The State of Global Energy Storage Markets

woodmac.comTrusted intelligence
The State of Global Energy Storage Markets
2018 recap and five bold (and not-so-bold)
2019 predictions
Ravi Manghani
Director, Energy Storage
@RaviManghani

2018 has been the year of behind-the-
meter segments

2018 through Q3 deployments total 424 megawatt-hours
YOY megawatt-hour growth tripled as average discharge duration increases
Source: Wood Mackenzie Power & Renewables/ESA
Front-of-the-meter Non-residential Residential
0
50
100
150
200
250
300
2016 2017 2018
0
20
40
60
80
100
120
2016 2017 2018
0
20
40
60
80
100
120
140
160
2016 2017 2018

Utility segment will bounce back in
2019!
1

FERC 841 drama is over, 2019 will be all about market
implementation
Source: Wood Mackenzie Power & Renewables, FERC
ISO/RTO Participation model and resource categories Market participation eligibility
CAISO – requested effective date of
December 3, 2019
Already compliant – Non-generator resources, Pumped
Storage Hydro Units, and Demand Response providers
Already compliant
ISO-NE - requested effective date of
December 3, 2019
Defines Continuous Storage Facilities (will also register as
Alternative Technology Regulation Resource (ATRR)) and
Binary Storage Facilities
CSF must be able to switch on and off quickly, forced to be
ATRR, which limits it to regulation. BSF aimed towards
pumped hydro
Still registering as generator / load simultaneously
MISO - requested effective date of
December 3, 2019
Electric Storage Resource (ESR) will be created
Eligibility across capacity, energy, A/S (including black start
and voltage support)
NYISO – requested effective date of May
2020
Electric Storage Resource (ESR) will be created
Participation for non-continuous resources is still under the
Energy Limited Resource model (ELR)
PJM - requested effective date of February
3, 2019 for retail / wholesale pricing portion,
December 3, 2019 for the rest
Existing energy Storage Resource (ESR) and Capacity
Storage Resource (CSR) will be modified
Removes restriction of purchasing from PJM to “market
buyers” only
CSR for capacity market now includes all ESRs
SPP - requested effective date of
December 3, 2019
Energy Storage Resource (ESR) and Market Storage
Resource (MSR)
ESR, mainly pumped hydro, would not be Order 841
compliant

2018 saw record low solar-plus-storage
PPAs

Solar-plus-storage levelized prices hit record lows
NV Energy and Xcel Colorado winning bids
Source: Wood Mackenzie Power & Renewables, NV Energy, Xcel Colorado
$18.1
$29.5
$36.0
$0
$5
$10
$15
$20
$25
$30
$35
$40
Levelizedprices($/MWh)
Winning range ($/MWh) Median price ($/MWh)
Wind
Solar
Solar-plus-
storage

[CELLRANGE]
[CELLRANGE]
$18.1
$29.5
$36.0
$0
$5
$10
$15
$20
$25
$30
$35
$40
Wind
Solar
Solar-plus-
storage
NV Energy
Solar & Solar-plus-
storage

[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
[CELLRANGE]
$18.1
$29.5
$36.0
$0
$5
$10
$15
$20
$25
$30
$35
$40
Wind
Solar
Solar-plus-
storage
NV Energy
Solar & Solar-plus-
storage

More records will be broken before ITC
window closes
2

Solar-plus-storage LCOEs awfully close to CCGTs, already lower than
nuclear and coal
2018 LCOE map ($/MWh, by technology and state)
Source: Wood Mackenzie Power & Renewables
Nuclear
$105/MWh
$102-$127
Coal
$67/MWh
$56-$84
CCGT
$39/MWh
$34-$50

Corporate storage offtake will take-off
in 2019
2a

Corporate off-takers are looking to align consumption with clean
generation
Source: Wood Mackenzie Power & Renewables, Microsoft, Google, Kaiser Permanente
Microsoft - Proxy
generation PPA
Google - 24x7 carbon-
free energy
Kaiser Permanente -
2020 carbon neutrality
Wind farm generation: 50 MW
Solar farm generation: 131 MW
Battery storage capacity: 110 MW

PG&E had the largest round of storage
procurement

PG&E procured 567.5 megawatts to support South Bay-Moss Landing sub-area
local capacity requirement
Source: Wood Mackenzie Power & Renewables, PG&E, CAISO
Counterparty
(Project Name)
Connection Point
Term
(years)
Size
(MW)
Dynegy Marketing and Trade,
LLC (Vistra Moss Landing
Energy Storage)
Transmission 20 300
Hummingbird Energy Storage,
LLC (Hummingbird Energy
Storage)
Transmission 15 75
Micronoc Inc. (mNOC AERS
Energy Storage)
Customer (Behind
the Retail Meter)
10 10
Tesla, Inc. (Moss Landing
Energy Storage)
Transmission 20 182.5
0
500
1,000
1,500
2,000
2,500
3,000
2018 2019 2020 2021 2022 2023 2024 2025
SouthBay-MossLandingLCR(MW)
Muni Los Esteros
Agnews Gilroy Energy Center
Gilroy Cogen Moss Landing 1
Moss Landing 2 Metcalf
LCR Need - Category C

Gas peakers will continue to lose favor3

6.4 GW or 32% of new peaker capacity at risk from 4-hour storage
by 2027
In aggressive case, 82% of new peaker capacity at risk from 8-hour storage by 2026
6,393
6,923
3,229
1,780
786
342 247 384
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
<=4 <=6 & >4 <=8 & >6 <=10 & >8 <=12 & >10 <=14 & >12 <=16 & >14 >16
EstimatedNewGasPeakingCapacity(MW)
Hours/Per Start
Base Case: 6.4 GW, 32% of New
Capacity at Risk by 2027
Aggressive Case: 16.5 GW, 82% of New
Capacity at Risk by 2026

Lithium-ion technology investments
crossed $500 million this year

More than $500 million invested in alternate battery technologies
this year
Major investments in alternate battery technologies, Pre-2017 to 2018 ($, millions)
$90
$34
$100
$40
$60
$65
$233
$70
$20
$20
$8
$0
$100
$200
$300
$400
$500
Pre-2017 2017 2018 (till date)
Investments
Undisclosed
solid-state
technology
Undisclosed
Undisclosed
Planning to Sell
& Others
& Others
& Others

Industry will revert to lithium iron
phosphate in 2019
4

Cobalt prices and lithium-ion manufacturing availability will accelerate
battery supply divergence
Source: Wood Mackenzie Battery Raw Materials Service, and Power & Renewables
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
2016 2017 2018 2019E
Cobaltprice,LMEcash($/ton)
0
50
100
150
200
250
300
2017 2018 2019E 2020E
NMC+LFPmanufacturingcapacity
(GWh)

U.S. won’t be the largest storage
market this year!

U.S. is not the largest storage market this year!
2018 annual energy storage deployments (GWh)
1.07
0.69
4.68
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
South
Korea
United
States
China Australia Japan Germany Rest of
World
United
Kingdom
Canada India Total
South Korea offered 5X REC to spur KRW 440 billion (app.
USD 393.9 million) investments in energy storage, result in
800 MWh storage by 2020. Market has already overshot
this goal.

U.S. will regain the #1 spot in 20195

U.S. will regain the top spot from South Korea, as the global market
grows to 7.9 gigawatt-hours in 2019
United
States
21%
South
Korea
16%
China
15%
Japan
12%
Australia
11%
Others
25%
0
1
2
3
4
5
6
7
8
9
2017 2018 2019E
Annualenergystoragedeployments
(GWh)

Thank You!
Questions?
Ravi Manghani
Director, Energy Storage
ravi.manghani@woodmac.com

The State of Global Energy Storage Markets

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