U.S. energy storage market saw record growth in the third quarter with 3,806 megawatts (MW) worth installations and 9,931 megawatt-hours (MWh) deployed, Wood Mackenzie said in a report on Thursday.

This was a 80% and 58% increase, respectively, from a year earlier, the report, which was developed in partnership with the American Clean Power Association, showed.

WHY ITS IMPORTANT

U.S. grid connection queues have been continuing to rise as network operators grapple with a huge number of clean power applications and dwindling transmission capacity.

The Energy Department said its National Transmission Planning Study found the U.S. will need to double or triple transmission capacity in the three decades to 2050 in order to meet demand growth and reliability needs.

Grid-scale installations are projected to more than double by 2028 to reach a total volume of 63.7 gigawatts (GW), and residential installing could reach 10 GW of storage in the same time period, as per the report.

CONTEXT

Grid-scale energy storage deployments were led by Texas and California - Texas added nearly 1.7 GW and California added about 6 GWh.

The report by Wood Mackenzie and ACP also showed the residential market set an all-time high last quarter, with 346 MW of storage added - a 63% increase compared with the last quarter.

KEY QUOTES

"Overall, storage installations will grow 30% in 2024, signaling the industry's strongest year yet. However, it will be difficult to keep this pace. Between 2025 and 2028 we are projecting an annual average growth rate of 10%, as early-stage development constraints continue," said Nina Rangel, senior research analyst at Wood Mackenzie.

"...any major shifts in tax incentives or increased tariffs could outweigh benefits and have an impact on new project development," said Allison Weis, global head of storage for Wood Mackenzie.