US added more energy storage in 2020 than the prior 7 years combined – report

Powered by a surge in connections of large-scale battery storage projects in California in the final three months of 2020, the U.S. added a total of 1,464 MW/3,487 MWh of new energy storage resources during the year, research firm Wood Mackenzie and the U.S. Energy Storage Association said March 3 in a report highlighting the industry's expansion.

The record-setting totals came even as storage developers struggled to secure all the lithium-ion battery cells they need to fulfill demand and despite project construction delays related to the coronavirus pandemic. On an installed capacity basis, developers deployed 179% more MW in 2020 over 2019.

"2020 is the first year that advanced energy storage deployments surpassed gigawatt scale — a tremendous milestone on the path to our aspiration of 100 GW by 2030," Jason Burwen, interim CEO of the U.S. Energy Storage Association, said in a statement. "With continuing storage cost declines and growing policy support and regulatory reform in states and the federal government, energy storage is on an accelerating trajectory to enable a resilient, decarbonized, and affordable electric grid for all."

California dominated the energy storage market in 2020, accounting for more than 80% of the additions, with 2,372 MWh of front-of-the-meter energy storage to go along with 309 MWh of residential storage and 139 MWh at businesses, the report said. Texas, Hawaii, Massachusetts and New Jersey also saw significant volumes.

In the fourth quarter alone, developers brought online 2,156 MWh, according to the report.

The nearly 3,500 MWh of advanced, non-hydropower energy storage added in 2020 was more than the industry mustered in the prior seven years combined, noted Dan Finn-Foley, Wood Mackenzie's head of energy storage. "This is the hallmark of a market beginning to accelerate exponentially, and momentum will only increase over the coming years," Finn-Foley said.

Bigger things to come

Finn-Foley pointed to Vistra Corp.'s Moss Landing Energy Storage Facility, energized next to a natural gas-fired power plant on California's Monterey Bay in December, as the world's current largest battery project at 300 MW/1,200 MWh. Under contract with Pacific Gas and Electric Co., the system "likely won't hold the title for long," the head of energy storage added.

Vistra is in the process of adding another 100 MW/400 MWh to the project and has a permit to expand to 1,500 MW/6,000 MWh. But numerous developers have large-scale "battery peaker" projects under construction and in the advanced stages of development, most notably NextEra Energy Resources LLC, the competitive generation arm of NextEra Energy Inc.

Installed capacity "will spike dramatically" this year, according to the report, which forecast more than 4,000 MW of additions in 2021, with front-of-the-meter projects accounting for 84% of the market. Wood Mackenzie expects annual installed energy storage additions to expand fivefold by 2025, to 7,830 MW.