January 22, 2020
Public Utilities: The New Buyers of Energy Storage
There’s no doubt that 2019 was a tipping point for announcements from investor-owned utilities about large-scale new energy storage and hybrid storage projects. We also witnessed dramatically increased project sizes and combination approaches, with stunning price decreases and shorter deployment schedules.
Between 2016 and 2019, approximately 28 U.S. utilities proposed nearly eight gigawatts of storage. And some of the multi-hundred-megawatt procurement announcements by large investor-owned utilities like Nevada Energy, Arizona Public Service, Florida Power and Light, Hawaiian Electric Company, and Southern California Edison are indeed record-breaking.
However, I posit 2020 will be a turning point year for municipal and cooperative utility storage procurements. Exciting recent announcements — such as California’s Community Choice Aggregators, Oklahoma’s Western Farmers Electric Cooperative, Homer Electric Association, and Kauai Island Utility Cooperative — are equally eye-opening, and a harbinger of further larger demand ahead.
The fact is, energy storage deployments are accelerating as fast, or even faster, than we’ve witnessed over the last decade with solar power. And storage prices continue to decrease rapidly. In fact, a new UBS study estimates battery energy storage prices will continue to drop: 66-80% by 2030, driving further growth and revolutionizing America’s energy, transportation, and other industries. This fast growth will require a new approach to long-term grid planning, including prioritization of the multiple services that storage provides (e.g., capacity, transmission alternative, frequency regulation, demand management, and so on) in the near- and long-term plans for these assets. And both investor-owned and public utilities will need to determine if and how distribution-connected storage should be utilized for infrastructural support and resilience planning. In the meantime, energy storage technologies, services, and costs continue to rapidly evolve.
To help inform these new public sector buyers, the U.S. Energy Storage Association (ESA) is focused more than ever on the details of real-world performance; new microgrid and resilience planning; new insurance, finance, and warranty products and trends; operational safety standards and guidelines; end-of-life and recycling; and new contracting terms and conditions for the hybrid fleets of “storagePLUS” — grid storage with solar, wind, gas, and e-mobility.
In April, the 2020 ESA Energy Storage Annual Conference & Expo will delve deeply into those critically important procurement topics to meet an anticipated surge in utility attendance, driven by the attractive prices and value of storage services. #ESACon20 is the premier educational and deal making event, held by the nation’s central source of information on energy storage. This year, #ESACon20 will also feature a BUYERS delegation, where investor-owned utilities, municipal and cooperative utilities, and other buyers can meet privately to share procurement lessons learned and receive facilitated meetings by ESA with the industry’s top developers. I hope you’ll join us at #ESACon20, April 8-10, in Pittsburgh PA, where the industry’s top experts, partners, and buyers convene.