Energy Storage on the Westcoast

The US energy storage market has profited immensely from the steady growth of renewable energies in the past years. According to estimates, around 240 billion USD will be invested into energy storage systems the coming 10 years. Federal funding for energy storage is noteworthy. As part of the American Recovery and Reinvestment Act (ARRA), the Department of Energy (DOE) provides funds of around 185 million USD to encourage energy storage projects with a volume of 772 million USD. In addition, the Energy Independence and Security Act of 2007 requires the DOE to establish a four Energy Storage Research Centers.

Most important facts about Energy Storage in the U.S.:

  • Market drivers include investments in smart grids and micro grids, the growing need for energy security, the steady growth of renewable energy, as well as state regulations and subsidies. 
  • California has taken on a pioneer role when it comes to energy storage.
  • The state of California offers numerous subsidies for the implementation of energy storage. For instance, since 2009 energy storage is being considered for Self-Generation Incentive Program (SGIP) subsidies. In 2012, energy storage accounted for 84% of applications for SGIP subsidies.
  • The Permanent Load Shifting (PLS) program of the California Public Utilities Commission (CPUC) promotes the development of energy storage in California. As part of this program, the CPUC provides around 32 million USD in funding, as well as up to 1.5 million USD for individual energy storage projects.
  • In June 2013, the CPUC published a draft proposal outlining new procurement strategies for energy storage in California. Amongst other things, the proposal plans energy storage of 1.3 GW across the three biggest private utilities until 2020.
  • The publication of the CPUC draft proposal is the result of a process that started with the passage of the California Assembly Bill 2514 in 2010. This is the first state law that actively promotes energy storage. The procurement strategy of the draft proposal plans outlines a Reverse Auction Mechanism in order to determine binding goals for the integration of energy storage into California’s power supply. The first auction is scheduled for June 2014.
  • At present estimates, if the average price for energy storage were to settle at around 700 – 750 USD per KWh, the US market could, according to forecasts, reach a capacity volume of around 14 GW. At a price at or below 500 USD per KWh, the market could even double.
  • Today, a total of 143 energy storage projects are operational, of which 36 are located in California. 28 projects are under construction, of which 11 are located in California. An additional 8 projects have been announced; 2 are planned for California.
  • In the San Francisco Bay Area alone, 30 energy storage Start-Ups have been identified.
  • Investments in energy storage system have seen tremendous growth. Between 2011 and 2012, energy storage companies raised around 630 million USD. These investments represented 11% of the state’s clean tech venture capital investments between 2010 and 2011.
  • Statewide battery patent filings numbered 258 between 2008 and 2010.

Sources: Navigant Research (June 2, 2013): Energy Storage Gets a Boost in California; Greentechgrid (June 11, 2013): California Sets Energy Storage Target of 1.3GW by 2020; Energy Storage Journal (November 2012): California’s AB 2514: Storage Policy in Action; Gigaom (April 29, 2011): 5 Things You Need to Know About Energy Storage