Driven by steeply falling prices and technological progress that allows batteries to store ever-larger amounts of energy, grid-scale systems are seeing record growth. Many of the gains are spillovers from the auto industry’s race to build smaller, cheaper, and more powerful lithium-ion batteries for electric cars. In the US, state clean-energy mandates, along with tax incentives for storage systems that are paired with solar installations, are also playing an important role.
The mass deployment of storage could overcome one of the biggest obstacles to renewable energy – its cycling between oversupply when the sun shines or the wind blows, and shortage when the Sun sets or the wind drops. By smoothing imbalances between supply and demand, proponents say, batteries can replace fossil fuel “peaker” plants that kick in for a few hours a day when energy demands soar. As such, widespread energy storage could be key to expanding the reach of renewables and speeding the transition to a carbon-free power grid.
“Energy storage is actually the true bridge to a clean-energy future,” says Bernadette Del Chiaro, executive director of the California Solar and Storage Association.
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How quickly that future arrives depends in large part on how rapidly costs continue to fall. Already the price tag for utility-scale battery storage in the US has plummeted, dropping nearly 70% between 2015 and 2018, according to the US Energy Information Administration. This sharp price drop has followed advances in lithium-ion battery chemistry to significantly improve performance. Battery capacity has expanded too, with facilities able to store and discharge energy over ever-longer periods of time. Market competition and rising battery production also play a major role; a projection by the US National Renewable Energy Laboratory sees mid-range costs for lithium-ion batteries falling an additional 45% between 2018 and 2030.
“We’re almost entirely piggybacking on the growth of lithium-ion battery technology, which is driven mostly by electric vehicles and consumer electronics,” says Ray Hohenstein, market applications director for Fluence, an energy storage technology provider with projects totalling nearly 1 gigawatt (1,000 megawatts) set to come online in California within a year. The money put into research for those applications is driving down costs across the board, says Hohenstein. “It’s just like what we saw with solar panels.”
In California, falling battery prices, coupled with the state’s aggressive push toward a carbon-free electrical grid by 2045, have led to a packed pipeline of storage projects. A 2013 bill set a target of 1.325 gigawatts of storage to be commissioned for the state’s grid by 2020. With 1.5 gigawatts of projects now approved – including more than 500 megawatts installed so far – that goal has already been surpassed, according to the California Public Utilities Commission.
