Grid Scale

Nearly 4 GW of battery energy storage was added in Q2. Where did it go?

Nearly 4 GW of battery energy storage was added in Q2. Where did it go?
SRP and NextEra Energy Resources, LLC have officially commissioned this 100 MW battery energy storage system to store the energy produced by the operating Saint Solar Energy Center in Coolidge, Arizona (Courtesy: NextEra Energy Resources)

Battery growth is booming in the United States, which added 3.976 gigawatts (GW) of storage capacity in the second quarter of 2024. Total capacity went up 87.3% year-over-year, reaching 23.775 GW by the end of the second quarter, according to an S&P Global Commodity Insights compilation of government filings.

In Q2 2024, we expected to add about 6.9 GW of storage capacity but ultimately reached just 57% of that target. In the same window in 2023, only about half of the expected facilities came online.

Most of the new batteries- 97% of them, actually- ended up in ERCOT, WECC, and CAISO territories. The Western Electricity Coordinating Council (WECC) which includes the California Independent System Operator (CAISO), is projected to climb to 15.838 GW of battery storage capacity by the end of 2024 and surpass 20 GW in 2025, according to the North American Electricity Long-Term Forecast Supplement. ERCOT is expected to hit 7.2 GW in 2024 and surpass 10 GW in 2025.

Q2 2024 battery energy storage additions and projected Q3 additions.
Source: S&P Global Commodity Insights, U.S. government filings
Credit: Kassia Micek, CI Content Design

According to the data, ERCOT had the most additions in Q2 with 1.4 GW, increasing its total capacity to 7.74 GW, or 32.6% of total US capacity. CAISO is the only grid operator with more, adding 1.388 GW in Q2 to reach 9.867 GW total storage capacity, accounting for 41.5% of total U.S. capacity, per S&P Global Commodity Insights.

S&P expects ISO New England to surpass 1 GW in 2025; New York ISO (NYISO) and the Midcontinent ISO (MISO) are expected to reach that milestone in 2026, followed by PJM Interconnection (PJM) and the SERC Reliability Corporation in 2027.

Q2 2024 regional operating battery energy storage and projected annual capacity changes.
Source: S&P Global Commodity Insights, U.S. government filings
Credit: Kassia Micek, CI Content Design

The top five largest projects added in Q2 were:

  • Ørsted’s 300-MW Eleven Mile Solar Center in Arizona, the sixth-largest U.S. BESS
  • Plus Power’s 250-MW Sierra Estrella Energy Storage in Arizona
  • Calpine Affiliates’ 230-MW Nova Power Phase 1 in California
  • Calpine Affiliates’ 230-MW Nova Power Phase 2 in California
  • Longroad Energy Holdings’ 215-MW Sun Streams PVS in Arizona

According to S&P Global Commodity Insights, the largest facility is still Florida Power and Light’s 409-MW Manatee Energy Storage Center, which started operations in Q4 2021.

The companies with the most battery energy storage capacity in the U.S. are:

  • NextEra Energy Resources with 3.369 GW
  • ENGIE North America with 1.561 GW
  • Axium Infrastructure with 1.125 GW
  • Plus Power with 1.059 GW
  • Vistra Energy with 1.023 GW

The states with the most battery energy storage are:

  • California with 10.3 GW
  • Texas with 7.74 GW
  • Arizona with 1.893 MW
  • Nevada with 1.125 GW
  • Florida with 545 MW

Five states have between 100 and 500 MW, nine states have between 50 MW and 100 MW, and 20 states have less than 50 MW of storage capacity through Q2 2024. 11 states have no battery storage capacity, according to S&P Global Commodity Insights.

A battery bubble may be forming. What happens if it pops? Episode 70 of the Factor This! podcast answers that question by taking an intimate look at the two top battery markets in the U.S. — California and Texas — and their diverging trajectories. Subscribe wherever you get your podcasts.

Reasons for growth

Lithium prices declined in 2024 and are more stable than a couple of years ago, leading to some certainty in financing battery projects. Platts, part of S&P Global Commodity Insights, assessed lithium carbonate CIF North Asia at $12,000/mt on August 13. That’s down $3,000/mt from the start of 2024 but follows two years of volatility that eventually saw the price collapse from a record of over $78,000/mt in November 2022 to $15,000/mt at the end of 2023.

Sodium-ion alternatives are also starting to gain a foothold, diversifying the battery market. Natron, the only commercial manufacturer of sodium-ion batteries in the United States, recently announced it will invest $1.4 billion to establish a sodium-ion battery giga-factory in Edgecombe County, North Carolina. Natron’s sodium-ion batteries were the first in the world to receive a UL 1973 listing, allowing them to be implemented in the data center, forklift, and electric vehicle (EV) fast-charging markets.

In addition, Commodity Insights notices battery energy storage is often the quickest way to add new capacity; constructing solar and wind generation takes longer and can be trickier considering permitting and labor costs. The decision to add energy storage is often dependent upon the needs of the region.

“The [ISO New England] battery forecast was increased partially to offset the capacity losses from solar and wind,” explains Annie Gutierrez, Commodity Insights senior research analyst. “In regions like ERCOT, data centers are driving increased demand compared to our last outlook which is increasing the need for firm capacity.”

Indeed, ERCOT is efficiently managing record-breaking demand days thanks to a more balanced renewable portfolio that includes more than 8 GW of new solar in the last year and a robust bevy of battery energy storage systems, including Jupiter Power’s new 400 MW BESS in Houston.

However, saturation in the Texas market is becoming an increasingly common topic of conversation among battery players. ERCOT’s connect and manage approach is efficient at getting Distributed Energy Resources online in a timely fashion, but Texas continues to curtail renewable energy sources due to transmission constraints.

Looking ahead to Q3

According to S&P Global Commodity Insights, more than 5 GW of energy storage is expected to come online in the third quarter of this year. If all of it is added (it won’t be, see above), it would represent a more than 20% increase in U.S. capacity quarter over quarter.

Many planned Q3 additions are also in the West and Texas. Less than 325 MW is expected to come online in the Southeast, Midwest, and Northeast.

The five largest Q3 projects to keep an eye on:

  • Enel Green Power’s 305.5-MW GulfStar Power in Texas
  • Jupiter Power’s 302.9-MW Old Aqueduct in Texas
  • Clenera’s 300-MW Atrisco Energy Storage in New Mexico
  • UBS Asset Management’s 209.3-MW Citadel BESS in Texas
  • ENGIE’s 200.8-MW BRP Paleo BESS