- Energy Storage
- Utility Technologies
- Utility-Scale Energy Storage
The Evolution of Energy Storage Systems Integrators
Competition in the utility-scale energy storage market is intensifying as the number of new projects being built and the experience of leading energy storage providers continue to grow. This is the result of demonstrated appetite for energy storage from policymakers, regulators, and utilities. Navigant Research recently published its Navigant Research Leaderboard: Utility-Scale Energy Storage Systems Integrators report, which highlights the increasing competition around the world as companies become more specialized and leverage diverse backgrounds to bring compelling solutions to the market. The report compares the various strategies companies are adopting, and which have proven to be the most successful to date.
Navigant Research defines energy storage system integration as:
Software and controls-based integration of core energy storage technology into complete, intelligent systems that deliver the performance required by the customer while ensuring the overall profitability of the system.
Advanced software is critical for successful energy storage system integration and is a focus for all leading integrators. However, the leading companies in this market come from a range of backgrounds that allow them to build sophisticated projects that require expertise beyond software and controls. Leading systems integrators are largely grouped into four categories based on their corporate backgrounds:
- Software Focused: Greensmith, Powin Energy, Doosan GridTech, Younicos
- Renewable Project Development: RES, Tesla, NextEra Energy Resources
- Power Grid Technology and Equipment: Nidec ASI, NEC Energy Solutions, LG CNS, GE Energy Storage
- Utility Ownership and Independent Power Producers: Fluence, NextEra Energy Resources
The figure below illustrates how Navigant Research views systems integrators competing in the market, showing the mix of different backgrounds for companies at each level and the lack of correlation between corporate background and success.
The Navigant Research Leaderboard Grid
(Source: Navigant Research)
A key trend in this market over the past 2 years has been the shift companies are making from a focus on turnkey project development (including systems integration), to a more pure-play systems integrator and operator role. Although many leaders still offer turnkey project development as it may be preferred by certain customers, the overall market is trending toward specialized systems integrators being hired by project developers.
This shift is largely due to the continued maturation of the energy storage industry. When the first projects were being built, utility-scale energy storage was an unproven and largely untested technology that was not universally trusted by utilities and grid operators. As a result, systems integrators were required to take on more risk and handle most aspects of project development and financing in-house to get a project built. The industry has now progressed to the point of having more dedicated project developers focusing on both standalone energy storage and combined renewables-plus-storage projects. This transition has occurred as systems integrators have become better at optimizing the value of energy storage across multiple revenue streams for different customers using sophisticated software and controls. The greater assurance of project success has enabled the introduction of pure-play project developers that have confidence in the guarantees that integrators can offer for a project’s revenue streams and reliability.
Due to the greater confidence customers and financiers now have in utility-scale storage projects, systems integrators can focus on their core competencies around software development, system design, and ongoing system operation and optimization. Furthermore, integrators are no longer seen as competing with other project developers (which may become their customers). The evolution of the industry over the coming years will see energy storage frequently paired with other grid resources including both renewable and conventional generation plants, bringing in new stakeholders and project developers as customers. The leaders identified in Navigant Research’s recent report are well positioned to offer increasingly sophisticated and cost-effective energy storage solutions that will meet the needs of the new customers that emerge.