Companies are poised to install record amounts of batteries on America’s electric grid this year, as government mandates and a steep decline in costs fuel rapid growth in power storage.
The U.S., which had less than a gigawatt of large battery installations in 2020—roughly enough to power 350,000 homes for a handful of hours—is on pace to add six gigawatts this year and another nine gigawatts in 2022, according to S&P Global Market Intelligence.
Demand for utility-scale storage is expected to keep rising world-wide for the next several years, driven by rapid growth in the U.S. and China, as new storage technologies and pressure to add renewable energy sources to stem carbon emissions reshape the electricity industry.
Giant batteries, often paired with solar farms, can charge when sunshine is plentiful, then send electricity to the grid later when the sun goes down or demand otherwise spikes and power is more valuable. The installations, most of which currently use lithium-ion batteries like the ones found in electric vehicles and laptops, resemble rows of boxy shipping containers, and usually provide up to four hours of backup power.
The surge in battery development has the potential to substantially change the power generation sector. Electricity discharged from batteries is increasingly replacing electricity generated by gas-fired power plants in certain parts of the country, especially those that only fire up during periods of peak demand. Already, utilities, power generators and investors are rethinking the need for conventional power plants, as batteries become cheaper and more viable.
[Jennifer Hiller and Katherine Blunt]