By Taylor Hinds
By 2030, it will be both physically possible and economically affordable to meet 100% of electricity demand with the combination of solar, wind and batteries (SWB) across the entire continental United States, as well as most other populated regions of the world. Unsubsidized solar and wind power are already the cheapest source of electricity in many regions, and as a result we have seen exponential growth and mass adoption of these generation technologies.
But what about the batteries?
The B is indispensable
In an SWB system, batteries are indispensable. While solar and wind offer numerous advantages—scalable technologies that produce abundant, cheap, clean electricity—their biggest challenge is intermittency. When the sun doesn’t shine or the wind doesn’t blow, no electricity is generated. On their own, solar and wind cannot meet 100% of energy demand, as there would inevitably be periods when energy production falls short of societal needs. Batteries change this equation.
In an energy system, batteries perform several important functions.
Balancing intermittency of renewables: Storing excess energy during periods of high production (e.g., sunny or windy days) and releasing it during periods of low production or high demand. This ensures a consistent and reliable energy supply over longer time frames, typically hours to days or weeks, to smooth out the inherent variability of renewable sources.
Backup power and resiliency: Providing immediate backup power during outages or emergencies.
Grid stabilization and peaking: Delivering fast-response power to balance short-term fluctuations between supply and demand, particularly meeting high demand during peak periods (a function usually met by fossil fuel-powered peaking plants).
Following an influx of battery installations over the past couple of years, we have seen these benefits in action in the regions that have adopted them. In August in Texas this year, for example, residents were not asked to conserve energy as they usually are, despite scorching heatwaves and record energy demand. Increased solar and wind generation capacity ensured that there was enough energy generated to support increased demand from air conditioners, while increased battery capacity meant this supply was not interrupted when the sun went down in the evening.
During a similar heatwave in California in September, the extreme heat reduced the amount of energy that could be generated from natural gas plants, at the same time that wildfires inhibited power imports and electricity transfers from nearby areas (the usual solution to increased demand). Thanks to the new grid-scale battery capacity, there was no emergency declared and electricity prices remained stable throughout this period of significantly increased energy demand.
Grid-scale batteries in 2023
Over the past few years, there has been a massive uptick in the amount of battery energy storage systems installed around the world, especially at grid scale. These grid-scale systems are batteries (mostly lithium-ion) installed at the regional or country level to support the electricity that is currently being generated and distributed to households, businesses and industries by energy utilities. This electricity comes from all sources—renewable and/or non-renewable—depending on the electricity mix of the region.
At the end of 2023, the world had approximately 56 GW / 200 GWh of grid-scale battery storage installed, up from just 3 GW 5 years ago.
56 GW refers to the power capacity of the batteries—the maximum amount of power that a battery can deliver at any instant.
200 GWh refers to the energy capacity of the batteries—the total amount of energy the batteries can store and release over time.
To put this in perspective, New York City uses about 50,000 GWh of electricity per year, according to NYISO. This means that all the grid-scale battery storage in the world in 2023 could only power New York City for a day and a half.
This may not sound very impressive because the numbers are relatively small, but the growth is incredibly fast. Like other disruptive technologies, the adoption of batteries is exponential. We expect installed capacity to increase rapidly and significantly over the 2020s and beyond.
Additionally, as we discovered in Rethinking Energy 2020–2030, we expect regions to build relatively more solar and wind generation capacity than battery capacity as they invest in SWB energy systems.
One of the key findings of the Rethinking Energy report was the Clean Energy U-Curve—a concept that can be used to design an SWB system. The logic behind the curve states that it makes more sense to overbuild cheap energy generating capacity so that you need less expensive energy storage to maintain 100% of electricity demand. This not only significantly decreases the amount of batteries needed, and the total cost of the system, but also results in SWB Superpower—cheap, clean and superabundant electricity.
Where in the world are all the batteries?
Battery energy storage systems are a distributed and decentralized technology that are being deployed at all scales, from residential to commercial to grid scale, all around the world. Individuals, businesses and energy utilities will build and deploy projects wherever they are needed at the capacity that best suits the use case, energy demand, storage technology and land availability at the site. Many are attached to solar or wind generation plants, but others are standalone energy storage facilities.
All countries with > 0.5 GW Installed in 2023
So far, there are only two serious centers of grid-scale battery energy storage deployment in the world: China (~27 GW) and the United States (~16 GW). These two countries are also home to most of the world’s largest individual battery projects, many of which now are on the GWh scale in terms of energy capacity.
The largest system in the world right now is the Edwards & Sandborn Solar Plus Storage Project in California, completed in January 2024. This battery system, which is co-located with solar power generation, has 875 MW of capacity and can supply a staggering 3.3 GWh of electricity.
Some of the world’s largest systems include:
- Moss Landing Energy Storage Facility (California, USA): 750 MW / 3 GWh
- Gemini Solar plus storage (Nevada, USA): 380 MW / 1.4 GWh
- Crimson Large Scale Battery Energy Storage System (California, USA): 350 MW / 1.4 GWh
- Desert Peak Energy Storage I (California, USA): 325 MW/ 1.3 GWh
- Kenhardt Solar Power Complex Station (Northern Cape, South Africa): 225 MW / 1.1 GWh
- Togdjog Shared Energy Storage Station (Qinghai, China): 270 MW / 1.1 GWh
- Lijin County Jinhui New Energy Co (Chandong, China): 795 MW / 1 GWh
- Oberon Solar and Storage (California, USA): 250MW / 1 GWh
- Sierra Estrella (Arizona, USA): 250 MW / 1 GWh
- Manatee Battery Energy Storage Center (Florida, USA): 409 MW / 0.9 GWh
- Baotang Energy Storage Station (Hong Kong, China): 300 MW / 0.6 GWh
- The Victorian Big Battery (Victoria, Australia): 300 MW / 0.45 GWh
- Hornsdale Power Reserve (South Australia, Australia): 150 MW / 0.19 GWh
- Stocking Pelham Battery (Hertfordshire, England, UK): 50 MW / 0.05 GWh
This list is by no means exhaustive. There are thousands of battery energy storage projects installed around the world, with more—and larger—projects coming online every month.
Cost as an accelerator
The falling cost of lithium-ion batteries has been a major accelerator for the rapid adoption of energy storage over the past couple of years. This has largely been driven by China. As Wright’s Law explains, costs tend to decline as a function of cumulative production. China produces over 76% of lithium-ion batteries—10 times more than the United States—and this year produced 33% more than last year. Consumer electronics were initially the largest market, but now the explosion in electric vehicles is creating the volume to drive the cost down. In fact, since 2010, just over a decade ago, the cost of lithium-ion batteries has fallen over 88%. As a result, 1 TWh of lithium-ion batteries were produced in 2023— nearly 15% of which went to energy storage. We expect the energy storage portion to increase as the total production volume increases. We also expect this cost trajectory to continue to 2030 and perhaps beyond.
While lithium-ion batteries are currently the most popular choice for battery energy storage, the industry is also investing in other options in order to bring the cost down further. There are many, many options for energy storage. Several of the newly announced projects, and some that have already been completed, are diversifying away from lithium-ion batteries.
Regulation as an accelerator
These breathtaking decreases in grid-scale battery electric storage costs promise to reshape the energy economics and economic competitiveness of entire civilizations for many decades to come. And yet so few countries have even noticed that this race to the top—where the winners will be able to generate and store clean and superabundant energy at low cost—is not just already underway, it is accelerating exponentially.
The push for battery storage in China has been largely led by the government, which is trying to reach a goal of 40 GW installed by 2025. To achieve this goal, the Chinese Government mandates that new construction of solar or wind must have battery storage constructed alongside it—a powerful accelerant, given that China is building more solar and wind than the rest of the world combined. Governments at various levels have also introduced capacity rental fees, subsidies and investment into battery technology research to encourage further uptake.
The United States is accelerating its efforts through the Inflation Reduction Act (2022) and other policies to challenge China’s dominance, including offering tax credits and incentives for the manufacturing and deployment of batteries, especially large-scale and standalone battery storage projects (not just ones paired with solar installations). The United States has also passed orders to allow energy storage of various sizes to participate in wholesale energy markets, which makes them more financially viable. Several states have energy storage installation targets and have also introduced their own mandates and incentive programs like rebates, grants and tax incentives to complement the federal ones.
If we look at the data from a per capita perspective, the four other largest adopters—Ireland, Australia, the United Kingdom and Germany—do not have anywhere near as much total installed capacity as the United States and China. However, their governments do clearly recognize the transformative effect that battery storage, as a part of SWB energy systems, will have on the future of their countries. All four have a variety of programs and regulations that support the uptake of batteries as part of the energy system.
Ireland (~0.4 GW) tops the list due to a small population and a couple of large battery installations. The Irish Government has recently published an Electricity Storage Policy, a significant policy framework outlining key government actions to formalize the role and accelerate the growth of energy storage in Ireland's future energy system. It also has the EirGrid DS3 program, a commercial arrangement to allow battery storage systems to deliver grid services and thus generate revenue streams.
In Australia (~1.8 GW), the National Energy Market allows energy storage providers to trade electricity, which drives the growth of grid-scale storage. A new Capacity Investment Scheme by the government supports new investment in both battery energy storage and clean generation capacity across the country. Australia also has a Virtual Power Plant program in place, enabling households to sell their stored energy back to the grid during peak times. Several states offer direct subsidies for residential battery installations to support their extensive rooftop solar adoption and decentralized energy system.
The United Kingdom (~3.6 GW) has recently reformed energy regulations to remove barriers to battery storage in an effort to increase deployment across the country. Its Capacity Market and Enhanced Frequency Response programs reward energy storage providers for providing grid services.
Germany’s (~1.7 GW) state-owned bank offers low-interest loans and subsidies for residential solar-plus-storage systems. Commercial and industrial users also benefit from grid fee exemptions, allowing them to store and release energy without incurring extra costs, while feed-in tariffs incentivize them to feed excess stored energy back into the grid, promoting decentralization.
Germany, Australia and the United States have significant and growing residential-scale battery energy capacity installed that is not included in this data.
The global race for battery storage is heating up, but there are still far too many countries with little to no battery energy storage as of 2023. The future of energy lies in SWB—cheap, clean and superabundant electricity—and countries must act swiftly to remain competitive. Solar and wind are made viable by energy storage, and those who delay deploying this technology risk falling behind not only in energy security but also in economic opportunities. With China and the United States leading the charge, the race is on. Nations must move quickly to build resilient SWB systems or risk leaving all the advantages to the countries that were quicker to act.
The future is cheap, clean and superabundant solar, wind and battery powered energy.
Countries must act swiftly to build battery storage and remain competitive.
How can you accelerate the disruption of energy within your community? Get in touch and let us know.
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