Battery storage is quickly moving from the margins to near the center of the U.S. energy system.

In 2021, the market added 3,508 megawatts of battery storage capacity, an amount more than double from the prior year, according to a report issued last week by the research firm Wood Mackenzie and the American Clean Power Association, a trade group. The total includes grid-scale storage and smaller storage systems at homes and businesses.

“We are seeing that storage has evolved to be an essential part of the energy transition and something that utilities are leaning on in their resource planning,” said Chloe Holden, a Wood Mackenzie analyst and co-author of the report, in an interview.

Storage is essential because it allows grid operators to store wind and solar power at times when those resources are plentiful, and then discharge when needed.

The rapid growth in battery storage has gone on for years, rising from 257 megawatts in 2016, which seemed huge at the time, to last year’s total—an increase of more than 1,200 percent.

But this isn’t the same story repeated with ever-larger numbers. Despite continuing growth, developers of grid-scale battery projects struggled in 2021 to deal with rising costs of raw materials like lithium, and delays in international shipping. If not for those challenges, this year of record results would have been much bigger, the report said.

In addition to the growth in capacity, which refers to how much power a system is capable of discharging at any one moment, new projects are also able to run for longer on a single charge. On average, the new projects in 2021 could run at full capacity for about three hours before needing to recharge, which is an increase from about 2.5 hours for projects that went online in 2020.

Projects are getting larger, and three of them are in a category of their own in terms of size:

• The Blythe and McCoy storage projects, developed by NextEra Energy, went online in several phases last year and are located next to each other near Blythe, California, near the Arizona border. If counted together, they have 523 megawatts of capacity in systems that can run for four hours on a charge.
• Manatee Energy Storage Center, developed by Florida Power & Light, a NextEra subsidiary, went online late last year near Bradenton, Florida. It has 409 megawatts of capacity and can run for 2.2 hours on a charge.
• Moss Landing Energy Storage, developed by Vistra Corp., went online in two phases last year near Monterey Bay in California, with a 400 megawatts of capacity in a system that can run for four hours on a charge.

Each of those could make claims to be the largest battery storage projects in the world, depending on how you want to define “largest.” Manatee is the largest single project in terms of capacity, but Moss Landing is nearly as large in capacity and can run for much longer on a charge. The Blythe/McCoy projects are the largest if counted together.

The Manatee and Blythe/McCoy projects also are examples of the rising number of systems that are being developed alongside large solar arrays, to help maximize the solar array’s ability to sell electricity into the grid at times when it is most needed.

The Moss Landing project has had several outages due to concerns about fire or other issues. The lithium-ion batteries used in most battery storage systems are highly flammable, so grid-scale projects often have safeguards built in to detect smoke and suppress fires.

In January, Vistra released results of an investigation of a September outage, finding that the release of small amounts of smoke from a defective part of an air handling unit led to the activation of sprinkler systems, which damaged about 7 percent of the plant’s batteries. Any maintenance issues at Moss Landing and the other large plants are significant as companies are still figuring out best to operate the systems.

California continues to be far ahead of other states in developing battery storage, thanks in large part to requirements in state law and from regulators. The company that manages the grid in most of the state, California Independent System Operator, said the growth of storage has already been an important part of keeping the lights on. One example is from July 9, 2021, when wildfires led to an interruption of the flow of electricity from power plants in the Pacific Northwest, and storage systems “played a crucial role” in helping to avoid rolling blackouts, the grid operator said.

Several other states are also adding battery storage at a brisk pace, including Texas, Florida, Massachusetts and Nevada.

The Wood Mackenzie report includes a forecast through 2026, showing substantial growth in 2022 and 2023, to the point that annual projects will get to about 10,000 megawatts in 2023. After that, the annual total would stay at about that level through 2026.

“Despite supply tightness leading to some project delays, the grid-scale market is still on track for exponential growth,” said Jason Burwen, vice president for energy storage at American Clean Power, said in a statement.

But the forecast comes with some major caveats. It doesn’t include the potential effects of new federal or state laws that would encourage or require energy storage. And, it assumes that the current challenges in obtaining materials will continue to some extent through 2024.

Holden explained that the main dynamic in the market is an imbalance between supply and demand, which should ease over time.

“Demand is just really high,” she said. “Supply is constrained.”

Other stories about the energy transition to take note of this week:

How Biden’s Budget Would Change the Energy Sector: The Biden administration has submitted a $5.8 trillion budget proposal to Congress, a plan that includes $3.3 billion for energy programs, $502 million to weatherize the homes of people with low incomes, and $90 million to modernize the electricity grid. The release of the budget proposal is the first step in a long process that will include many changes based on negotiations with Congress, but the level of proposed spending on clean energy programs shows that this is an area of high priority, as Heather Richards, Miranda Willson, Carlos Anchondo, Christian Vasquez and Kristi E. Swartz report for E&E News. “My budget lowers family energy costs with tax credits to help people make their homes more efficient, research and development to broaden the reach of solar and build a clean energy future,” Biden said.

New Oklahoma Wind Farm Is a Giant: The utility American Electric Power has begun operating the 998-megawatt Traverse Energy Center in Oklahoma, which the company says is the largest wind farm in the country. The completion of the project “is part of the next chapter in AEP’s transition to a clean energy future,” said Nick Akins, AEP’s top executive. Ohio-based AEP has been closing its coal-fired power plants and turning to natural gas and renewable energy to make up the difference. The company has said it is on track to get half of its electricity from renewable sources by 2030, as Mark Williams reports for The Columbus Dispatch.

Germany’s New Government Had Big Plans on Climate, Then Russia Invaded Ukraine: Vladimir Putin’s invasion of Ukraine has made Germany’s reliance on Russian oil and gas untenable, and led the government of Chancellor Olav Scholz to accelerate the transition to clean energy. German leaders are in the early stages of showing the world what an aggressive climate policy looks like in a crisis, as I report for ICN. “What [the Ukraine war] does is speed things up a bit, and breaks down opposition,” said Sascha Müller-Kraenner, director of Deutsche Umwelthilfe, a leading German environmental advocacy group. The war, he said, has demonstrated that the transition to renewable energy is national security policy as much as its climate policy.

Federal Government Sets May Auction for Offshore Wind Lease Areas off of the Carolinas: Fresh off of a record-setting auction for offshore wind leases near New York and New Jersey, the Bureau of Ocean Energy Management has scheduled an auction starting on May 11 for lease areas off of the Carolinas. The areas within the Carolina Long Bay could be used to develop at least 1.3 gigawatts of offshore wind energy capacity, as Iulia Gheorghiu reports for Utility Dive.

Federal Investigation Threatens Solar Industry, Industry Group Says: The U.S. Commerce Department has said it is investigating whether imports of solar panels are circumventing rules that limit imports from China. Clean energy business groups are warning that the investigation, which could lead to retroactive tariffs, could lead to layoffs and a reduction in solar projects, harming the Biden Administration climate agenda, as Matthew Daly reports for the Associated Press. “Overnight, the Commerce Department … drove a stake through the heart of planned solar projects,” said Heather Zichal, CEO of the American Clean Power Association. The investigation follows a complaint by Auxin Solar, a California-based solar panel manufacturer that said panels assembled in four Southeast Asian countries—Cambodia, Malaysia, Thailand and Vietnam—are circumventing restrictions on imports of solar panels from China.

ICN reporter Julie Margolin contributed to this story.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].