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Highlights

Storage expected to reach 42.6 GW by 2030

Solar PV plus storage described as 'exploding'

Houston — US battery storage capacity is expected to be on a steep growth trajectory in the coming years, potentially reaching more than 40 GW by 2030 because of its key role in decarbonizing the power sector, and in particular managing the growth of renewable generation and its impact on power prices.

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Many executives and analysts believe storage will be a necessary component in achieving state and utility 2050 net-zero carbon targets.

"Energy storage is ballooning right now," Paul Browning, president and CEO of Mitsubishi Power, said during a Nov. 19 webcast.

About 1,338 MW/2,276 MWh of battery storage was grid-connected in 10 regions of the US at the end of third-quarter 2020, up 41% compared with the 949 MW/1,823 MWh installed by the end of Q3 2019, according to quarterly data filed with the Federal Energy Regulatory Commission.

Battery storage, says Kieran Kemmerer, power sector analyst at S&P Global Platts Analytics, "is essential in allowing for increased uptake of renewable generation across North America."

"Aggressive clean energy goals in states such as California and New York can only be achieved with a form of storage resource that allows the energy produced from solar and wind to serve demand in hours when it is needed most," Kemmerer said.

During certain hours of the day in California, power generation can become oversupplied in part because of abundant solar power, resulting in the need for generation curtailments. More storage capacity, primarily lithium-ion batteries, would enable utilities to shift that supply to the hours when it is needed most, reducing oversupplied conditions and curtailments.

This valuable capability at a time of rapid renewables growth nationwide has ensured a bright future for battery storage in the US. Platts Analytics is forecasting storage to rise to 25.6 GW by 2025 and to roughly 42.6 GW by 2030. An even-greater acceleration of storage capacity additions is expected between 2030 and 2050.

The growth in storage capacity will be "further facilitated by expected cost declines in excess of 30% over the next decade," Kemmerer said. "We anticipate additional policy, including [FERC] Orders 2222 and 841, will effectively remove barriers to entry in both wholesale and retail markets for battery storage."

State policies grow in number

In total, 27 states currently have some battery storage policy on the books. Nine of those states have a moderate form of battery storage policy, and six states have aggressive policies with mandates for significant capacity additions over the next decade or more.

Those include Arizona, with a goal of 3 GW by 2030; California, with a goal of 1.8 GW; Nevada, with a goal of 1 GW by 2030; New Jersey, with a goal of 2 GW by 2030; New York, with 3 GW by 2030; and Virginia, with 3.1 GW by 2035.

Regulators in Maryland Nov. 6 approved Exelon utilities' plan to move ahead with six battery energy storage pilot projects. The state's Public Service Commission approved two pilot proposals each from Baltimore Gas and Electric, Delmarva Power & Light, and Potomac Electric Power Co.

In Pennsylvania, the Public Utility Commission has indicated it will be gathering information to guide it on future storage regulatory policies.

In Virginia, the state's legislature mandated 100% carbon-free electricity by 2045 in its Virginia Clean Economy Act that went into effect in early July. Dominion Energy's Virginia Electric and Power subsidiary and American Electric Power are required to "construct or acquire" 2.7 GW and 400 MW of energy storage capacity, respectively, by 2035.

Solar plus storage

California, whose renewable portfolio standard has effectively been leading the country's march toward net-zero emissions by mid-century, has been aiming at replacing gas-fired power plants with solar, wind, energy storage, and demand response.

As of Q3 2020, California Independent System Operator had 492 MW of installed storage in its footprint, including the nation's largest plant, LS Power's 250-MW Gateway project located in San Diego County. The state is expecting storage to reach 1.5 GW in 2021.

Vistra Energy earlier in 2020 entered into 10-year resource adequacy agreements with Pacific Gas and Electric for a new 100 MW/400 MWh facility to complement a 300 MW/1,200 MWh battery storage facility already under construction.

Cal-ISO has recently approved new requirements for generation-plus-storage projects to participate in its wholesale power markets to help maintain grid reliability.

Battery storage has become increasingly tied with solar projects, prompting a NextEra Energy Resources executive to say that solar-plus-storage hybrids have "exploded."

Mark Ahlstrom, vice president of renewable energy policy for the NextEra Energy subsidiary, said during a Nov. 17 webcast that he doesn't think "we will ever build another standalone solar facility."

According to a Nov. 23 BloombergNEF report, 19 GW of hybrid solar-plus-storage projects are "in the pipeline in the US and expected to come online by 2023." The report said that an additional 80 GW of projects are in interconnection queues.

In Nevada, NV Energy has signed power purchase agreements with seven hybrid projects with 1,716 MW of combined generating capacity and 853 MW of combined battery storage.

The 600-MW Gemini project, which will have 380 MW of storage, has a PPA price of $25/MWh. Another large Nevada hybrid is EDF Group's Chuckwalla facility, due online in 2023. That 200-MW solar facility is to be built with 180 MW of battery storage attached and has a $35/MWh PPA signed with NV Energy.

In Texas, total utility-scale solar capacity is expected to reach close to 5 GW by the end of 2020. The Electric Reliability Council of Texas says that installed battery storage totaled 185 MW in 2020, up from 104 MW in 2019. ERCOT says that as of Oct. 31, 2020, there were 15 battery projects with interconnection agreements signed and financial security posted that have commercial operation dates of 2021. Those projects have a combined potential storage capacity of just over 1.3 GW.

Midcontinent Independent System Operator has 65 MW of battery storage in its sprawling service territory. A recent MISO planning document suggested that 2 GW of storage could be installed by 2025.

MISO members' filed plans indicate coal will continue to decline to less than 10% of the generation mix by 2040, while wind is projected to grow to over 20% and solar to 10%.