Growth of Installed Battery Storage Capacity
According to the “2022 EIA-860, Annual Electric Generator Report,” published by the U.S. Energy Information Administration (EIA), installed battery storage capacity increased by 84 percent, from 4,910 megawatts (MW) in 2021 to 9,056 MW in 2022. This gain was due to 107 utility-scale batteries, with a cumulative 4,112 MW of capacity (other capacity adjustments account for the 35 MW difference), that were installed across the United States.About 93 percent of the battery storage capacity added in 2022 was built in service territories where a regional transmission organization RTO manages the grid. This number of installations is significantly above historical averages and brings the overall RTO battery capacity to account for 86 percent of total battery capacity installed on the U.S. electric grid. The RTO battery capacity is disproportionately high, because RTOs account for only 65 percent of total U.S. generating capacity. According to the EIA report, there are a number of reasons battery storage capacity is increasing. 1 – Frequency regulation continued to be, on a capacity basis, the most often-cited use case, with over 74 percent (6,658 MW) of total battery storage capacity. Frequency regulation keeps the system-operating frequency as close as reasonably possible to 60 hertz (Hz), which was particularly prevalent in the PJM Regional Transmission Organization, where it was associated with 94 percent of battery capacity. These data demonstrate the continuing importance of ancillary services to battery operators. 2 – In 2021, arbitrage emerged as one of the more commonly-cited use cases, and this trend continued through 2022 as battery operators sought to take advantage of short-term pricing differences in wholesale power markets. “In general, arbitrage means that a battery storage unit will charge its batteries during low-price periods and discharge them during high-price periods,” said the EIA. Battery operators in the RTO markets of Texas (ERCOT) and California (CAISO) collectively accounted for 95 percent of all arbitrage use case capacity. Both markets exhibit preferred conditions for this practice, because each has substantial solar capacity that produces power during low-price periods followed by a surge in demand late in the day when higher-cost capacity is forced to run. 3 and 4 – Ramping and spinning reserve, as well as response to excess wind and solar generation, were the next two most common use cases after arbitrage. Batteries that provide ramping and spinning reserve services are providing generation as needed when conventional resources are either increasing or decreasing their load-carrying ability or have lost their ability to support load and require quick replacement. The ramping and spinning reserve use case was cited by operators in over 56 percent (2,311 MW) of battery capacity installed in 2022, and all but one of the 33 batteries associated with this use case were in RTO markets. In summary, according to the EIA, battery storage applications installed in 2022 indicate that the services that batteries have been providing continue to be important to the grid. “Among key trends continuing in 2022 were participation in ancillary services, particularly frequency response, and arbitrage,” said the EIA. The continued growth of solar capacity was an important factor that underpinned these trends.