1Q 2019

How Utilities Can Look Beyond Natural Gas with Cost-Effective Solar Plus Storage Strategies

The utility-scale energy storage market has grown steadily since 2011. In the past 7 years, 8,934.7 MW of non-pumped hydro storage projects have come online. The technology risk and cost associated with energy storage systems decreased rapidly, with Lithium ion (Li-ion) batteries leading market share for advanced batteries. Li-ion accounts for 29.4% of the non-pumped storage capacity installed and 70% of the advanced battery capacity deployed since 2011.

Energy storage is being developed in tandem with renewable resources at competitive prices. This storage plus renewables (storage-plus) development is enabling a transition of large-scale renewables from intermittent assets to dispatchable resources able to displace thermal assets, thereby changing the solicitation environment. Navigant Research expects storage-plus Power Purchase Agreement (PPA) prices to fall as adoption of this technology expands. In 2018, storage-plus made its first shift from the validation and first-mover adopters to diffuse adoption led by utilities. The accurate valuing and positioning of storage-plus by utilities will continue to drive the market in coming years as storage-plus PPAs are already less expensive than levelized cost of energy for combined cycle natural gas in the US.

This Navigant Research report tracks the North American market for utility-scale storage-plus adoption and PPA prices. The study provides recommendations for utilities and regulators globally to take advantage of storage-plus plants to meet flexibility, reliability, and renewables targets using all-resource solicitations. The report provides estimates of market trends into 2021. It also examines a variety of market trends and use cases around the globe.

Pages 9
Tables | Charts | Figures 2
  • Which advanced battery type is leading in advanced battery technology market share, and why?
  • What is the trend in storage-plus adoption and PPA prices?
  • What factors are driving the adoption and price changes for storage-plus?
  • How is the storage-plus market expected to develop moving forward?
  • What must utilities and regulators do to take full advantage of optimized utility-scale storage and renewables?
  • Utilities
  • Electricity regulators
  • Energy storage project developers
  • Li-ion battery OEMs
  • Government agencies
  • Non-governmental organizations
  • Investor community

Spark 

Context

Recommendations

Lithium Ion Scales, Pairs with Solar PV, Wind

Li-Ion Leads a Market of Diverse Technologies

Storage-Plus PPA Prices Decline Rapidly

Renewables with Storage Will Increasingly Challenge Thermal Assets as Competitive, Dispatchable Resources

Storage-Plus Resources Address Emerging Utility Planning Challenges

Utilities and Regulators Must Lead Instead of Follow

All-Resource Solicitations Are Paramount

Utilities Must Invest in Advanced Distribution Planning 

Utilities Must Partner with Stakeholders to Develop Energy Storage Contract Standards

Regulators Must Foster a Supportive Learning Environment for Utilities

  • Solar Plus Storage PPAs in North America, 2017-2018 
  • Market Progression for Energy Storage and Energy Storage-Plus 


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