Recent figures have revealed that there is over 1.2 GW of energy storage capacity (excluding pumped hydro) in operation or development in the United States. Also, this month it was announced that there are Request for Proposals totalling 2 GW of energy storage that will deployed over the next five years, further strengthening the project pipeline in the US.
This increasing capacity is set to make 2014 a momentous year for the energy storage industry, and many experts have pointed to the increasing levels of investment as a clear indicator of the growth potential in this market. This week analysts have projected that investment is poised to grow from $200 million two years ago to $19 billion by 2017.
However, despite these positive forecasts the immature state of the U.S. energy storage market, as well as of many of its constituent technologies, makes it challenging for companies to secure investment from traditional funders to commercialise their technology.
Furthermore, a series of bankruptcies of relatively high-profile names in the industry have done little to inspire confidence in the wider investor community.
A further challenge is that energy storage projects can benefit a number of different stakeholders but it has proved difficult to get all these beneficiaries to assume the upfront costs, making it difficult to make return-on-investment estimations.
However, the announcement of California’s energy storage mandate, AB 2514, that targets 1.325GW by 2020 will help manufacturers and developers overcome these investment roadblocks. The states three investor-owned utilities are required to add energy storage to their grids, making California a major proving ground for storage.
This mandate will undoubtedly give more established storage technologies the chance to be tried and tested in a utility grid setting, allowing companies to demonstrate the reliability and bankability of their technologies. In turn this will provide companies with the track record they need to secure investment from traditional funders to continue their commercialization process and grow their project pipeline for years to come.
In order to examine the future impact of California’s energy storage mandate, as well as how financiers assess their investment options in different technologies, leading utilities and investors have confirmed to participate at Energy Storage USA 2014 (25-26 June, San Diego).
At the event, Citigroup, the Export-Import Bank of the United States and Rockland Capital will assess the drivers for investment and outline the key criteria that lenders look for when backing the development and commercialization of storage technologies.
In addition to this, Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric will discuss their future procurement plans and how they are defining the economic value of energy storage. Furthermore, they will outline the drivers for utility ownership and the perceived risks when acquiring storage in a third party procurement mechanism.
The event is set to take place on 25-26 June in San Diego, with over 250 delegates in attendance. For more details about the summit go to the website: http://www.energystorageupdate.com/usa/
Or contact Jack Ahearne by email at jack@energystorageupdate.com
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