Environmentalists urge California to boost batteries, cut gas for grid reliability

California should reduce its reliance on natural gas-fired power plants with a suite of regulatory reforms to expand energy storage, according to a new report highlighting the central role of batteries in California ISO's improved grid reliability in recent years.

The state's rapidly rising battery storage assets are "significantly more cost effective and offer great potential to improve energy affordability for ratepayers through a transition to zero-carbon energy," the Center for Energy Efficiency and Renewable Technologies and Regenerate California said in an analysis released June 17.

Regenerate California is a collaboration of the Sierra Club and the California Environmental Justice Alliance.

"However, design of the state's reliability standards and programs, as well as interconnection process barriers, needs to be addressed to accelerate the benefits of utilizing new [battery storage systems] rather than aging gas-fired power plants," the report said.

California's installed battery power storage capacity expanded over thirtyfold between 2018 and the first quarter of 2025 to more than 15,700 MW, according to California Energy Commission data. That includes 13,248 MW at 214 utility-scale stand-alone and storage-plus-renewable energy projects — largely equipped with four-hour lithium-ion systems.

In addition, California households have 1,829 MW of battery capacity installed across 249,340 projects and businesses have 686 MW at 3,335 commercial sites, the state data showed.

Surge 'is just phenomenal'

"In the last few years, we've seen a huge turnaround with battery storage," CEERT Policy Director Maia Leroy, one of the report's co-authors, said in an interview. "The amount that has been built out and connected to the grid is just phenomenal."

Developers are vying to add over 34 GW of battery capacity in California by 2030, according to S&P Global Market Intelligence data. Of that, over 6,200 MW is scheduled to enter operation in 2025, which would mark the fifth consecutive year that batteries have been the largest type of new resource connected to the CAISO grid, a recent Platts analysis found. Platts is part of S&P Global Commodity Insights.

But gas remains California's single largest source of power, with more than 200 projects in operation, according to the CEERT and Regenerate California report. Over half are in disadvantaged communities.

"These are working-class communities of color; it's a result of decades of systemic racism and inequitable energy and land use planning," said Heena Singh, energy justice manager at the California Environmental Justice Alliance.

Some of California's new battery facilities have been built at the sites of former and existing gas plants or have replaced previously planned natural gas projects.

"We're seeing that batteries are playing a huge role in the decommissioning and shut down of these gas plants," Singh said.

At the same time, older gas plants in recent years have shown their wear and tear, Singh added, with some facilities offline during peak summer demand periods.

"What we've seen in the past few years is how gas plants are very consistently touted as ... the key to reliability in California, but it's really not the case," Singh said.

Battery storage systems also have failed at times. A 300-MW/1,200-MWh phase of the Moss Landing Battery Storage Facility in Monterey County, for instance, was partially destroyed in a major fire in January and experienced another flare-up in February.

Overall, California's battery fleet "has performed very well" while failures remain rare and have not affected reliability, Danielle Mills, CAISO's principal for infrastructure policy development, told Platts in April.

'Batteries are a clear pathway'

The report calls on California's governor and energy regulators to cease further support of gas plants as part of the state's Strategic Reliability Reserve, to facilitate the retirement of aging facilities that account for most of the reserve's contingency resources, and to pivot the reserve to focus on battery storage.

The authors recommended shutting down GenOn Holdings' 1,491-MW Ormond Beach Generating Station in Ventura County, AES' 1,152-MW Alamitos plant in Los Angeles County and AES' 226-MW Huntington Beach facility in Orange County.

Those facilities are approved to operate until the end of 2026 after California's State Water Resources Control Board in 2023 extended deadlines to comply with a policy to phase out facilities reliant on aquatic cooling systems harmful to marine life. The agency also postponed compliance for the Los Angeles Department of Water and Power's 261-MW Scattergood Generating Station to the end of 2029.

All four plants were scheduled to retire in 2020 but were extended in the wake of rotating outages that summer. With the emergence of the state's battery power plants, those plants are no longer needed, according to the report.

"We're not going to stand for another extension," Singh said. "The communities that have been impacted the most by these gas plants want to see them gone, and batteries are a clear pathway where this can happen."

The report also urged the California Public Utilities Commission to further refine its resource adequacy program. The state has new resource adequacy rules that require utilities and other load-serving entities to show they have sufficient capacity cushions to meet demand during all 24 hours of CAISO's most stressful days.

Regulators must ensure these new "slice-of-day" rules recognize the capabilities of battery storage paired with renewables, especially in local areas reliant on gas plants, according to the report.

"Previously, gas was the go-to for resource adequacy," CEERT's Leroy said. "Now we have batteries."

The new framework, which California tested in 2024 and is fully implementing in 2025, "is off to a great start," the policy expert said. But regulators need to ensure the approach accounts for the nuances of batteries, including incentives for offering more than four hours of energy storage, according to the report.

"Four hours is great, [but] it doesn't meet the full demand peak," Leroy said.

In addition, the groups called on the governor's office, the PUC and CAISO to collaborate on a strategy for reducing dependence on gas plants and increasing battery storage deployments in areas with transmission constraints.