Batteries come of age, and are now doing the heavy lifting around the solar duck

Batteries used to be viewed as an exotic and expensive afterthought because that is what they were.

Not anymore. They are now considered a generation source, even though they are not net generators of electricity. Moreover, as technology improves and the costs continue to fall, they are no longer exotic or expensive, especially given what they can do.

The Energy Information Administration (EIA) acknowledges the growing significance of batteries pointing out that that even though they are not a primary source of generation – i.e., they do not create electricity from a fuel or natural resource – they store electricity that has already been generated, making them a secondary source of electricity.

Moreover, battery energy storage systems (BESS) provide a range of vital and highly valuable services including balancing supply and demand, moving electricity from periods of low to high prices – price arbitrage – and, crucially, allowing electricity from renewable sources such as wind and solar to be stored until needed, which reduces renewable curtailment.

All storage technologies use more electricity for charging than they provide when discharging. In that sense, they are net consumers. For all these reasons, utility-scale BESS has been growing quickly as a source of electric power capacity in the US in recent years with 5 GW of capacity added in the first 7 months of 2024.

As of July 2024, more than 20.7 GW of BESS capacity was available in the US according to the IEA (visual). Other types of energy storage include pumped hydro, flywheels, and compressed air, but none match the fast response capabilities of BESS.

The impact of BESS is manifested in grids across the world. The California Independent System Operator (CAISO), for example, routinely relies on BESS to manage the stressful daily ramping in the late afternoon as the sun goes down – the infamous “duck curve.”

On a recent day in September 2024 with the net load of 41,000 MW, the evening ramp was around 13,000 MW in three hours, but batteries – rather than peaking plants – did most of the heavy lifting per below:

– Natural gas provided 3,000 MW;

– Imports provided 1,000 MW;

– Large hydro about 2,000 MW; and

– The remaining 7,400 MW was provided by batteries.

With costs rapidly falling batteries are a Godsend to grid operators around the world. According to the International Energy Agency (IEA), some 90 GW of batteries were installed globally in 2023, double the 2022 figure – of which 2/3rd was utility-scale BESS.

Bain & Co, a consultancy, predicts the global market for grid-scale batteries to grow from $15 billion in 2023 to $200-700 billion by 2030 and as much as $1-3 trillion by 2040.

Batteries are serious business.

As with everything else these days, battery manufacturing is heavily concentrated in China, which is a source of concern. But the good news is that the Chinese have over-invested in the sector, which means a glut in supply causing downward pressure on prices.

While this is not good for battery manufacturers inside or outside China, it is good for the grid operators and EV buyers while supplies last.

This article was originally published by EEnergyInformer. Republished here with permission