Energy Storage

What’s Trending in 2017?

About this time every year, industry observers attempt to forecast the events of the future.

By Russell Ray, Chief Editor

About this time every year, industry observers attempt to forecast the events of the future.

I compare this annual exercise to playing golf on a sheet of ice. No matter how straight your line is, you will miss the target most of the time.

Nonetheless, it is a worthy endeavor meant to compel discussion and debate over the direction of the most important industry in the world.

So, how will things unfold in the power sector in 2017? Specifically, which markets will take a major leap forward or backward this year?

At the risk of landing in the bunker, I’ll take a shot – Fore!

Digital Solutions

If you work for a tech company or service provider in power generation, your company has either launched a new digital offering or is in the process of developing one.

Although GE is a clear leader in this sector with its Predix platform, it is not the only player in this growing market. Led by its Sinalytics platform for big data, Siemens launched Digital Services for Energy last year. ABB launched a digital offering for power plants known as ABB Ability, a new centralized software platform leveraging ABB’s Industrial Internet of Thing (IoT) capabilities. Also, Schneider Electric unveiled an IoT solutions platform known as EcoStruxure, allowing companies to build a real-time digital model of individual assets and overall portfolio.

So how big is this market? GE said an estimated $90 billion is expected to be invested in the digitalization of energy by 2020.

Power producers can’t ignore the value of digital technologies and services. Opportunity is knocking for power generators in desperate pursuit of increased efficiency and reliability amid flat or declining demand for electricity.

Energy Storage

The power sector is rapidly evolving, and energy storage is at the center of this evolution. Storage costs have plunged 60 percent in two years.

According to market research firm IHS, the energy storage market is set to “explode” to an annual installation size of 6 gigawatts (GW) in 2017 and over 40 GW by 2022 – from an initial base of only 0.34 GW installed in 2012 and 2013. What’s more, a report from IMS Research shows the market for storing power from solar panels will rise to $19 billion this year. That’s up from $200 million in 2012.

Storing electricity on a large scale has long been pursued by electric utilities in hopes of using the power to cover periods of peak demand. The technology to store large amounts of power appears to be commercially viable. Some grid-scale systems are viable now, while others are on the verge of viability. The next step: Getting projects funded and online.

The industry’s interest in the energy storage market was plainly evident last year at POWER-GEN International 2016. Attendance for all of the sessions on energy storage was standing room only. In 2017, POWER-GEN will be doubling the number of sessions on energy storage.

According to Navigant Research, energy storage could grow to become a $21.5 billion market by 2024.

Large-Scale Solar

Utility-scale solar capacity is expected to grow to 27,000 MW in 2017, up from 10,000 MW in 2014. That’s an annual growth rate of 39 percent, which makes solar the fastest-growing renewable resource for U.S. electric utilities. Also, the Department of Energy is projecting utility-scale solar capacity will rise by 8,500 MW in 2017 and 2018 combined.

But these figures project a false reality. In fact, the market for large-scale solar in the U.S. will weaken in 2017, driven by the expiration of the solar investment tax credit (ITC) and an over-procurement of capacity. Though the ITC was extended, investor-owned utilities have secured enough solar capacity to meet their commitments, thanks to record low prices for power purchase agreements.

“In 2017, while the residential and non-residential PV markets are both expected to grow year over-year, the U.S. solar market is expected to drop just over 4 percent on an annual basis,” according to a report by GTM Research.

Natural Gas

Not surprisingly, a significant amount of generation fueled with natural gas will be added in the U.S. in 2017 and 2018, according to the Energy Information Administration (EIA). U.S. power producers are expected to build 11,200 MW of gas-fired generation this year. In 2018, they will add a whopping 25,400 MW of gas-fired capacity.

“If these plants come online as planned, annual net additions in natural gas capacity would be at their highest levels since 2005,” EIA said.

As a result, the industry’s major gas turbine manufacturers have launched some innovative gas turbine designs that are faster, more efficient, more flexible, and more durable than the designs of a decade ago. I guarantee 2017 will mark further improvements in fuel efficiency, which will benefit power producers worldwide.

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