The United States is in a battery boom and will add about as much capacity to the grid in 2022 as it has in all previous years combined.
This surge is reshaping America’s regional power grid. In California, for example, analysts attribute a series of new battery installations to avoiding power outages late last summer when a scorching heat wave surged electricity demand.
Executive Director Ric O’Connell said: GridLab. “This makes us more and more dependent on wind and solar.”
The US has installed 4 gigawatts of battery capacity in 2022, according to figures from the US Energy Information Administration. California and Texas accounted for 90% of US battery installations, with 2.4 GW and 1.3 GW in operation by 2022, respectively.
Battery explosions in America’s two most populous states are largely due to the increasing intensity of solar power. California and Texas are his first and second largest solar power markets respectively in the United States.
The high penetration rate of solar power in each state contributes to large fluctuations in electricity prices, with prices falling during the day when solar power is being skyrocket in the evening when .
The battery is well placed to profit from the evening price spike. Lithium-ion batteries, which make up the majority of utility-scale energy storage facilities, use surplus solar power to quickly recharge during the day, and in the evening he can power at four-hour intervals.
Dan Finn-Foley, an analyst who tracks the storage industry for PA Consulting, said: “Storage can capture a lot of value there.”
He said the extent of the energy storage boom in the United States is impressive. In 2018, the United States installed a total of 189 megawatts of storage capacity. Last year, the largest single-installation project was 350 MW, according to the industry group American Clean Power Association.
The growth isn’t surprising, Finn-Foley said. Lithium-ion batteries used for the grid are the same batteries used in electric vehicles. As the EV market grew, the supply chain expanded and battery costs for grid-scale storage fell. Batteries used in the power sector represent a small portion of the total lithium-ion battery market.
“It’s fair to say that without the EV industry, the fixed-grid storage industry wouldn’t exist today,” says Finn-Foley.
The 2022 flood of battery installations in the power sector is particularly notable given the supply chain constraints the industry faced earlier this year. The developer has largely been able to resolve these issues after experiencing similar crises in his chain of supply in 2018 and 2020, Finn-Foley said.
The impact of the new facility was especially noticeable during last year’s Labor Day heat wave in California. O’Connell said the state could have requested about 3 GW of battery capacity during the evening hours when demand was nearing its peak and solar production was down.
“If we hadn’t had that 3 GW of storage online, we would have been in serious trouble,” he said. Even with its battery capacity, surges in demand have led state power grid operators to ask residents to cut back on electricity usage to prevent blackouts.
Analysts said the battery boom is likely to continue.
A comprehensive climate law, the Inflation Reduction Act, enacted last year, made it easier for battery developers to claim investment tax credits. Previously, a battery installer had to be connected to a solar project to qualify. The Controlled Inflation Act removed that requirement, paving the way for all grid-connected batteries to qualify.
Between now and 2026, developers plan to install 22 GW of battery capacity, according to EIA figures. Of that, 16 GW are planned for Texas and California.
Reprinted from E&E News with permission of POLITICO, LLC. Copyright 2023. E&E News provides essential news for energy and environmental professionals.
