US grid-scale storage installations surged 60% in second quarter record as prices continue to drop
Report by American Clean Power Association and Wood Mackenzie found that every segment expanded even as some players chose to wait out election
The US installed a second quarter record 2.77GW/ 9.98GWh of grid-scale energy storage capacity, a 59% surge over the same quarter last year, according to latest data from Wood Mackenzie and American Clean Power Association (ACP).
Total installed storage capacity reached 3.01GW/10.49GWh deployed, the second-highest quarter on record behind Q4 2023 at 13.4GWh.
California, Arizona, and Texas were responsible for 85% of installations. Consistent with prior quarters, California produced the highest MWh installations with 4.49GWh, while Arizona had 2.6GWh and Texas ended at 1.2GWh.
“Energy storage is becoming a mainstay of the power grid, delivering a more resilient and affordable grid,” said John Hensley, SVP of markets and policy analysis for ACP.
“Additional storage capacity across US markets is helping to provide a cost-effective and reliable solution to serious problems such as rising energy demand, a timely need for more overall capacity, and more volatile and extreme weather events.”
Hensley noted that momentum in the segment relies on solving “development challenges such as lengthy interconnection queues and permitting and siting.”
Vanessa Witte, senior analyst with Wood Mackenzie’s energy storage team, said that while grid-scale storage continues to drive the market and CCI performed strongly, residential expansion slowed as “California's meteoric growth faltered, combined with low installations in Hawaii and Puerto Rico, which continue to be affected by incentive changes.”
Wood Mackenzie forecasts that total US storage deployments in 2024 will rise 42% compared to last year to reach 12.8GW/ 36.9GWh.
Grid-scale storage is projected to increase 32% year-over-year in 2024 with 11GW/32.7 GWh deployed by year-end, and 62GW cumulatively from 2024-2028.
Grid-scale storage system prices failed to maintain the precipitous declines seen in Q1 and fell only by a further 4% in the second quarter. Lithium prices declined slightly in Q2 after steadying through Q1 and following massive declines at the end of last year.
The report noted that further growth was muted as some potential market entrants have adopted a “‘wait and see’ mentality until the elections take place in November.
Five-year forecast
While growth remains robust this year, Wood Mackenzie forecasts that storage capacity additions will “level out as deployments increase with an average annual growth rate of 7.6% between 2025 and 2028.”
The consultancy expects 12GW of distributed storage to be deployed over the next five years, led by residential at 80% of the total.
It also lowered its forecast for the CCI segment “modestly” from previous predictions on early-stage development challenges and now expects the US to install 2.5GW between 2024 and 2028.
“The CCI segment continues to experience high barriers to growth including the complexity of developing these projects and the limited availability of financial value streams,” said Witte.
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