Large-scale battery storage capacity in the USA surged in 2020 to reach 1,650MW, according to the Energy Information Administration (EIA).
In a report, published on 16 August, EIA said at the end of 2019, 163 large-scale (+1MW) battery energy storage systems were operating in the USA, a 28% increase from 2018. The maximum energy capacity that could be stored at these sites was 1,688MWh, and the maximum power that could be provided to the grid from these sites at any given moment (power capacity) was 1,022MW. The paper also noted that more than 60% of this capacity was located in areas covered by regional grid operators PJM Interconnection (PJM) and California Independent System Operator (CAISO). At the end of 2019, PJM Interconnection hosted about 30% of the existing large-scale power capacity.
According to the Battery Storage in the United States: An Update on Market Trends report, normalized energy capacity costs (in dollars per kilowatt-hour) have decreased over time—falling by 72% between 2015 and 2019 for an average five-year annual decrease of 27%—though power capacity costs have remained relatively stable.
Looking ahead, the EIA expects battery installations to rise significantly, driven by the orders from the Federal Energy Regulatory Commission (FERC). New installments are also being encouraged by the investment tax credit and state-level policy actions. EIA expects an additional 10,000MW of large-scale battery storage to be installed between 2021 and 2023—10 times the total amount of maximum generation capacity by all systems in 2019. Over the coming decade it is anticipated that California will lead future installations. California utilities account for 40% of battery storage power capacity planned for installation between 2021 and 2023. These planned additions put the state in line to meet its energy storage requirement of 1,325MW of energy storage by 2024.
Another trend highlighted by the report is that battery storage projects are increasingly being co-located with generation, especially wind and solar. While as of December 2020, most large-scale battery storage systems were standalone facilities, data for proposed projects shows an additional 7,689MW with co-located battery storage systems are planned to come online between 2021 and 2023, compared with 3,115MW of standalone projects.
Wayne Muncaster, VP for North America at GridBeyond, commented:
“Energy storage plays a pivotal role in enabling power grids to function with more flexibility and resilience. This is role that’s only going to become more crucial as levels of intermittent generation increase on the networks. But battery storage also brings direct benefits for the asset owners. Unlike other energy sources, battery storage can supply and store energy, creating a combination of cost and revenue streams. Different factors affect battery storage investment decisions in different regions. These factors depend on state policies and both existing and future market characteristics and needs.
“While this can make building the investment case and optimizing your battery asset rather complex, the results on businesses’ bottom lines can be significant.”