How Giant Batteries Are Changing the Way Americans Use Electricity

California leads the nation in solar power generation, but it faces a challenge: solar energy is abundant during the day but vanishes in the evening when electricity demand peaks. Traditionally fossil fuels like natural gas were used to bridge this gap. However, since 2020, California has been addressing this issue by installing a significant number of large batteries, second only to China. These batteries store excess solar power generated during the day and release it when needed at night.

In terms of California's electric grid, batteries are crucial, helping to reduce reliance on fossil fuels in the evening. For example, on April 30, batteries provided over 20% of the state's electricity between 7pm. and 10pm., reaching a peak output of 7,046 megawatts, comparable to seven large nuclear reactors. Nationwide, power companies are increasingly using large batteries to mitigate the intermittent nature of renewable energy sources like wind and solar power.

California's innovative use of batteries offers a glimpse into the future of power grids. Batteries are increasingly being used to shift renewable energy to peak demand periods, with U.S. battery storage capacity growing tenfold in the past three years to 16,000 megawatts and expected to nearly double this year. This growth, driven by falling costs and federal subsidies, is most notable in Texas, California, and Arizona. 

Lithium-ion batteries, like those in smartphones and electric cars, are now used to handle renewable energy generation fluctuations, reduce transmission line congestion, and prevent blackouts. In California, policymakers aim for grid batteries to help achieve 100% carbon-free electricity by 2045, reducing reliance on natural gas. Battery operators also engage in energy trading, charging when electricity is cheap and selling it when prices soar. The expansion of battery storage is essential for integrating more renewable energy into the grid.

California and Texas have built their battery fleets differently. California's expansion was driven by regulatory mandates; in 2019, officials, concerned about potential blackouts due to the closure of older gas plants, ordered utilities to install thousands of megawatts of storage. In contrast, Texas relies on market forces within its deregulated electricity system, where prices can soar to $5,000 per megawatt-hour during shortages, creating lucrative opportunities for battery developers.

Other states like Arizona and Georgia are also planning significant battery installations to manage rising demand from data centers and factories. Although the batteries can be deployed quickly, the industry faces challenges such as the flammability of lithium-ion batteries, reliance on imports from China, potential undercutting by subsidies for gas plants, and complex regulations that can hinder storage deployment.

Sacramento's utility, the Sacramento Municipal Utility District (SMUD), has installed its first batch of novel grid batteries to support its goal of a carbon-free grid by 2030. Last year, SMUD partnered with cleantech company ESS to provide 200 megawatts/2 gigawatt-hours of long-duration energy storage. This installation is also a significant test for flow batteries, which use iron to store energy safely and economically for longer periods compared to conventional lithium-ion batteries. 

SMUD's aggressive decarbonization target requires immediate action, pushing the utility to adopt innovative storage solutions to replace fossil fuels for on-demand power. Although still in the testing phase, this project marks a critical step toward large-scale deployment, with plans for further expansion and workforce training in the coming years.

While challenges remain for California, Arizona, and Texas, the expansion of battery storage is essential for a sustainable energy future.  By addressing the intermittent renewable energy sources and providing reliable, on-demand power, batteries play a pivotal role in the transition to a cleaner, more resilient energy grid. Overcoming the current challenges through innovation, regulatory support, and market incentives will be needed for realizing the full potential of battery storage in shaping a sustainable energy future for California, Arizona, Texas, and beyond.