Batteries eclipse pumped hydro on US grid; planned pipeline tops 131 GW by 2030

Big battery power plants on the US grid have eclipsed the total installed capacity of pumped hydroelectric resources, marking a major milestone for electrochemical energy storage.

Cumulative operating battery power storage capacity climbed to over 23.5 GW in August, compared with less than 23.3 GW of existing pumped storage, according to S&P Global Market Intelligence data. The US battery storage fleet has grown rapidly since 2020, fueled by one- to four-hour lithium-ion systems largely in California, Texas and the greater Southwest. Most pumped storage resources came online before the 1990s.

"Battery storage surpassing pumped storage in operating capacity in the US was only a matter of time," said Adam Wilson, a senior analyst for energy research at S&P Global Commodity Insights. "Development interest for pumped storage has plummeted while battery storage is skyrocketing."

Over 3.3 GW of nonhydro power storage entered operation in the second quarter, more than doubling from a year ago and rising about 162% from the first three months of 2024, according to Market Intelligence data.

Through late August, developers this year had added nearly 5.4 GW of large-scale battery power capacity. Another 13.2 GW is under construction or undergoing the commissioning process, of which 7.4 GW is scheduled to come online in 2024, pointing to continued strong growth this year. Last year, developers added over 7.9 GW of capacity.

Q2 surge

Among the largest systems added in the second quarter was Ørsted A/S's 300-MW/1,200-MWh Eleven Mile Energy Storage Project, which is colocated with the 300-MW Eleven Mile Solar Center in Pinal County, Ariz. The hybrid solar-storage plant will power a Meta Platforms Inc. datacenter in Mesa, Ariz.

Other large battery assets that entered commercial operations in the quarter include Plus Power's 250-MW/1,000-MWh Sierra Estrella Battery Storage Project and 90-MW/360-MWh Superstition Battery Storage Project. The two stand-alone storage projects are located in Maricopa County, Ariz., and are under contract with Salt River Project.

Plus Power in the second quarter also completed its 200-MW/400-MWh Anemoi Battery Storage Plant in Hidalgo County, Texas, a fully merchant plant operating in the state's wholesale market.

Calpine Corp. in June completed a 230-MW phase of its planned 680-MW/2,720-MWh Nova Power Bank at the site of a demolished natural gas plant in Riverside County, Calif., which is underpinned by multiple offtake agreements. Also during the second quarter, NextEra Energy Inc. reached full operation of its 230-MW Sunlight Storage II Battery Project, a four-hour system colocated with the over 300-MW Desert Sunlight solar project in Riverside County, Calif.

More than a dozen projects or project phases with power storage capacities of 100 MW or greater came online in the quarter.

'Too many advantages'

The nonhydro storage development pipeline has more than 131 GW planned to come online through 2030, according to Market Intelligence data. Although developer timelines typically lag behind their ambitions, the volume of planned capacity in coming years reflects strong momentum for battery storage, especially compared with pumped hydro.

"Battery storage simply has too many advantages," said Wilson. "Cost and related incentives from the Inflation Reduction Act, construction timelines, technological advancement potential, pairing with other clean energy resources, flexibility, geographic availability — battery storage generally outperforms pumped storage in all of these metrics and likely more."

California continues to lead the US in terms of installed operating large-scale battery capacity, with roughly 10.5 GW, according to Market Intelligence data compiled Aug. 27, followed by Texas with about 6 GW, Arizona with over 1.8 GW and Nevada with more than 1.3 GW.

Texas leads in resources under development, with more than 51.4 GW of battery power capacity planned, followed by California with 36 GW, Nevada with 9.8 GW and Arizona with 7.8 GW.

The planned projects tracked by Market Intelligence are part of a larger, and more speculative, pipeline of potential energy projects of various types under study in grid operator interconnection queues, which is dominated by hybrid and stand-alone battery storage projects, according to a recent Commodity Insights analysis.