April 21, 2024

This story was originally published by Canary Media.

California and Texas have a new clean-energy superlative to compete with: who has the most grid batteries.

Last year, Texas passed California large scale solar capacity. When large amounts of solar power rush onto the grid, batteries tend to follow. Now Texas is building more grid batteries than California, the longtime undisputed leader in clean energy storage.

Developers are expected to complete 6.4 gigawatts of new grid battery capacity in Texas this year, according to the feds Energy Information Administration. This is more than double the 5.6 gigawatts of battery capacity it ended 2023 with. It’s also as much battery capacity as the entire United States built last year, which was a record year for the energy storage industry. The projection exceeds the 5.2 gigawatts that will come online in California.

The boom in batteries in these states underscores the fact that energy storage is an increasingly important part of the nation’s transitional electricity system. The US is expected to add 14.3 gigawatts of battery storage overall this year; this represents 23 percent of all new power station capacity. Climate analysts have long called for massive storage expansion to facilitate a shift to low-carbon energy—now it’s finally starting to happen.

California is still predicted to end the year with more battery capacity than Texas, but if the current pace continues, Texas could overtake the Golden State as soon as next year. It would be a remarkable upset for California’s leadership in the deployment of clean energy. It’s further proof that Texas has become a leader in building clean power plants not because of enthusiastic climate policy, but because the technologies compete so well in the state’s energy market.

California built its nation-leading battery fleet through years of diligent policies and subsidies designed to jump-start adoption of this crucial clean-energy technology. The state a mandate finalized in 2013 for its utilities to start acquiring energy storage and allocated funding for households and businesses that wanted to buy small-scale batteries. Utilities have begun awarding capacity contracts (known as “resource adequacy” in state regulatory jargon) to battery developers, providing the financial security needed to build gigawatts of storage.

These policies pay dividends when batteries helped Southern California’s grid survive gas shortages after the 2015 Aliso Canyon gas storage leak. Over the years, the technology has helped solar development continue after the sunny hours have become saturated with renewable energy; the batteries shift solar generation to more valuable nighttime hours. They also provide vital capacity when heat waves push the state’s grid to the brink of collapse.

Texas has come into play much more recently, but for different reasons. As battery costs fell, private developers began to see opportunities to make money in the competitive ERCOT wholesale markets. Unlike California, Texas does not award specific contracts to ensure adequate network capacity; instead, the price increases from moments of scarce supply are intended to encourage private developers to build power plants and make money.

Developers have found that acquiring land, obtaining permits and connecting to the grid is easier in Texas than in California’s regulatory regime. The payoffs can be huge, both for developers and residents. For developers, fast-responding batteries are well-suited to cashing in on the sudden swings in ERCOT’s increasingly renewable energy markets. But more batteries also help the wider community keep the grid functional in difficult situations, such as during a series of heat waves last summer.

Battery construction picked up around 2020 in Texas, when firms such as Plus Power, Broad Reach Power and Key Capture Energy moved forward with 100 megawatt projects, unheard of in that market at the time. Now Plus Power, for example, list various Texas energy storage projects under construction with capacity in the hundreds of megawatts. Key catch lists 580 megawatts in operation or construction in Texas. Wide reach has more than 300 megawatts of workwith another 800 MW in the design-and-build phase.

And as these early movers continue to double down on Texas grid batteries, new entrants are rushing in to compete. The influx of entrepreneurs has made Texas the most vibrant grid storage market the US has ever seen in 2024.

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