This week, the US Energy Information Agency posted preliminary findings from its latest energy survey, which collects generator-level specific information about existing and planned generators and associated environmental equipment at electric power plants with 1 megawatt or greater of combined nameplate capacity. The final report is due to be released September 1.
In a press release, the EIA said the capacity of utility-scale battery storage more than tripled in the United States during 2021, from 1.4 gigawatts (GW) at the end of 2020 to 4.6 GW. Although battery systems have several common applications, the latest survey finds more of them are being used to store electricity when prices are low and discharge electricity when prices are high, a strategy known as price arbitrage.
During 2021, 59% of the 4.6 GW of utility-scale US battery capacity was used for price arbitrage, up from 17% in 2019. In certain markets, price arbitrage is more common than in others. For example, more than 80% of the battery capacity added in 2021 in the California Independent System Operator service territory was used for price arbitrage.
Batteries also help maintain grid reliability. For example, batteries can be used to regulate frequency, that is, they help maintain the grid frequency of 60 cycles per second. Deviations from that frequency can lead to power surges or other types of grid instability. Batteries are well suited for frequency regulation because they do not require any startup time and they can quickly absorb power surges. Frequency regulation is still the most common storage battery application in the United States, according to EIA.
Similarly, batteries that help ramp generation and provide spinning reserve can balance electricity supply and demand for periods ranging from a few seconds to a few hours, depending on the requirements of changing electricity demand and generator outages.
Batteries can also counter excess wind and solar generation in some markets. To do this, batteries absorb excess solar or wind generation when demand is low and then discharge it later when demand is high. Battery storage is often paired with renewable sources in the United States. In fact, the EIA survey found that more than 93% of grid scale battery capacity that came online in 2021 was co-located with solar power plants.
Note: If you are wondering why the US EIA reports battery installations in GW and not GWh, we wondered the same thing. Apparently, the duration of storage was not a factor in the latest survey. Seems odd, but maybe they know more about their business than we do. In any event, it is what it is. Battery storage in the US is way up and that’s a good thing.
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