California’s battery storage capacity climbs 30% since April

While it took California about five years to reach 10 GW of battery storage capacity in early 2024, it has added another 3 GW in just six months, Governor Gavin Newsom’s office announced.

California now has 13.391 GW of storage capacity, a 30% increase since April and 15 times more than it had five years ago, according to an Oct. 15 statement from Governor Gavin Newsom’s office.

“We’re cutting pollution by adding more clean power to our grid. That means rapidly expanding battery storage to capture more of this clean energy that’s produced during the day, like solar, for when it’s needed when the sun goes down,” Newsom said in the statement. “These are the essential resources that we’ll continue needing more of as the climate crisis makes heat waves hotter and longer.”

California's battery market is growing rapidly and will likely continue to do so through the end of 2024 and 2025, said Annie Gutierrez, a senior research analyst with S&P Global Commodity Insights.

“We’re expecting around 4-4.5 GW of additions in 2024 and a similar amount in 2025,” Gutierrez said. “Batteries have played a large role in meeting the evening peak [load] so far in 2024 and will continue to do so and take some pressure off of gas and imports.”

More to come

A recent state agency report showed that the California Public Utilities Commission jurisdictional load-serving entities in California have 7.5 GW of storage and hybrid capacity under contract that is set to come online from the fourth quarter of 2024 through 2027, Scott Murtishaw, the executive director of the California Energy Storage Alliance, told S&P Global Commodity Insights Oct. 16.

“California is crushing its clean energy goals, and the additional storage capacity added in the past two years enabled us to weather two significant heat waves without a single call for customer conservation,” Murtishaw said. “As we will need to retire thousands of MW of old, coastal gas-fired power plants in the next three years and meet load growth from data centers and electrification, California must continue this record pace of energy storage development.”

The California Independent System Operator, which manages the flow of electricity for about 80% of California and a small part of Nevada, surpassed 10 GW of battery capacity in early October and has over 73 GW of battery storage capacity in its interconnection queue, with over 8 GW that have executed interconnection agreements.

Ramping up battery storage is a key part of Newsom’s energy roadmap for achieving the state’s ambitious climate goals and a 100% clean electric grid, according to the governor's office. The state is projected to need 52 GW of energy storage capacity by 2045 to meet those goals.

“The recent surge in battery storage has significantly enhanced California’s ability to maintain grid stability during extreme weather,” Newsom’s office said in the statement. “Throughout the summer of 2024, battery storage reliably discharged to support the grid during the net peak hours – a critical stretch of the day when the sun sets and solar resources rapidly go offline.”

Demand side support

The California Energy Commission’s Demand Side Grid Support program has enrolled 515 MW of capacity, including the world’s largest storage virtual power plant, further supporting grid reliability.

The DSGS program was launched in August 2022 as part of California’s Strategic Reliability Reserve of backup energy resources that serve as an insurance policy when the power grid is strained during extreme events when demand is high, according to an Oct. 14 Commission statement. The DSGS program, which runs May through October, incentivizes enrolled Californians to reduce electricity usage or send energy to the grid when conditions are tight.

“As the effects of climate change become more pronounced, innovative programs like DSGS provide a critical buffer for ensuring the reliability of California’s electrical grid while reducing emissions,” Commission Vice Chair Siva Gunda said in the Oct. 15 statement.

By leveraging existing energy assets, the program helps reduce California's reliance on fossil fuels, supporting the state’s clean energy future and contributing to an equitable energy system, according to the commission. Participants are paid based on the net load reduction they provide, with some earning $2/kWh of energy shared with the grid.

The program includes one of the largest storage virtual power plants in the world with a capacity exceeding 200 MW, according to the commission. The virtual power plant taps into a network of customer-owned battery storage systems typically paired with solar and together the individual devices provide power back to the grid.

The resources used to reduce electricity demand on the grid vary based on which program option the participant is enrolled:

• Option 1: Non-combustion resources (such as traditional demand response)
• Option 2: Demand response aggregators participating in CAISO market
• Option 3: Storage virtual power plant

The virtual power plant option has been activated 16 times so far in 2024, while the traditional demand response option has activated once, helping to avoid a grid crisis during four separate heatwaves from July through the beginning of October, according to the Commission.

The first year the DSGS program was in operation was in 2022 and it reduced over 3 GWh of electricity during a 10-day heat wave that lead to the California Independent System Operator breaking a 16-year peakload record.