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Over 60 Percent of Battery Storage Coming Online Will Be Co-located, EIA Says

October 12, 2021

by Peter Maloney
APPA News
October 12, 2021

Most of the battery storage expected to come online in the next five years will be co-located with a solar power plants, according to the Energy Information Agency’s (EIA) most recent annual electric generator report.

Of the 14.5 gigawatts (GW) of battery storage planned to begin come online between 2021 and 2024, 9.4 GW, or 63 percent, will be co-located with solar power, the EIA said. Another 1.3 GW of battery storage will be co-located at sites with wind turbines or fossil fuel-fired generators, such as natural gas-fired plants. The remaining 4 GW of planned battery storage will be located at standalone sites.

The EIA’s generator report collects information about existing and planned generation projects that are 1 MW or greater.

According to historical EIA data, most of the battery storage deployments in the United States have been done on a standalone basis. Of the 1.5 GW of battery storage that was in operation at the end of 2020, 71 percent was standalone, and 29 percent was co-located with other power generators.

A combination of falling prices for lithium-ion batteries and rising levels of wind and solar generation is driving an increase in renewable energy projects that include battery storage, according to Lawrence Berkeley National Laboratory.

Batteries can offset the intermittent nature of renewable resources such as wind and solar power. Solar power, in particular, can be effectively paired with battery storage because of their relatively regular daily generation patterns, EIA noted.

Predictability works well with battery systems because they are limited in how long they can discharge their power capacity before needing to recharge. If paired with a wind turbine, a battery system could go days before having the opportunity to fully recharge.

The EIA also pointed out that battery systems co-located with renewable energy resources also can take advantage of the Investment Tax Credit available for solar projects.

EIA data also show that most standalone battery storage sites have been planned or built in power markets that are governed by regional transmission organizations (RTOs) and independent system operators (ISOs). Some RTOs and ISOs have market rules that provide revenue streams for energy storage projects, which encourages developers to site projects there.

Of the utility-scale battery systems announced due online between 2021 and 2024, 97 percent of the standalone battery capacity and 60 percent of the co-located battery capacity are in RTO/ISO regions, EIA said. Outside of RTO and ISO regions, over 90 percent of planned battery storage is scheduled to be co-located with a solar photovoltaic plant, EIA said.

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