The Growing Need for Energy Storage for Electric-Powered Utilities

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The U.S. and other countries are increasing efforts toward more efficient, electric-powered energy as policy demands and supply and production issues add pressure for renewable solutions. From that, utility-scale energy storage is an immediate and rising need for power companies — often referred to as large-scale or grid-scale storage.

With the U.S. government’s Net Zero Emissions by 2050 target (and similar goals in individual states and other countries across the globe), infrastructure for and investment in renewable resources are growing. What does battery storage mean for utilities supplying electric power and for the grid’s reliability? What are the potential challenges of the changing power landscape? How quickly will utility customers see changes happen?

Utility Energy Storage

Battery storage helps reliably collect and parcel out power from renewable sources like wind and solar. With stored power reserves in batteries, utilities can then provide power during high-demand times without needing to rely on the intermittent nature of these resources. This helps with grid stability, flexibility and recovery after failures.

Growing electric power generation equals an increased need for large-scale battery storage. In fact, a recent U.S. Energy Information Administration report cites that utility-scale storage in the U.S. will increase four-fold to 30 gigawatts (GW) by 2025. One gigawatt can power about 75,000 homes, so 30 GWs are estimated to power 2.25 million homes.

What’s utility-scale energy storage look like? People were first familiarized with charging stations set up for electric vehicles, like Tesla. Beyond that, battery storage facilities are popping up across the U.S. and the world; the most popular is lithium-ion batteries that can be charged and depleted thousands of times. 

Some market watchers predict a 30% annual average growth rate in worldwide storage development between now and 2031. The U.S. and China are leading the global markets in energy storage. See this infographic for how stored energy is generated and transmitted to the customer. 

Electric Storage Challenges

While the political and personal will for electric power storage heightens, challenges to a net-zero future include inflation, rising construction costs and supply chain issues.

Private industry has worked for more than a decade on battery storage infrastructure, including these top 10 energy storage companies in the U.S. But inflation is impacting building costs, as do fluctuating battery component costs and availability. Supply-chain headaches with Asia, the main producer of lithium-ion batteries, have impacted production.

Additionally, battery supply competition between electric vehicles and energy storage facilities leads to further supply issues. Incentives for private industry to meet the growing energy storage demand, plus rebates and other economic benefits for private consumers, will help spur on innovation and production.

Alternatives to Grid-Scale Battery Storage

With 60% growth in 2021, battery storage is expected to see the largest growth worldwide for grid-scale energy storage. Beyond lithium-ion batteries, other low-carbon technologies and innovations are meeting energy demands across the globe, including:

• Pumped-storage hydropower, which is currently the most widely used and accounts for 90% of the global electricity storage market.
• Compressed air and gravity storage, which play a minimal role but are viable options.
• Hydrogen, which impacts a smaller portion of a low-carbon future, but is impacting industries like chemical and petrochemical sectors.

As governments and industry work toward an energy-efficient future, utility-scale energy storage is an important topic. Further, advancements in automation and artificial intelligence will help connect and manage renewable resources like wind and solar on a connected smart grid.

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