non-Residential Case Study: Medium C&I Energy Storage Returns Above 5 Percent in Seven Utilities in 2016, in 17 Utilities in 2021 (Base Case)
Source: GTM Research The Economics of Commercial Energy Storage in the U.S.: The Outlook for Demand Charge
Management
2016 C&I Energy Storage Economics
Source: GTM Research The Economics of Commercial Energy Storage in the U.S.: The Outlook for Demand Charge
Management
2021 C&I Energy Storage Economics (Base Case)
IRR 5%-
10% IRR 10%+
IRR 5%-
10% IRR 10%+
15 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Utility Case Study: KIUC Centralized Generation and Net Load Today
0
10
20
30
40
50
60
70
80
00:00 04:00 08:00 12:00 16:00 20:00
Ge
ne
ratio
n a
nd
Net
Syste
m L
oa
d (
MW
)
CT1 D6 D7 D8 D9 D1 D2 D3 D4 D5 GT1 GT2 S1 Solar, Hydro System Load
Source: KIUC, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam turbine.
Existing Centralized Solar and Hydro
Baseload Gas Combustion Turbine
As of October 14, 2015
16 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Utility Case Study: KIUC Centralized Generation and Net Load 13 MW Kapaia Solar Plant Addition
Source: KIUC, NREL PVWatts, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam
turbine.
0
10
20
30
40
50
60
70
80
00:00 04:00 08:00 12:00 16:00 20:00
Ge
ne
ratio
n a
nd
Net
Syste
m L
oa
d (
MW
)
CT1 D6 D7 D8 D9 D1 D2 D3
D4 D5 GT1 GT2 S1 Solar, Hydro KAPAIA Solar System Load
Adding more solar leads to
over-generation, causing
further stress on baseload
fossil fuel plant
17 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
Utility Case Study: KIUC Centralized Generation and Net Load
13 MW Kapaia Solar Plant Plus 13 MW/52 MWh Storage Plant Addition
Source: KIUC, NREL PVWatts, GTM Research. CT = Combustion turbine, D = Diesel engine, GT = Gas turbine, S = Steam
turbine.
0
10
20
30
40
50
60
70
80
00:00 04:00 08:00 12:00 16:00 20:00
Ge
ne
ratio
n a
nd
Net
Syste
m L
oa
d (
MW
)
CT1 D6 D7 D8
D9 D1 D2 D3
Combining storage with solar not only relieves stress
on baseload generation, but can also eliminate
operation of inefficient fossil fuel plants and reduce
carbon emissions
Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
U.S. Storage Market Outlook
19 Manghani - The State of U.S. Storage Market - 2017 AEENE Annual Energy Outlook Forum
260
2,045
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E 2021E
Dis
ch
arg
e D
ura
tion
(Ho
urs
) E
ne
rgy S
tora
ge
De
plo
ym
en
ts b
y S
egm
en
t (M
W)
Residential Non-Residential Utility Discharge Duration
U.S. Energy Storage Annual Deployments Will Exceed 2 GW by 2021 Market to Move to More Medium-to-Long Duration
Source: GTM Research/ESA U.S. Energy Storage Monitor
Behind-the-meter segments
will be ~50% of annual
storage market by 2021
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Thank you!
January 2017