Adjacent to Vistra Corp.’s natural gas-fired Moss Landing CC power plant on California’s Monterey Bay, two of the world’s biggest lithium-ion battery storage stations are emerging as critical new assets for the state’s clean energy transition. Across the country in Manatee County, Fla., meanwhile, Florida Power & Light Co. is building its own big battery complex, to be integrated with a nearby solar farm, while its affiliate NextEra Energy Resources LLC has dozens of contracts to build such projects nationwide.
These facilities are forerunners of a new era in the power sector that researchers at the U.S. National Renewable Energy Laboratory have deemed “the rise of battery peaking power plants.” Capable of supplying two to six hours of stored electricity to thousands of homes during periods of peak demand, battery peakers have entered a period of accelerated growth centered in the Southwest.
Much of that growth is happening in Texas and California, where recent extreme weather events have underlined the need to bolster the reliability of statewide power systems.
Over the next three years, utilities and developers plan more than 15,000 MW of energy storage additions that largely fit the peaker profile, according to S&P Global Market Intelligence data. IHS Markit expects the U.S. to add over 5,000 MW of energy storage in 2021, tripling from 2020 and accounting for half the global energy storage market, the research firm said Feb. 16. (IHS Markit is subject to a merger with S&P Global pending regulatory and other customary approvals.)
The total potential for battery peakers could eventually exceed 100,000 MW in the U.S., according to NREL. Continued cost reductions and rising volumes of variable wind and solar generation could open up even greater market opportunities in a multi-phase rollout of diverse energy storage technologies, the national lab said in a study released in January.
“The fact that we can now make it pencil out, just based on pure peaking capacity, plus flexibility … and make batteries at or better than a combustion turbine, that is really a dramatic change that’s just going to accelerate,” Paul Denholm, a principal energy analyst at NREL and one of the study’s authors, said in an interview. “It’s going to be increasingly the case where a technology-neutral utility who just wants to provide energy and capacity to their customers at least cost [is] going to do the math and say, ‘Yeah, we’re going to build a battery.'”