Energy Storage for Renewables Integration

Energy Storage Integrated with Utility-Scale Solar PV, Utility-Scale Wind, and Behind-the-Meter Generation: Drivers, Barriers, and Global Market Forecasts

The costs to develop new renewable energy projects continue to drop around the globe while policy incentives, target capacity mandates, and resilience demand for behind-the-meter (BTM) customers continue to increase. As a result, capacity for wind and solar PV continue to rise in all regions and market segments—from small residential systems to utility-scale systems. While this prospect is exciting in terms of global sustainability and greenhouse gas reductions, the large-scale addition of these variable forms of generation presents challenges to an electrical grid and industry that is slow to keep up with modern technology.

These challenges vary depending on the dynamics of the local grid, interconnection regulations, and the generation source. Energy storage systems (ESSs) can help mitigate potential grid concerns and integrate renewable energy resources without affecting grid reliability. The argument for energy storage for renewables integration (ESRI) relies on several different factors, including the condition of the local grid, the type and amount of renewable generation, and incentives and subsidies, among others. The lack of consistency among regions and even countries within the same region proves to be another barrier to the deployment of ESSs as developers struggle to create standardized systems and financing options that are deployable on a large scale. Additionally, declining costs of renewable generation, solar PV especially, are creating unique challenges for the energy storage market.

This Navigant Research report examines the global market for ESRI, with a focus on six utility-scale, commercial and industrial, and residential applications. The study provides an analysis of the market issues, including business cases, drivers, and barriers, associated with ESRI. Global market forecasts for capacity and revenue, segmented by application and region, extend through 2026. The report also examines the key technologies and costs related to utility-scale and BTM renewables plus energy storage, as well as regional policy incentives and resources for ESRI.

Key Questions Addressed:
  • What are the leading business cases for energy storage for renewables integration (ESRI) at the residential, commercial and industrial, and utility-scale levels?
  • What barriers remain for energy storage systems (ESSs) integrated with utility-scale and behind-the-meter (BTM) renewable generation?
  • What is the value of energy storage for wind and solar energy applications to wholesale energy markets?
  • How large is the ESRI market, in terms of capacity and revenue, by application and region?
  • How quickly will the market grow and what are the key demand drivers?
Who needs this report?
  • Energy storage technology vendors and service providers
  • Wind energy equipment manufacturers, project developers, and plant operators
  • Solar PV equipment manufacturers, project developers, and plant operators
  • Power system suppliers and major electronics firms
  • Energy storage/battery component suppliers
  • Utilities and grid operators
  • Government agencies
  • Investor community

Table of Contents

1. Executive Summary

1.1   Overview

1.2   Market Developments

1.3   Market Forecasts

2. Market Issues

2.1   Energy Storage for Renewables Integration Market Overview

2.2   Utility-Scale Renewables Plus Energy Storage

2.2.1   Utility-Scale Solar PV Plus Energy Storage Applications

2.2.1.1   Grid Services

2.2.1.2   Ancillary Services

2.2.1.3   Curtailment Reduction

2.2.1.4   Vertically Integrated Utilities

2.2.2   Barriers for Utility-Scale Solar PV Plus Energy Storage

2.2.2.1   Declining Solar PV Costs

2.2.2.2   Solar PV Systems Providing Ancillary Services without Energy Storage

2.2.3   Utility-Scale Wind Plus Energy Storage Applications

2.2.3.1   Curtailment Avoidance

2.2.3.2   Ancillary Services

2.2.3.3   Feed-In Premiums

2.2.3.4   Capacity Requirements

2.2.4   Barriers for Utility-Scale Wind Plus Energy Storage

2.2.4.1   Limited Ancillary Services Market

2.2.4.2   ESS Costs versus Cost of Wind Energy Curtailment

2.2.5   Utility-Scale Energy Storage Costs

2.3   BTM Solar PV Plus Energy Storage

2.3.1   C&I Solar PV Plus Energy Storage Applications

2.3.1.1   Reduced Demand Charges

2.3.1.2   Lower System Costs Compared to Residential

2.3.1.3   Sustainability and Resilience

2.3.1.4   Financing Mechanisms

2.3.2   Barriers to C&I Solar PV Plus Energy Storage

2.3.2.1   Incentives for Standalone Solar PV

2.3.2.2   Unsuitable Rate Structures

2.3.2.3   Rooftop Solar PV Feasibility Limitations and Strict Payback Requirements

2.3.3   Residential Solar PV Plus Energy Storage Applications

2.3.3.1   Reduced Incentives for Standalone Solar PV

2.3.3.2   Resilience

2.3.3.3   Financing Mechanisms and Business Model Innovation

2.3.4   Barriers to Residential Solar PV Plus Energy Storage

2.3.4.1   Incentives for Standalone Solar PV

2.3.4.2   Higher System Cost and Retail Rate Structures

2.3.4.3   Lack of Space

2.3.5   BTM Energy Storage Costs

2.4   Regional ESRI Market Issues

2.4.1   North America

2.4.1.1   California

2.4.1.2   New York

2.4.2   Western Europe

2.4.2.1   Germany

2.4.3   Asia Pacific

2.4.3.1   Australia

3. Market Forecasts

3.1   Introduction

3.2   Methodology

3.3   Global Market Forecast

3.3.1   North America

3.3.2   Western Europe

3.3.3   Eastern Europe

3.3.4   Asia Pacific

3.3.5   Latin America

3.3.6   Middle East

3.3.7   Africa

3.4   Conclusions and Recommendations

3.4.1   Utility-Scale Solar PV Plus Energy Storage

3.4.2   Utility-Scale Wind Plus Energy Storage

3.4.3   BTM Solar PV Plus Energy Storage

3.4.3.1   C&I Solar PV Plus Energy Storage

3.4.3.2   Residential Solar PV Plus Energy Storage

4. Acronym and Abbreviation List
5. Table of Contents
6. Table of Charts and Figures
7. Scope of Study, Sources and Methodology, Notes

List of Charts and Figures

  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Region, World Markets: 2017-2026
  • Annual Installed Utility-Scale Wind, Utility-Scale Solar PV, and Distributed (C&I and Residential) Solar PV Capacity by Region, World Markets: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, World Markets: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, North America: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Western Europe: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Eastern Europe: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Asia Pacific: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Latin America: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Middle East: 2017-2026
  • Annual Installed ESRI Power Capacity Additions and Total Revenue by Application, Africa: 2017-2026
  • Maximum Demand Charge Rates by Utility Service Territory, US
  • Energy Storage Plus Solar PV Operation for C&I Buildings

List of Tables

  • Estimated Average Variable Generation Curtailment Rates in Select Countries, Most Recent Data Available
  • Utility-Scale Energy Storage System Installed Cost (CAPEX) Assumptions by Technology, Global Averages: 2017-2026
  • Distributed (BTM) Energy Storage System Installed Cost (CAPEX) Assumptions by Technology, Global Averages: 2017-2026
  • Average FIT (Solar Compensation) Rates and Retail Electricity Rates in Select Countries: 2017
  • Annual Installed Utility-Scale Wind Capacity by Region, World Markets: 2017-2026
  • Annual Installed Utility-Scale Solar PV Capacity by Region, World Markets: 2017-2026
  • Annual Installed Distributed (C&I and Residential) Solar PV Capacity by Region, World Markets: 2017-2026
  • Annual Installed Utility-Scale Wind, Utility-Scale Solar PV, and Distributed (C&I and Residential) Solar PV Capacity by Region, World Markets: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Region, World Markets: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, World Markets: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Region, World Markets: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, World Markets: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Region, World Markets: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, World Markets: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, North America: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, North America: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, North America: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Western Europe: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Western Europe: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Western Europe: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Eastern Europe: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Eastern Europe: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Eastern Europe: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Asia Pacific: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Asia Pacific: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Asia Pacific: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Latin America: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Latin America: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Latin America: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Middle East: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Middle East: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Middle East: 2017-2026
  • Annual Installed ESRI Power Capacity Additions by Application, Africa: 2017-2026
  • Annual Installed ESRI Energy Capacity Additions by Application, Africa: 2017-2026
  • Annual Installed ESRI Deployment Revenue by Application, Africa: 2017-2026

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