EIA’s energy outlook sees battery storage hitting 59 GW by 2050

by Peter Maloney
APPA News
March 30, 2021

As much as 59 gigawatts (GW) of battery energy storage will be in service installed by 2050, according to the most recent long-term energy outlook from the Energy Information Administration.

The “significant” growth of battery storage installations is the result of falling battery costs, growth in non-dispatchable renewables, and the application of the Investment Tax Credit to co-located storage systems, the EIA said in its Annual Energy Outlook 2021.

In a 2020 market update, the EIA said there were 125 operational battery storage systems in the United States at the end of 2018, representing 869 MW of power capacity and 1,236 megawatt hours (MWh) of energy capacity.

The Annual Energy Outlook 2021 includes alternative scenarios, or cases, that provide different projections based on the sensitivity of results to changes in the costs of renewables and the availability of oil and natural gas resources.

The projection of 59 GW of battery storage is the Annual Energy Outlook’s reference case. From a base of roughly 10 GW of energy storage in 2021, the EIA’s graph shows battery storage rising to 126 GW in the low oil and gas supply case and to 167 GW in the low renewables cost case.

The low oil and gas supply case assumes natural gas prices will be higher than the reference case, leading to a decline in gas-fired combined-cycle generation compared with the reference case that would be replaced by coal, nuclear, solar, and wind generation. That generation mix would require 67 GW more of battery storage capacity to be built than in the reference case.

The EIA’s reference case in the Annual Energy Outlook 2021 projects natural gas prices staying just below $4 per million British thermal units until 2050.

The low renewables cost case assumes a 40% reduction in the cost of renewables and energy storage compared with the reference case, which would lead to an increase of solar and wind generation that would replace coal, nuclear, and gas-fired combined-cycle generation. That scenario would result in 108 GW more of battery storage capacity being built compared with the reference case.

In all cases, 16 GW of battery storage installations would come from historical builds, announced projects, and state policy mandates, the EIA said. The EIA’s projections include battery storage facilities built on a standalone basis that charge from the power grid, as well as co-located systems that charges directly from an onsite solar photovoltaic power generator.

The EIA’s Annual Energy Outlook 2021 projects U.S. gross domestic product growing by 2.1% in its reference case, at 2.6% and its high economic growth case, and at 1.6% in its low growth case.

The Annual Energy Outlook 2021 noted that the COVID-19 pandemic has made its near-term projections more uncertain than in previous annual outlooks.