In the landscape of global energy transition, commercial and industrial (C&I) energy storage stands as a pivotal pillar for integrating distributed resources into power grids. Let’s delve into the current status and driving factors behind C&I energy storage in the United States and Europe.
**United States Scenario:**
The demand for energy storage in the United States, especially in the commercial and industrial sectors, is witnessing significant growth. As of 2022, the proportions of utility-scale, C&I, and residential energy storage installations were 84%, 4%, and 12% respectively, with a year-on-year growth of 35%, 43%, and 47%. Despite the lower commercial electricity prices compared to residential rates, C&I energy storage faces economic challenges in the post-meter market, lagging behind both residential and utility-scale storage in terms of demand.
Wood Mackenzie data forecasts a doubling of utility-scale and C&I energy storage installations and a 43% growth in residential installations by 2023. This surge indicates that C&I energy storage growth in the United States is poised to surpass residential growth.
**Driving Forces in the United States:**
Economic viability of C&I energy storage is becoming evident, driven by various profit models:
1. *Policy Dynamics:* The introduction of new regulations, such as the revised Investment Tax Credit (ITC) guidelines, is expected to expedite the deployment of domestically manufactured C&I energy storage projects.
2. *Revenue Streams:* C&I energy storage in the U.S. primarily relies on distributed solar PV paired with storage, benefiting from peak-demand pricing differentials and revenue streams like self-consumption and grid export of surplus energy, especially with up to 70% ITC subsidies.
3. *Market Liberalization:* The highly market-oriented nature of the U.S. electricity sector offers diverse profit avenues for C&I energy storage, predominantly through distributed solar PV installations.
**Forecasted Installations in the United States:**
Wood Mackenzie projects that by 2023, utility-scale and C&I energy storage installations in the United States will more than double, while residential installations will increase by approximately 43%.
**European Scenario:**
Europe's energy storage landscape predominantly revolves around residential and utility-scale installations. In 2022, residential, utility-scale, and C&I energy storage installations accounted for 48%, 46%, and 6% of new additions, respectively. According to EASE/Delta-EE data, new additions in residential, utility-scale, and C&I energy storage installations in 2022 were 3.98GWh, 3.86GWh, and 0.5GWh respectively.
**Driving Forces in Europe:**
1. *Critical Need for Distributed Resource Integration:* Europe's rapid adoption of distributed solar PV, although commendable, poses challenges due to the intermittent and fluctuating nature of solar output. Energy storage becomes indispensable for ensuring grid stability and reliability, especially as electric vehicle charging infrastructure exacerbates distribution grid loads.
2. *Market Liberalization:* High degrees of electricity market liberalization in Europe facilitate rational returns on investment for C&I users adopting energy storage solutions.
3. *Policy Support:* Substantial subsidies at the policy level enhance the willingness of commercial and industrial users to invest in energy storage solutions.
In conclusion, commercial and industrial energy storage serves as a linchpin for the integration of distributed resources into power grids both in the United States and Europe. With favorable policies, evolving economics, and market dynamics, the future of C&I energy storage appears promising, playing a pivotal role in advancing energy transition objectives globally.
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Post time: May-06-2024
