Most battery storage power capacity that’s expected to start operating in the United States over the next three years will be co-located with solar photovoltaic (PV) power plants, according to the U.S. Energy Information Administration (EIA). Meanwhile, how the capacity is used is changing as more batteries are added to the grid.
Between 2021 and 2024, 63%, or 9.4 gigawatts, of the 14.5 gigawatts of the capacity expected to come online will be built with a solar power plant. Another 1.3 gigawatts of battery storage will be co-located at sites with wind turbines or fossil fuel-fired generators, such as natural gas-fired plants. The remaining 4 gigawatts of planned battery storage will be located at standalone sites.
In the past, most U.S. battery systems have been located at standalone sites. At the end of 2020, the United States had 1.5 gigawatts of operating battery storage capacity. Of this amount, 71% was standalone, and 29% was located onsite with other power generators.
Most standalone battery energy storage sites have been planned or built in power markets that are governed by regional transmission organizations (RTO) or independent system operators (ISO). Of the planned battery systems that are expected to start operating over the next three years, 97% of the standalone capacity and 60% of the co-located capacity are in RTO/ISO regions.
More than 90% of the capacity planned outside of RTO and ISO regions will be co-located with a solar power plant. At some of the plants, the batteries can charge directly from the onsite solar generator when electricity demand and prices are low. They can discharge electricity to the grid when electricity demand is higher or when solar generation is unavailable, such as at night.
According to the EIA, the ability of utility-scale batteries to draw energy from the grid during certain periods and discharge it to the grid at other points creates opportunities for electricity dispatch optimization strategies based on system or economic conditions.
A utility-scale battery has more than 1 megawatt of capacity, and most are used for several roles depending on revenue opportunities or system support requirements. The most common use for batteries is frequency regulation; however, other uses are becoming more common as more batteries are added to the grid. This includes ramping, arbitrage and load following.
At the end of 2020, 885 megawatts, or 59% of total utility-scale battery capacity, cited frequency response as the use case. Frequency response maintains grid frequency as close to 60 hertz as possible. Deviations from 60 hertz can lead to protective generator trips that can contribute to a decline in system stability. Batteries are good for frequency regulation because their output doesn’t require any startup time and can quickly absorb surges.
As of the end of 2020, 583 megawatts, or 39% of battery storage capacity, cited ramping or spinning reserve as a use case. Ramping or spinning reserve is a set of ancillary services in which generators quickly respond to system disruptions, such as a sudden loss of generation or rapid change in demand. Regions with a high amount of electricity generation from sources such as wind and solar, whose output can fluctuate as wind speeds or cloud cover change, tend to require resources that can respond quickly.
Arbitrage regards buying electricity when prices are low and selling it when prices are high. Battery storage supports this strategy by charging when power prices are low and discharging when prices are high. This use case increased by 390 megawatts from 2019 to 2020 and comprised the greatest increase among the use cases. At the end of 2020, 586 megawatts, or 37% of battery storage capacity, were used for arbitrage.
Load following is when generators change their output to match changes in electric demand or load. Batteries are used for load following because their output can be digitally controlled and can respond to load changes with less stress than mechanical systems. Almost 400 megawatts of battery storage capacity was used for load following in 2020.