WASHINGTON — Within three years, large-scale battery projects are expected to surge across the Texas and California power grids as developers seek to store the electricity generated by the state’s expanding wind and solar farms.
The Energy Department estimates that 21 gigawatts of storage capacity will be connected to the US power grid by 2026, more than 2½ times the amount currently in operation. About 8 gigawatts are expected in Texas.
The boom in battery development comes as weather-dependent wind and solar power become an increasingly large part of the U.S. power grid, requiring an alternative energy source when the wind doesn’t blow and the sun doesn’t shine.
As renewable energy has grown over the past decade, natural gas-fired turbines have taken on much of that load. But as lithium-ion battery prices have fallen in recent years — while natural gas prices have risen — energy utilities are increasingly looking to larger batteries to fill the gaps.
“The technology you’re seeing here is starting to hit its tipping point,” said Ryan Katofsy, managing director of trade group Advanced Energy Economy. “Costs go down, performance improves. There is more information about qualities (batteries).”
The boom coincides with growing concerns about the reliability of the US power grid amid changing weather patterns linked to climate change. Texas suffered days of deadly blackouts last year after a winter storm caused power plants and natural gas wells to freeze. Michael Webber, an energy professor at the University of Texas, said the batteries could theoretically help provide power when generators fail.
But what’s driving investors’ interest is a state energy market in the Panhandle and West Texas where wind power often exceeds the capacity of transmission lines serving the state’s population centers, he said. If a power company can store electricity during off-peak hours and deploy it during times of peak demand, there is a profit to be made.
“You get these opportunities for big changes from low to high,” Webber said. “Frankly, we’re going to build batteries everywhere.”
Texas’ burgeoning battery market is dominated by two startups, according to federal records. Houston-based Broad Reach Power has 14 projects with a total of 2.2 gigawatts of capacity coming online by 2024, and Austin-based solar developer SolarPro has nine projects with a total of 4.1 gigawatts of capacity coming online by 2025.
Broad Reach declined to comment and SolarPro did not respond to a request for comment.
More battery projects could come with 79 gigawatts of pending projects at the Texas Electric Reliability Board, the state’s grid operator. Many of these projects have yet to secure funding or other milestones, but they represent one-third of all generation currently in development on the ERCOT network.
To help them, Congress included a provision in the Inflation Reduction Act passed this year that would allow battery projects to claim the same investment tax credit as solar manufacturers.
“You had some people have expectations (of the tax credit), so they were getting projects in line so they would be ready when the policy happened,” Katofsky said. “It’s a bit of a gamble, but that’s all.”