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Energy storage battery boom is changing the U.S. power structure

published: 2024-06-14 17:05

U.S. developers are deploying batteries at a record pace, increasing the utilization of renewable energy generation and changing the U.S. generator structure.

Last Tuesday, batteries delivered 2GW worth of power to the Texas grid, the third-highest battery storage output on record, to meet peak nighttime electricity demand. In California, battery storage typically provides a fifth of power during the evening hours, according to GridStatus.io. The two states are leading the buildout of battery storage capacity in the U.S., which is expected to nearly double to around 30GW this year, according to the U.S. Energy Information Administration.

The landmark Inflation Reduction Act extends tax credits for the first time to battery developers to help meet the US goal of 100% carbon-free electricity by 2035. The addition of batteries offers developers a quick payback while helping to ease concerns about grid reliability from renewable energy. Batteries could play an important role in meeting surging power demand from data centers used for the internet and artificial intelligence. Big tech groups such as Microsoft and Google have pledged to run their electricity consumption from carbon-free sources by 2030, a goal that will be hard to achieve without battery storage.

But analysts say fossil fuels will meet growing electricity demand until battery storage systems achieve greater scale. Obstacles facing the battery storage industry include years of grid connection wait times and regulatory uncertainty. Last month, the Biden administration more than tripled Section 301 tariffs on battery imports from China to 25% starting in 2026. Developers say the move will increase battery prices due to a lack of a domestic supply chain.

The United States is increasing its production of solar panels. A new report from the Solar Energy Industries Association and Wood Mackenzie found that the United States added a record 11 gigawatts of solar panel manufacturing capacity in the first quarter. The current U.S. photovoltaic module production capacity exceeds 26 gigawatts, more than three times the capacity by the end of 2022. The milestone comes at a critical time for U.S. solar, which is the fastest-growing new source of power generation on the grid. Despite growth in domestic manufacturing, U.S. imports of panels remain at record levels, and some manufacturers have called for greater trade protection to protect the industry from a flood of cheap imports, with Chinese companies having big investments in Southeast Asia, where much of the U.S. supply comes from.


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