Most battery storage is now being paired with solar generation, the EIA says
Energize Weekly, October 6, 2021
Battery storage is increasingly being twinned with photovoltaic solar installations, and in the next three years, 63 percent of all projected storage, 9.4 gigawatts (GW), will be co-located with solar arrays, according to the U.S. Energy Information Administration (EIA).
Another 1.3 GW of battery storage will be built at sites with wind turbines or fossil-fuel plants, primarily natural gas-fired turbines, and 4 GW will be standalone facilities. The EIA’s Annual Electric Generator Report is based on an agency survey of the utilities.
The EIA is projecting that large-scale battery storage will contribute 10,000 megawatts (MW) to the grid between 2021 and 2023 – a tenfold increase of 2019’s capacity.
The process of combining solar and storage is already well underway. Florida Power & Light, a subsidiary of NextEra Energy, in June began installing 132 battery containers at its Manatee Energy Storage Center, with 409 MW of capacity. It will be charged by adjacent, existing solar facilities.
In September, the Clean Power Alliance, a community energy provider in California, signed a 15-year power purchase agreement with EDF Renewables for the output from EDF’s new Desert Quartzite Solar-Plus-Storage installation in Riverside County, which pairs 300 MW of photovoltaic and 600 MW-hours of battery capacity.
Los Angles officials also announced in September that the city was embarking on a $30 million program to develop municipal solar and storage using city-owned buildings.
This marks a sharp departure in storage development. “Historically, most U.S. battery systems have been located at standalone sites,” the EIA said. “Of the 1.5 GW of operating battery storage capacity in the United States at the end of 2020, 71 percent was standalone, and 29 percent was located onsite with other power generators.”
The standalone units were largely planned and built in power markets operated by regional transmission organizations (RTOs) and independent system operators (ISOs) where battery storage was promoted as separate revenue stream.
In the next three years, 97 percent of the announced standalone battery capacity is in RTO and ISO regions. Sixty percent of the co-located capacity is also in the same regions. Outside of RTO and ISO markets, 90 percent of planned storage capacity is twinned with solar photovoltaic (PV) plants.
At some solar PV co-located plants, the batteries can charge directly from the on-site solar generator when electricity demand and prices are low,” the EIA said. “They can then discharge electricity to the grid when electricity demand is higher or when solar generation is unavailable, such as at night.”
Cloud cover can reduce the effectiveness of solar arrays, but because, in general, the daily generation pattern is predictable, batteries can work well in tandem. Their limiting factor is the time it takes for them to discharge and recharge. For wind, a battery system could go days before getting a chance to fully recharge.
Another advantage of paring solar and storage, the EIA said, is that the overall project can then take advantage of the federal Investment Tax Credit (ITC), which is available to solar developments. The ITC provides for a 22 percent tax credit in 2021 and 10 percent for projects developed in subsequent years.