As energy storage matures, leading system integrators embrace a flexible project approach
The best storage integrators do it all — from turnkey projects to utility-owned facilities — according to a new report from Navigant.
It is becoming widely recognized that an energy storage project requires more than one revenue stream to be financially viable. The corollary is that an energy storage project requires an integrator to be successful.
According to a new report out from Navigant Research, the role of the system integrator is becoming increasingly important as the energy storage industry continues to develop.
“The integrator is responsible that the energy storage system is properly designed so that it is able to earn maximum revenue,” said Alex Eller, a research analyst in Navigant’s Energy Technologies program and one of the authors of the report.
Navigant’s Leaderboard Report on utility scale energy storage systems integrators compares and ranks the strategy and execution of 14 energy storage systems integrators.
This year’s report shows a greater diversity of players than last year’s, says Eller. That diversity is “a big indication” that the sector is maturing, he said.
The report includes companies with backgrounds in renewable project development, utility ownership, electrical grid equipment and services, battery manufacturing, civil and electrical engineering services, and innovative energy management systems.
The companies that are emerging as leaders in utility-scale energy storage are leveraging their backgrounds to provide a variety of solutions that range from turnkey project development and utility ownership to build-own-operate arrangements to merchant projects that are owned by the developer, the report says.
At the top of Navigant’s leaderboard are AES Energy Storage and RES, both of which have backgrounds and track records in project development.
Project development companies have experience in pulling together the diverse elements of a project, said Eller.
"Utilities would prefer to work with one company, particularly a company they know," he added.
The turnkey model also allows for a more open approach to meeting the needs of various customers and is expected to allow a company’s business to scale rapidly, according to the report.
AES is currently using that model to construct two large lithium ion battery facilities with San Diego Gas & Electric. Built on an expedited timeframe, SDG&E will own the storage facilities under contract with AES that ensures battery performance for 10 years.
But while the turnkey option is appealing, companies that are most successful are those that are most flexible in what they offer to the utility customer or the market, Eller said.
In short, the leading companies are able to integrate a storage system by providing the technical functions, system design, and follow-on services that can transform hardware and software into an intelligent storage-based solution that delivers maximum return on investment.
“Having flexible offerings, including full development to match what customers need is key,” Eller said.
Below the level of “leaders” Navigant ranks “contenders” and “challengers.” At the top of the ranking in the contender category are S&C Electric, Siemens, NEC Energy Solutions, Greensmith, LG CNS, Invenergy, GE Energy Storage and ABB.
That list illustrates another finding of the report; there are a growing number of large corporations in the energy storage system integration space that are hoping to capitalize on the growth of energy storage. “Big name, reputable companies are able to approach the market from different angles,” Eller said.
Companies such as Advanced Microgrid Solutions, Stem and Tesla were not included in the Leaderborad report because they are more focused on the behind-the-meter market.
Navigant is preparing a separate leaderboard report on that market segment.
The Navigant report focuses on battery storage because it leads the energy storage market. According to Navigant’s Energy Storage for the Grid and Ancillary Services report, battery energy storage systems are expected to account for 75.3% of revenue from 2016 to 2025 in the global utility-scale energy storage market.
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