2019: Energy Storage Developments In The Last Twelve Months

Over the past few years, we have provided annual updates on the topic of energy storage in North America and elsewhere (see here, here and here). Each year we have highlighted the growing prominence of the energy storage market - this year has been no different. In this article, we will explore storage developments in Canada, the United States and beyond since our post last summer.

Bloomberg NEF (BNEF) has suggested that the global energy storage market will grow to a cumulative 942GW/2,857GWh by 2040 and attract $620 billion in investment over the next 22 years. BNEF predicts that the leading countries will be China, the U.S., India, Japan, Germany, France, Australia, South Korea and the U.K. This view is supported by GTM Research who predict that energy storage deployments will grow thirteen times larger between now and 2024, from a 12 gWh market in 2018 to a 154 gWh market in 2024. They also predict that the growth will be concentrated in the United States and China, followed by Japan, Australia and South Korea. As explained in a recent McKinsey article, the residential energy storage market is also seeing a rapid growth and outpacing expectations. They state that over the past few years, annual installations of residential energy storage systems in the U.S. have skyrocketed from 2.25MWh in 2014 to 185MWh in 2018. According to Convergent, a leading storage developer, between 2017 and 2022, the U.S. storage market is projected to grow 9x in power terms and 12x in energy terms.

Canada

While we have seen developments in energy storage installations in Canada in the past year, the regulatory landscape has been relatively quiet.

In December 2018, the Independent Electricity System Operator (IESO) published a report titled "Removing Obstacles for Storage Resources in Ontario." The report explains the work that has been done by the IESO-sponsored Energy Storage Advisory Group (ESAG), and sets out a number of recommendations towards removing the regulatory barriers facing energy storage resources in Ontario. The IESO has indicated that in 2019, the ESAG will focus on creating and implementing a plan to ensure consistent treatment of energy storage facilities. See our earlier post for full details on the report.

In March 2019, the Ontario Energy Board (OEB) launched an initiative to identify ways to support the integration and expansion of distributed energy resources (DERs) in Ontario. The initiative, titled "Responding to Distributed Energy Resources," was launched in March 2019 and aims to encourage service providers to "embrace innovation" and "secure the benefits of sector transformation." As described in our earlier post, this initiative (which is also looking at utility remuneration) aims to develop "a more comprehensive framework that facilitates investment and operation of DERs." The OEB recently issued a letter explaining its "refreshed" approach to stakeholder engagement for the consultation processes on Utility Remuneration and Responding to DERs. Among other things, the OEB's updated approach is intended to "enhance the opportunity for stakeholder perspectives to inform subsequent steps." The first step in that consultation will be a stakeholder conference to be held in September 2019.

In May 2019, Energy Storage Canada (ESC) released their presentation titled "Maximizing Value and Efficiency for Ratepayers through Energy Storage." The roadmap sets out "a...