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SEPA finds big US growth in battery storage, paves way for smart grid

The Smart Electric Power Alliance (SEPA) has published its survey of US utilities, and has some promising findings for smart grid advocates. Grid-scale battery storage capacity has grown 68% in the past year, up to 1.3 GWh, with longer-duration batteries becoming more prevalent. Residential storage was the strongest performer, growing some 317%.

The longer duration units make it important to clarify that there are two ways of measuring battery capacity – how much energy it can hold (in watts), and how long you can run it for (in watt-hours). Watts measure power, while watt-hours measure energy. Essentially comparable to the difference between speed and distance, with batteries, watt-hours are telling you how long you can run the battery for.

This is why the longer duration batteries are going to create bigger rises in MWh, rather than in MW. A 1MW appliance running for an hour will use 1MWh of energy, but the same appliance running for two hours is going to use 2MWh. With batteries, things get a little wonky, as the batteries have finite capacities.

As such, you could run a 1MW battery for an hour and get 1MWh of energy, if it can discharge at that capacity, or you could run it at a lower discharge rate for two hours and measure it as a 2MWh unit – the difference is that you would be supporting fewer users, as the available power through those two hours is lower. The balancing act is, for instance, supporting more homes’ demand for less time, or fewer homes for longer.

This is why there isn’t a linear relationship between the numbers found by SEPA, when it comes to MW and MWh. The total amount of battery capacity added to the US grid in 2017 was 217 MW, or 524 MWh. As it stands, SEPA believes 922.8 MW of energy storage has been deployed, accounting for 1,293.6 MWh, in 5,167 systems.

From 2016 to 2017, the residential capacity additions grew 202% in MW, but 317% in MWh. Non-residential, grew 9% in MW and 105% in MWh. Utility storage grew 89% in MWh, and accounted for the majority of the 217 MW added in total, at 144 MW. Collectively, there was a 31% growth in MW, and a 68% growth in MWh.

In the past three years, SEPA says battery prices have fallen 20%, but points to new energy market mechanisms as another important driver. California, Hawaii, and Texas are hotspots for storage, with Illinois, Indiana, and Ohio ahead of most but markedly behind the leaders. There are still a lot of states, 14 by our count, that have zero megawatt hours deployed.

SEPA believes that this will change, that storage deployments will accelerate across the board. SEPA Senior Research Associate Nick Esch said “nationally, the storage market is quite nascent. However, state policy action and regulatory action are creating opportunities in local energy storage markets.”

California was responsible for adding 75% of the incremental battery energy capacity, and now represents 60% of total US cumulative capacity. However, Hawaii has a lot more storage per customer, with the Kauai Island Utility Cooperative (KIUC) having a 13MW/52MWh solar-plus-storage system that provided 2,036 Wh of storage per customer at year end.

That contrasts with San Diego Gas and Electricity, the Californian utility that scored highest in this same test – at just 151 Wh per customer. However, SDG&E is much bigger, with far more customers, and has installed considerably more total storage.

As it stands, Californian utilities take the top three spots in MWh storage capacity, with SCE on 376.6 MWh, SDG&E on 215.4 MWh, and PG&E on 156.3 MWh. Hawaii’s KIUC is in fourth place, on 67.1 MWh, followed by Illinois’ Commonwealth Edison on 61 MWh. Texas’ AEP is in sixth place, and well off the pace, on just 24.2 MWh.

SEPA’s snapshot is in its second year, and polled 137 electric utilities that serve a collective 58% of US customers. It is focused on battery storage, but also includes flywheel storage and compressed air.

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