Storage battery installations surge in first quarter of 2023 led by Texas and California
Energize Weekly, June 7, 2023
Total battery storage installations in the U.S. are surging with first quarter 2023 capacity up 52 percent to 10.8 gigawatts (GW) with another 3.2 GW slated for the second quarter, according to S&P Global Commodity Insights.
A total of 710 megawatts (MW) of capacity were added in the first quarter, up 7 percent from the last quarter of 2022. S&P based its assessment on compilations of government filings and included installations that either began commercial operation or were synchronized to the grid.
“If all 3.177 GW of proposed Q2 additions are completed and connected to the grid, it would bring the U.S. total to nearly 14 GW, according to the data compiled,” S&P Global said.
California continued to lead the nation in total battery storage capacity, but Texas added the most capacity in the quarter.
One spur to the growth of battery storage has been a decline in prices in 2022 for lithium, a key metal in battery manufacturing, S&P said. The price for lithium carbonate, for example, had reached as high as $78,000 a metric ton last spring, but was trading at $38,000 a metric ton on May 24.
The California Independent System Operator (CAISO) accounts for 48 percent of the total U.S. battery capacity with 5.2 GW. Three of the five largest projects expected to come online in the second quarter – totaling 618 MW – are in California.
Battery storage has increased twentyfold since 2019, according to CAISO.
“Today’s fleet of storage resources can capture enough electricity to power up to 5 million California homes,” the California Energy Commission said. “By midcentury, capacity is projected to increase another 10 times to 52,000 MW.”
The Electric Reliability Council of Texas (ERCOT) added the most capacity in the first quarter, bringing its total to 3.3 GW, or 30.5 percent of all U.S. capacity.
Texas accounted for four of the six largest projects in the quarter with a total capacity of 448.5 MW. The single largest project for the quarter was ACCIONA Energy North America’s 190-MW facility in Cunningham, Texas.
Institutional investors are moving into the Texas battery market with BlackRock, Swiss bank UBS and South Korea’s SK searching for investments. BlackRock, for example, is backing Jupiter Power, which has six Texas battery projects.
“It’s cheaper to build there, the revenue is higher,” Andrew Waranch, president of Spearmint Energy, which acquired about 1 GW of Texas projects in the last year, told Reuters.
NextEra Energy Resources continues to have the largest operating battery storage capacity in the U.S. with 1.421 GW, according to the S&P data. Florida Power & Light, a NextEra subsidiary, has the country’s largest battery storage facility, the 409-MW Manatee Battery Energy Storage Center.
Outside of Texas, the major projects in the first quarter and those planned for the second quarter are in Arizona and New Mexico, totaling 510 MW, making the Western Electricity Coordinating Council (WECC) the third largest battery market.
WECC accounted for 16.2 percent of the first quarter additions and nearly 38 percent of the planned capacity for the second quarter.
In addition to the 1.6 GW of capacity planned in CAISO, WECC and ERCOT, the PJM Interconnection, the country’s largest grid serving Midwest and mid-Atlantic states, is slated to add 60 MW.
Southeastern states are projected to add 48 MW of storage in the second quarter, while the New York Independent System Operator will increase its capacity by 33.2 MW. ISO New England is scheduled to add 10 MW.