New capacity marks an increase of 252% over the first quarter of last year, says Wood Mackenzie [Image: Engie]
The US brought online 910 megawatt hours (MWh) of new energy storage capacity in the first quarter of 2021, according to data from Wood Mackenzie and the Energy Storage Association (ESA).
The new additions mark an increase of 252% over the first quarter of last year.
After a record-setting quarter for deployments in the fourth quarter of 2020, the pace of storage deployments slowed in the first quarter 2021, Wood Mackenzie highlighted.
The analyst said that despite this “somewhat of an annual phenomenon for the industry”, the US storage market still notched its third highest MW total for one quarter.
Looking ahead to the rest of 2021, deployments are expected to “accelerate dramatically”.
Wood Mackenzie forecasts that nearly 12,000 MWh of new storage will be added in 2021, which is three times the amount of new storage added in 2020.
One of the most significant storage market developments in the first quarter was the introduction of a stand-alone storage investment tax credit (ITC) in Congress, stated Wood Mackenzie.
If passed this year, a stand-alone storage ITC would result in a 20-25% upgrade to Wood Mackenzie’s five-year market outlook in megawatt terms.
Chloe Holden, Wood Mackenzie energy storage analyst, said: “An extra 20 to 25% growth for the US market over the next five years would supercharge an already fast-growing energy storage market.
“The front-of-the-meter (FTM) segment would see the largest incremental growth, with an extra 6GW of capacity expected through 2025, which is 25% of our base case market forecast.
Without the stand-alone storage ITC, we forecast that the FTM segment will add 3674MW in 2021 and 6915MW in 2026.”
The report also highlighted that the FTM interconnection queue now sits at over 200GW.
Though most projects in the queue will not come online, the queue is the largest it has ever been and is a “testament to the rapid growth” of the US FTM storage market.
There is a clear trend of increased geographic diversity of interest in FTM projects, with a surge of interconnection queue requests sitting outside of incentivised markets, Wood Mackenzie said.