The market for grid-scale batteries may be growing, but it still needs training wheels.
Developers deployed a record 1.17 gigawatts of energy storage in 2017, up 4.6 percent from the previous year as growth in Asia was offset by a slight decline in the Americas, according to a report released Tuesday from Bloomberg New Energy Finance. Installations grew by 61 percent in 2016.
“We expect the energy storage market to grow sixfold from 2016 and 2030,” said Logan Goldie-Scot, head of energy storage analysis for Bloomberg New Energy Finance and lead author of the report. “However, it is currently a fragile market, reliant on policy support in most countries — and this makes the growth patchy.”
Batteries are seen as the linchpin to integrating a growing amount of intermittent solar and wind energy that is increasingly flowing onto grids across the globe. Energy storage can soak up excess renewable power and then discharge it when the sun isn’t shining or the wind isn’t blowing. The average price of a battery pack fell 24 percent in 2017 to $209 a kilowatt-hour, bringing the cost into closer competition with other grid resources, BNEF said in the report.
South Korea led the way last year, installing more storage capacity than any other nation, with 406 megawatts installed in 2017, according to the study. The country’s policies support adoption of batteries by offering incentives such as discounts on electricity rates for commercial and industrial customers who deploy systems.
In North America, last year was a transitional one as regulators and utilities worked to figure out the best uses for the technology, Goldie-Scot said. Developers across the Americas added 522 megawatts, down 3 percent from 2016. Newly proposed storage targets in U.S. states including New York and Arizona should set the stage for more additions, he said.
In addition, U.S. regulators are expected to take action on a proposed order Thursday that would allow for more integration of batteries into wholesale markets.