Dive Brief:
- In a major affirmation of the emerging battery energy storage market, AES Corp will add 1,000 MW of storage capacity in Europe and new U.S. markets.
- Already in development by AES Energy Storage, the plans will hugely expand the company's world-leading 86 MW of operational capacity in the U.S. and Chile. Of the planned 1,000 MW, 260 MW are already in late stage development or being installed.
- The energy storage industry was valued at just $200 million in 2012 but is expected to grow to $19 billion by 2017, according to IHS CERA. Systems typically cost below $1,000 per kW but can also be “substantially less,” according to AES. AES did not disclose its battery suppliers.
Dive Insight:
Over half the utility executives queried in Utility Dive’s recent State of the Electric Utility 2015 survey picked energy storage as the most important emerging technology.
Battery energy storage is proving cost effective at providing peak shaving and stabilizing services as variable resources are added. Key market drivers are the falling price of lithium ion batteries and government mandates.
U.S. energy storage capacity grew 40% from 2013 to 2014 but is expected to triple in 2015 to 220 MW. Growth is expected to continue through at least 2019, according to the GTM Research-Energy Storage Association U.S. Energy Storage Monitor 2014 Year In Review.
Utility project growth will likely slow in 2016 and then increase steadily to over 800 MW of installations in 2019, with cumulative deployments of over 2.5 GW. Most U.S. energy storage deployments will be in a few markets that have the right policy, regulatory drivers, and wholesale market designs.
As part of its expansion, AES will build its first utility scale project in the Midcontinent Independent System Operator territory. It is already developing battery energy storage in the California ISO and PJM territories.
