In response to record-high temperatures and potential blackouts during summer, the U.S. power grid has turned to a burgeoning solution: large-scale batteries. These batteries, emerging as a vital component of the energy matrix during heatwaves, serve a dual purpose. They help compensate for the power gap that arises when solar energy dissipates at sundown, a time when many continue to use air conditioners. Furthermore, these batteries have been instrumental in maintaining grid stability, stepping in when primary power sources falter.
The effectiveness of this solution is underscored by the experiences of states like Texas. Despite witnessing 10 record demand peaks over the summer, the state managed to avoid rolling blackouts, in large part thanks to batteries. These energy reservoirs were discharged primarily in the evenings, around 7 p.m., a crucial time when solar energy sharply drops, and wind energy is yet to pick up its pace. Jeff Bishop, CEO of Key Capture Energy, emphasized that while batteries weren't the sole saviors from blackouts, they played a pivotal role.
Interestingly, the prominence of large-scale batteries in the U.S. is a recent phenomenon. Prior to 2020, such installations were almost non-existent. However, today, plans for extensive installations are underway across 29 states, with the sector experiencing substantial growth, even as other clean-energy projects witness a slowdown. This growth is attributed to several factors. For one, nearly 1,500 megawatts of battery storage were connected to the grid in the second quarter, marking a 60% increase from the same period the previous year. Additionally, the stabilization of inflation and supply-chain disruptions, which previously hindered battery storage projects, has paved the way for an industry boom.
Driving this expansion further are new tax incentives. The Inflation Reduction Act introduced a unique credit for battery storage. Previously, for a battery project to qualify for incentives, it had to be linked with a solar or wind project. Now, standalone battery projects are also eligible. Dominated by states like California, Nevada, Arizona, and Texas, the U.S. battery market is seeing batteries charge during periods of surplus renewable generation, only to discharge later when demand and energy prices spike. In particular, Texas stands out, with battery storage constituting nearly 60% of new projects aiming to connect to the grid.
